Possibility of selling property now

[thebears]

I was just looking at a property report which suggests that prices of houses are approximately back to the levels of 2006...

[Mod Edit] Sorry, but that report is contained on a property website, and as such is not permitted here.

I don't believe it necessarily.

Given the depressed market conditions, are any detached properties selling at all in this area?

What reduction in price (say from the 2006 and 2007 levels) would one expect to set in order to move the property? (If indeed it is possible to sell)

[brianks]

Interesting statement. Doesn't jive with my experience living here. Our housing estate sold out in 6 months. The next one by same builder just sold out in 6 months. His next project already has many interested before it starts next January. It appears to me that if you have a good, reliable and honest builder the projects are selling. We bought our for 5 million 2 years ago. Next project same model will sell for 6.8 million. Yes, there are probably many down to 2006-7 prices but look carefully at project, builder and how being serviced. Those are the reasons for the lower and more reasonable prices.

[hhfarang]

I can guess which developments Brianks is referring to and yes, that particular builder is selling houses like hotcakes. If it's the one I'm thinking about the 5th project (underway) is already sold out and they are already selling the 6th which hasn't started construction yet. This is an anomaly imo and is happening because this particular builder offers some of the best quality seen around Hua Hin including furniture at a very reasonable price.

Most other developments aren't doing so well. But the op's question was about how much reduction from 2006 prices would he have to offer to sell (I think). My home was finished around that time and while it may not be as sale-able as some due to it's size, price, and location I know from marketing it that I would have to reduce the price at least 30% to 40% (from the 2006-7 evaluation by a trusted real estate agent) to even consider an offer in this market. A smaller (under 10 million baht) home in excellent condition in a desirable location may go for the same or what it was valued at in 2006.

The problem with selling a resale home is that if people (especially Thai partners) see that they can buy a similar new home for the same money, they will go for the new one every time.

It all depends on the design, condition, price range, and location, location, location...

[thebears]

It sounds like the developer has just the right ingredients to be successful with the project, and it's good to hear of somewhere like that.

By the way, is the restaurant still running in the development? I have just found details of it from Brianks' location! It sounds great.

But back to the question. How do we account for cases such as the fire-sale auction that took place recently, in which the large plot of land and an almost complete house, sold for 8.3m? It seemed that the place almost couldn't be given away.

Is it perhaps the case that almost all buyers want a newly packaged home, with furniture, everything included and no bother, and simply that a second-hand home is not realistic to sell because it might incur work. In other words the property market is a retail market, similar to going out and buying a new suit? In that respect, the market is very different to the more sophisticated buy-to-renovate market that we have in United Kingdom and in which properties have a real value instead of a showroom value.

Therefore, does one buy a property here to live in it and almost write-off the value?

[hhfarang]

If you're lucky and buy in the right place, you will probably get your money back plus a profit when/if the western economies pick up.

If you end up in a community that does not get finished, has poor construction and problems, gets bad press, ends up with a bad or trashy surrounding area which is out of your control, then expect to die in it or take a loss.

... and yes, that restaurant is still operational and doing well.

[julian777]

Buy in Khao Tao. its the more upmarket area, in 2 years you will be in for some profit. just look at Malibu resort on the beach. if you want cheap, buy in the west, but dont expect any resale.

[Super Joe]

I was just looking at a property report which suggests that prices of houses are approximately back to the levels of 2006...
I don't believe it necessarily.

Given the depressed market conditions, are any detached properties selling at all in this area?

What reduction in price (say from the 2006 and 2007 levels) would one expect to set in order to move the property? (If indeed it is possible to sell)

Hi thebears, I use that site a lot and it's generally useful for country information around the world, but frustrating that no-one's collecting data area wise, so any graphs you see there are usually impossible to relate to Hua Hin as they are 'muddied' by Bangkok, Phuket, Pattaya etc. My honest opinion is that where they show prices dropping around 2006 this is Phuket & Bangkok, with their much larger market shares, dominating the data. Generally Hua Hin property prices continued increasing through 2007, and for the more soughtafter developments, in the popular price range (say 4-8m Baht) were increasing still in early 2008, then later in 2008 suddenely hit a massive wall. That is my experience here and as I'm involved in it I check the prices everytime I pick up a paper, magazine or come across them on the net.

So the graph they show on that site of prices dropping around 2006, is a year and a half too early for Hua Hin, and my impression is we are back around 2008 prices now generally, and you can't over emphasize the 'generally' enough as the town is full of red herrings imho. We can find plenty of examples where certain developments stopped selling in early 2007, and there prices are back to 2006 levels and there's a very good reason for that, they are 'generally' not the places most buyers want. It's like sitting around with your mates complaining there's no decent birds in the clubs any more when someone pipes up that such&such has more spare birds in it than all the others put together, so off you go that night only to find the place rammed full with fat birds, wall to wall red herring, all wearing Chanel no. fish. I'm sure there's better analogies

So I think there are decent enough bargains to be found, more so with resales and less soughtafter places ranging through to the most desired. I can honestly say it's been much busier this past 12 months than the previous, but also that this past 12 months are still miles behind 2004-2007. The question for anyone serious about buying is how long is there before things start to pick up in ernest, will prices go down any more etc, I personally haven't seen prices dropping anything resembling significantly for the more soughtafter developments since the big reductions in 2009/early 2010.

