Thai real estate in the doldrums

**zubber** · 17-03-2010, 12:26 AM

Phuket, Samui Villas and Condos Going Unsold
By Alan Morison and Chutima Sidasathian
Tuesday, March 16, 2010

A DISMAL picture of the property development scene on Phuket and Samui emerges from the latest figures provided by the Government House Bank, which specialises in loans for housing.

The Director of the Real Estate Information Centre, Sammana Keetasin, reports that sales all over Thailand are down, but especially on the two holiday islands.

Given low demand, there appears to be an oversupply of both villas and condominiums.

While the latest political protest in Bangkok may not have had a dramatic effect on tourism on Phuket, which is relying more and more on direct flights, the global economic downturn and continuing unrest in the capital appear to have unnerved potential real estate buyers.

On the current figures, Phuket and Samui are experiencing an oversupply that could take years to whittle down.

The expat market is largely a cash market because Thai banks will only grant loans to foreigners in rare circumstances.

Very few sales are being recorded on Phuket and Samui.

Three villas were sold on Samui in Q3 of 2009, the report says, while results have been equally stagnant on Phuket.

On Phuket, the report says, 13 villa projects were offering discounts of between 10 and 20 percent.

Given the outlook, it's little wonder that upmarket villa and condo estates have converted to resorts to retain cash flow and a positive future.

Phuket Villas
80 projects involving 1900 units

Average price: 30 million baht
Sold: 900 villas
Unsold: 1000 villas

Samui Villas
50 projects involving 800 villas

Average price: 29 million baht
Sold: 300 villas
Unsold: 500 villas

Phuket Condominiums
90 projects involving 5000 units

Average price: 8 million baht
Sold: 2780 units
Unsold: 2250 units
(Phuket City studio apartments have proved popular, attracting 44 percent of buyers)

Samui Condominiums
14 condo projects involving 500 units

Average price: 7.4 million baht
Sold: 250 units
Unsold: 250 units

**daveboy** · 17-03-2010, 12:28 AM

No real suprise.

**Muadib** · 17-03-2010, 12:32 AM

With property prices collapsing in many western nations, why do Thai's think they can get market price + 100%+ markup???

**lom** · 17-03-2010, 12:43 AM

Originally Posted by zubber

Three villas were sold on Samui in Q3 of 2009, the report says, while results have been equally stagnant on Phuket.

Originally Posted by zubber

emerges from the latest figures provided by the Government House Bank, which specialises in loans for housing.

The market is down, very much down but those ^ figures are plain wrong.
The Government House Bank can only report of sales where they are involved and that can't be many on the tourist islands.

**Beadle** · 17-03-2010, 01:04 AM

^ miss this bit?

The Director of the Real Estate Information Centre, Sammana Keetasin, reports that sales all over Thailand are down, but especially on the two holiday islands.

**Camel Toe** · 17-03-2010, 02:23 AM

10 to 20% WOW!!

You can buy a home in Detroit for a dollar, close to a public park.

**The Fresh Prince** · 17-03-2010, 02:31 AM

100% mortgages being offered on some housing developments in Bangkok.

**StrontiumDog** · 17-03-2010, 02:54 AM

Terrifying prices for houses in Thailand...30 million Baht for a concrete pile on an estate...no thanks. 600,000 Pounds!

Perhaps they might consider reducing the obscene prices...

FarangRed · 17-03-2010, 03:22 AM

and the end of this month all the transfer tax's go up thats going to help I'm sure

**dirtydog** · 17-03-2010, 03:27 AM

Originally Posted by zubber

Average price: 30 million baht
Average price: 29 million baht

Can't understand why people aren't snapping these bargains up.

**Camel Toe** · 17-03-2010, 04:55 AM

Originally Posted by StrontiumDog

Terrifying prices for houses in Thailand...30 million Baht for a concrete pile on an estate...no thanks. 600,000 Pounds!

Perhaps they might consider reducing the obscene prices...

Never happen. The Chinese would think of going into business unless they can turn a 10X profit. They'll sit on it till it crumbles.

**SHYTALK** · 17-03-2010, 07:01 AM

Whats worse is all the f*cking scams that are associated with the property market.You pay your 20% deposit of the 30 million, along with all the other dozy buggers, and the developer clears off with your deposit and the thing never is built.
And them that do get built can never get the title deeds as the banks hold them against developer debts.
Better pissing it against a wall.

**Bexar County Stud** · 17-03-2010, 07:09 AM

Yeah, the rigid inflexibility when it comes to discounts is pretty interesting. At bottom, it must be a face thing. I'll never understand it.

Around my burg it's not uncommon to see houses sit for years with a "For Sale" sign out front. We tried calling these folks and inquiring if they would consider renting, only to have the owners go apeshit. "Why you call me? I want to make big money, I no rent." OK, Khun Nocashflow, suit yourself.

**Butterfly** · 17-03-2010, 07:43 AM

Thai and Chinese don't have the concept of time value of money,

sometimes it helps to get bargain, sometimes it's the other way around

**malako** · 17-03-2010, 07:56 AM

Originally Posted by StrontiumDog

Terrifying prices for houses in Thailand...30 million Baht for a concrete pile on an estate...no thanks. 600,000 Pounds!

Perhaps they might consider reducing the obscene prices...

