To sell or not to sell

[faq2mfh]

Finally have time to do a little research on Hua Hin developments and real-estate prices etc... Lots has change in the last 2-3 years... I found some of fancy web sites with many house listed for sale. Are houses selling like hot cakes in Hua Hin and area? About 3 years ago land in Hua Hin was selling for about 12,000bt per wah. Has it doubled since? Seems to be many houses in the 40 + million range. Cant remember seeing any of those just a few years back. Where can I find information that would keep me well up to speed on how the real-eastate market is doing in Hua Hin. So many house for sale... Are any of them moving for those prices?

[sandman67]

I'm no property expert, or economist, but I do see he news telling me that the UK, EU, America, and now China and Japan are all going into recession. House prices in the UK and France, and presumably the US, are falling and property markets are stagnated.

I dont see how Thailand can resist this trend....although things dont seem bad at the moment its logical to assume that when China and Japan go into recession then the rest of SE Asia will surely follow.

So

even though the property market here is la la land and seems to be at a high level, bear in mind that recession will eventually hit, and even the boho Thai elite crowd will feel the pinch. Foreign investors will certainly drop off, as evidenced by less tourists this year...so its logical that farang house buying will fall off too. If theres a lag time - which there seems to be - that would mean if you buy now you will buy at the top of a peak just before a fall in the market in the short or medium term (early next year).

What I do know if of four mates who have been selling two have sold and two havent..... and it didnt seem price related as all four were in the 10M Bht range....

who knows? Maybe, and this is the biggie, we are months away from a 1997 size collapse in the property market...in which case if you are buying long term or to retire you are ok...buy to speculate or rent out and you get screwed.

good luck mate

[IHF]

with the baht so low against the pound, I know of several people, delaying payments for new houses etc, several agents I know have not sold anything for months, even complaining of people wanting to sell at the purchase price. because if you transfer money out now, you will make 20% profit from what the exchange was when you bought.
but new properties wil be 20% more expensive.
drive around any soi or development and look at the amount of faded for rent or for sale signs. I know of several nice houses been on the market for 2 yrs. and some projects that have n't sold anything since they started.

[sandman67]

here y go bro

have a read of this

http://news.bbc.co.uk/2/hi/business/7727893.stm

now if thats whats happening there....imagine whats gonna happen here when the lag kicks in.... The real fun will start when the BKK bohos and local landowners start feeling the pinch...early signs that the Thai economy is starting to suffer are in the Post and Nation today...rice sales, fish exports etc all getting hammered.

IHF also makes a good point re currency.....Im getting caught by that at the mo...as are most UK retirees and pensioners here i expect

[faq2mfh]

We built a home in Hua Hin in 2004. Shortly after I picked up a job in Singapore and been here for almost 3-years. At first my wife didn't want leave the new house but it got too difficult with having a kid. She agreed to move to Singapore a year ago and visits Hua Hin on school holydays. We have fulltime house sitters but that's expensive long term . The last time I was in Hua Hin was the day of the coup. My wife freaked out so I flew down that same day. I never imagined that Hua Hin continued to boom afterwards. And I get mixed reports from my wife who spends most of her time listening to siblings who do a lot of talking but not much else. 10-years ago there were hundreds of bungalows for sale at outrageous prices. Most never sold... I think people were seeing if they could land a big one... And that's my question now... I'd like to find a source of information to help me measure or at least understand the real-estate market in Hua Hin.

[buksida]

I'd like to find a source of information to help me measure or at least understand the real-estate market in Hua Hin.

You've already found it! Here you should get both sides of the coin.

One thing that baffles me is that supply far outstrips demand, there are literally thousands of properties for sale in Hua Hin, its a buyers market. So why are the prices still so damn high? The only thing I can think of is that the owners and developers are affluent enough not to be affected by the financial downturn so they don't care whether the property sells or not and are keeping the prices elevated.

I posted this a few months ago and nothing has really changed:
http://www.huahinafterdark.com/forum/wi ... t9817.html

[STEVE G]

In the Bangkok Post last week there was a prediction of a 10% drop in the Thai real-estate industry as a whole next year, but I can’t remember exactly whether that was a drop in prices or sales; I’ll try to find the article later.

[hhfarang]

I can’t remember exactly whether that was a drop in prices or sales

I think a drop in sales would create the drop in prices... so both may be true...

[STEVE G]

Here it is; Bangkok Post 12th Nov:

The overall real estate market is likely to shrink 10% next year so developers need to find niches to survive, said Thongma Vijitpongpun, the CEO of the country’s second-largest developer, Preuksa Real Estate Plc (PS).

In his view, the effects of the unstable political situation will linger until the end of the first quarter next year and then consumers will regain confidence regardless of the political climate.

Chief business officer Prasert Taedullayasatit said developers would be encouraged to bring new supplies into the market continuously if the government extended tax and fee reductions, now scheduled to expire on March 28, 2009, for housing sales.

The developer also expects the government to support the extension of housing loans through the Government Housing Bank. Currently, almost 30% of the company’s sales are being cancelled, including 17-18% of sales that are called off due to mortgages being rejected.

Though loan rejection and diminishing consumer confidence may affect PS’s revenue realisation, Mr Prasert said real demand would mean starting campaigns to spur unit transfers and convert backlog sales into realised revenue.