The Bank of Thailand property index for detatched houses below shows prices have been increasing since Q2 of 2010, but as with above I don't believe this represents Hua Hin but the recovery recently of Phuket so I'd say this was more 0%, 0%, 0% & 0% for Hua Hin, but if I'm right that we're 2 years behind them then we 'may' see improvement in the market next year some time. Who knows

SJ

[STEVE G]

Therefore, does one buy a property here to live in it and almost write-off the value?

One thing to bear in mind is that the land itself will generally retain or increase in value even if the house doesn't, so if you have an interest in the future worth of a property, a small house on a large plot might be a better buy than a big house on a small one.

[Whaler]

This is an anomaly imo and is happening because this particular builder offers some of the best quality seen around Hua Hin including furniture at a very reasonable price.

The problem with selling a resale home is that if people (especially Thai partners) see that they can buy a similar new home for the same money, they will go for the new one every time.

It all depends on the design, condition, price range, and location, location, location...

Both of the developments up there are doing well I don’t think it's so much of an anomaly but more a reflection of build quality and the packages on offer. Although the price increase Brianks notes over the last 2 years is more to do with increase in material costs and probably in-part due to more sub agents being used to maintain sales momentum.

I think like most places in the world newbie buyers (like myself) will always tend to go for new build especially on the temptation of customisation and are not restricted usually by having to live elsewhere locally whilst it's built. It's part of the charm buying a holiday home. Of course there are always exceptions and really it should be better bargain to by used.

I would never expect at the lower end of the scale 3.5-5M to make any money as the choice for buyer is too large new and old, mid range up to 10M you would hope to not lose, 10-20M too many other factors come in to play IMO and it can go either way. Buying on large developments on a golf course or condos etc will always be capped be the current sales but you would hope a better than average chance of an easier sale.

[Super Joe]

Therefore, does one buy a property here to live in it and almost write-off the value?

One thing to bear in mind is that the land itself will generally retain or increase in value even if the house doesn't, so if you have an interest in the future worth of a property, a small house on a large plot might be a better buy than a big house on a small one.

Yes, according to the BoT index land prices never actually went down in value across any one year, which is pretty remarkable in the biggest recession since the great depression. Thais don't seem to care too much for Western recessions or reducing prices, this together with contractors reducing prices by next to nothing, was the main reasons why prices did not drop as much in the new build market, reductions were only made possible due to acts of unparalleled generousity as selfless developer after selfless developer took machettes to their margins...

The other reason I think Steve makes an excellent point re: large plot and smaller house, which was covered quite a bit in the recent 'retirement/how much do you need to live on' thread, is the flexibility to build on your land. This could prove invaluable in the future when maybe 2m Baht of building could result in a 6m Baht sale, or 40-50k month rental income, with the only loss to your property being the side garden.


SJ

[TypicallyTropical]

One thing to bear in mind is that the land itself will generally retain or increase in value.

I don't want to cry wolf, but don't take anything granted. I bought my first piece of land in 1999 here in Hawaii, and 12 years later I just bought another piece of land of the same one acre size in the very same subdivision for exactly the same amount of money I paid in 1999!

[thebears]

Is it not the case then, that there are simply very few buyers at the moment but also very few good developments?

Therefore, the buyers who are determined to purchase here, will go for the best option, which happens to be where Brinks is located. They will also be more discerning about what they buy and also consider the risk of investing in Thailand, with the political shambles etc. They will also naturally want to limit their exposure, in terms of capital.

Effectively therefore, the market is vastly different to 2006 and 2007, in which there were many developers, some good and some bad.

[Super Joe]

Is it not the case then, that there are simply very few buyers at the moment but also very few good developments?

Therefore, the buyers who are determined to purchase here, will go for the best option, which happens to be where Brinks is located. They will also be more discerning about what they buy and also consider the risk of investing in Thailand, with the political shambles etc. They will also naturally want to limit their exposure, in terms of capital.

Effectively therefore, the market is vastly different to 2006 and 2007, in which there were many developers, some good and some bad.

I would say there are still a lot of good developments around and still a lot of not so good one's, I wouldn't really use the word 'bad' personally as I only ever saw 1 or 2 that I'd actually class as bad. It's worth remembering that some of the one's others may refer to as 'bad' were in fact very cheap properties, and therefore arguably value for money. I know people who bought 'bad' properties for 3m, spent 0.5m on them and suddenely had properties comparable with other 5-6m Baht one's around town.

But I think the first thing you said there about there being 'simply very few buyers at the moment' hits the nail on the head. But the thing with new build properties, as I've been saying on here since 2009, is that developers never had an ittinery of stock to 'firesale', most built to order bar the odd one or two and because of fixed costs... land, contractors (materials, labour) taxes, fees, commissions etc then there was only a certain amount that prices could be reduced by ie: the developers margin. Once you've cut that element by half say, which gives you an overall reduction on 10-15%, then it gets to a point where any more reduction becomes unfeasable and you may as well just sit things out. Basically the remaining land plots are a developers only real 'stock/products', and many of small individual family operators here, so their current development may well be their last development.

SJ