Exactly. Why pay a million dollars for a place you could rent for the rest of your life for a fraction of that. Especially when having such an asset in Los could mean that you might commit suicide by stabbing yourself in the back 8 times, shooting yourself in the head twice whilst tying a plastic bag over your head and jumping off your balcony.

**peterpan** · 17-03-2010, 07:56 AM

Originally Posted by Butterfly

Thai and Chinese don't have the concept of time value of money,

sometimes it helps to get bargain, sometimes it's the other way around

The old Chinese hag that is the developer of our village has property sitting here unsold since before the four years we have been here and every year she puts the price up.
She sells just enough to keep going, but must have 60 to 80 million in unsold stock, she has just purchased another 100 Rai to build on.

She lives in a 3 bedroom bungalow with her simpleton husband and her sons offspring and their obese wives, 7 of them crammed into one small bungalow.

**Butterfly** · 17-03-2010, 07:59 AM

Originally Posted by peterpan

and every year she puts the price up.

yep, sometimes they get it backward, hilarious

**Spin** · 17-03-2010, 08:27 AM

^ The Thai Chinese love amortization, I think they were put on this earth to amortize

Thaiguy · 17-03-2010, 08:32 AM

Originally Posted by StrontiumDog

Terrifying prices for houses in Thailand...30 million Baht for a concrete pile on an estate...no thanks. 600,000 Pounds!

Perhaps they might consider reducing the obscene prices...

Are these figures correct - ? can't believe this.
Last time I looked about 2 years back I could buy a condo in Jomtien for around one million bht ?

**jizzybloke** · 17-03-2010, 08:37 AM

^Try reading the fucking thing!

Originally Posted by zubber

Phuket and Samui

Originally Posted by zubber

Phuket, Samui

Originally Posted by zubber

Phuket and Samui

Originally Posted by zubber

Samui

Originally Posted by zubber

Phuket.

Originally Posted by zubber

On Phuket

Originally Posted by zubber

Phuket Villas

Originally Posted by zubber

Samui Villas

Originally Posted by zubber

Phuket Condominiums

Originally Posted by zubber

Samui Condominiums

**robuzo** · 17-03-2010, 10:09 AM

Originally Posted by malako

Originally Posted by StrontiumDog

Terrifying prices for houses in Thailand...30 million Baht for a concrete pile on an estate...no thanks. 600,000 Pounds!

Perhaps they might consider reducing the obscene prices...

Exactly. Why pay a million dollars for a place you could rent for the rest of your life for a fraction of that. Especially when having such an asset in Los could mean that you might commit suicide by stabbing yourself in the back 8 times, shooting yourself in the head twice whilst tying a plastic bag over your head and jumping off your balcony.

Rents are comparatively cheap, too. Makes no sense, especially for retirees.

**FailSafe** · 17-03-2010, 10:34 AM

These houses aren't aimed at retirees or locals that will live in the them full time- they were aimed to be sold as rentals (with the owner perhaps using the house a few weeks per year).

The agents and developers successfully manipulated the market in Samui from ~2000- around that time the most expensive house on the island was about USD$500K- a few years later and there were a dozen projects in the million dollar+ range- all these houses were marketed to prospective buyers as being able to pull in rental income of 1k+ (USD) per day with an estimate of 80% occupancy (cough- bullshit)- the first few "villas" (hate to use that word for a house on a small plot) did manage to pull in that amount, but soon the market was glutted and rental rates and occupancy dropped drastically (this, of course, wasn't advertised by the developers).

The smart developers (I mean the ones that actually produced their houses- not the ones that robbed people) took their money and bailed by about 2007- the ones that are left that built huge villas with their own money are now pretty screwed as they can't sell them, and the rental income they can actually fetch won't even keep up with bank payments, and these developers are going out of business one by one.

**Beadle** · 17-03-2010, 12:52 PM

A correction has been long overdue.

I wonder if a clampdown on foreign criminals breaking land ownership and real estate law is too much to hope for?

**Bexar County Stud** · 19-03-2010, 07:50 AM

Originally Posted by robuzo

Rents are comparatively cheap, too. Makes no sense, especially for retirees.

Exactly, which raises a question I've always wanted to ask: Why are so many farangs interested in building houses here?

When I first moved here, I too was intrigued by the idea since housing prices where I came from where around 300k US for a starter. But besides the obvious fact that we can't own property here, there's the sense that it's a losing investment.

I don't understand the fascination with building a big fuck-all mansion here. I guess I ain't got money to burn.

Rents have been remarkably stable in the 8 years I've been here, and I don't see that changing going forward, unless we see a dramatic rise in the average wage.

In fact, the first place I rented here the landlord actually reduced the rent after a few years! First time that's ever happened to me.

"Why buy when you can rent," golden words to live by IMO.

**genghis61** · 19-03-2010, 08:10 AM

Originally Posted by malako

Exactly. Why pay a million dollars for a place you could rent for the rest of your life for a fraction of that. Especially when having such an asset in Los could mean that you might commit suicide by stabbing yourself in the back 8 times, shooting yourself in the head twice whilst tying a plastic bag over your head and jumping off your balcony.

my suicide plan! how did you guess? may not have to use it now I'm a committed 'renter'
I moved here with the intention of buying, so pleased i listened to the advice - "don't".

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