Preuksa will also try to reduce its 700-million-baht inventory, which has a selling price of one billion baht.
As blue-collar workers are likely to be hit first by the economic situation, Preuksa will shift its focus from offering units priced between 700,000 and 800,000 baht in Bangkok outskirts to offering units priced from 1.2 million baht in locations closer to the city, targeting white-collar workers as well as some blue-collar workers.

The company expects to generate sales of four to five billion baht in the fourth quarter with the launch of eight new projects. It is also aiming for four to five billion baht of revenue realisation in the last quarter, adding to 8.75 billion baht earned over nine months this year.

Next year PS may issue bonds worth one billion to 1.5 billion baht to raise funds for its business investment. It requires three billion baht for land purchasing and around five to six billion baht for construction each year.

PS will also sign a memorandum of understanding next week with its Indian partner for developing a townhouse project in Bangalore comprising 400 to 500 units worth up to one billion baht about 17 kilometres from the city’s IT centre. The company plans to invest 200 million baht in the project.

Mr Thongma said the price per unit would be around two million rupees — a segment with almost no competition as most residential units there are condominiums and the current price range is around three to four million rupees.

PS will apply its know-how in construction for this project, hoping to undercut current Indian costs by 20%. It expects to realise revenue from this project in the third quarter next year.

PS shares closed yesterday on the SET at 4.80 baht, down 25 satang, in trade worth 5.757 million baht.

[Guess]

....................The last time I was in Hua Hin was the day of the coup.................. I never imagined that Hua Hin continued to boom afterwards. ..............

It did not boom afterward, in fact the slow down had already begun.

This site gives some interesting Financial information as a whole.

http://www.bot.or.th/English/Pages/BOTDefault.aspx

House prices across Thailand as a whole have gone down slightly. The thing is that building costs have risen and land prices remained the same. Nobody wants to sell at a loss and there are many that can afford to sit tight in Hua Hin and ride the storm.

If you are selling your own place then you must have an idea what you would accept for it. If similar properties are advertised for more than you can undercut and give yourself a better chance of selling.

[Super Joe]

One thing that baffles me is that supply far outstrips demand, there are literally thousands of properties for sale in Hua Hin, its a buyers market. So why are the prices still so damn high? The only thing I can think of is that the owners and developers are affluent enough not to be affected by the financial downturn so they don't care whether the property sells or not and are keeping the prices elevated.

What I think it is Buksi, and this is based on speaking to many developers and agents, regarding new developments, there are thousands of houses on the market but currently they are just plot allocations on a plot plan. They do not yet exist only the land does.
Not many developers have a stock of already built houses, they build to order, those that do steam ahead are the minted one's so do they need to sell off cheap ? Maybe, maybe not.
Most developers try and keep ahead by a few houses, but majority of these houses you see empty or half built have customers. 50% of the houses on my first 2 projects are empty, the customers are back home and only use them now and then. The current one is full of half built houses, all bar one has a customer.
So imo there isn't an over supply of houses out there with desperate owners willing to drop prices. Many developers are doing what they can, throwing in furniture, or air-cons etc, but they only have so much to play with what with the land and building contractors prices going up all the time.

Re-sales not sure, maybe customers willl drop prices, maybe many who bought cash when they retired out here and have no crippling monthly payments will sit it out. What you will get unfortunatelly is half built projects until it picks up again.

SJ

[sandman67]

SJ

but dont you think that if, as predicted, EU economies continue heading south next year, that at some point absentee owners will start looking to dump these second "holiday homes"? even if bought outright they still cost to keep and maintain.....

I dunno....whats your take on it?

[Super Joe]

Yeah good point, I don't know much about the re-sale market, it depends how desperate they are to get hold of the cash. We're basically talking about those that re-mortgaged to buy here. If the interest rates are going down back home 3% base rate, around 5% mortgate rates, then maybe monthly payments will not be too burdening. I know people are coming off their 3 years fixed rates etc and it then goes up, but Lloyds have just cut their rate by 1.5%, other banks are said to follow suit. In the late 80;s early 90's crash the rates rose from 8% to 16% (or there abouts), people couldn't meet the payments and had to sell cheap or were getting re-possessed.

Aren't people just sitting it out back home ?
"Less than one home per week is being sold by estate agents, as sales continued to fall in October, with the average agency recording just 10.9 sales in the previous three months, according to Rics."
"Property website Rightmove today reported that up to 300 estate agents were quitting the service each month as they struggled to survive the property downturn"

even if bought outright they still cost to keep and maintain

running cost with pool is about a grand sterling per year, many people rent out too, can see rental market improving when people aren't buying here.
Time will tell, we're 6-9 months away from the real squeeze imo, there certainly will be some bargains to be picked up.

SJ

[Super Joe]

Another big factor in all this is the 'kin exchange rate. Someone from overseas whose been seeing this coming and waiting to pick up a bargain now finds a house where the owner has dropped the price by 25%, but the buyers money has devalued by 27% against the Baht over the last year.

SJ

[migrant]

Here in the States the economic problems have caused many to sell their second homes, but there is a difference I believe.

Most second homes here are mortgaged, so selling saves the monthly payment, and the yearly property taxes.

One thing about homes in HH is most (I believe) are paid for since it is difficult to get a foreign mortgage, and the upkeep costs are much lower, no property taxes.