Housing market

[niggle]

OK Now listen this is only what I heard from estate agent yesterday so dont get into the usual property forum insults about buying property OK ?

Housing market in HH has fallen throught the floor due to uncertainty of political situation, land ownership laws etc - this is why so many housing estates are half finished, some work has stopped etc
And yes, the land office is looking at company formation, not systematically but randomly
Recent meeting with officials (of land dept) suggests that new government whoever that is, is seriously considering amending land ownership laws to encourage retirees of 50 plus, There would be a complete separation of all land issues for foreigners into 2 categories - retirees and business people/workers with separate regulations.
Whether this will happen or not is anybodys guess or how it would work in practice but he seemed fairly confident this is very likely as the govt has at last realised the amount of cash and business that the foreigner brings in.

Now don't forget - be nice - no shouting or insults please

[Randy Cornhole]

There was to be a big new estate planned behind where I am renting, but they stoppted pretty sharpish last year. They had cleared the land and brought in the concrete drainage pipes. They now have been taken back and the land is starting to get overgrown again. The owner of the land, Khun Dusit is very shrewd,
I have a friend who rents on Dusit 8 and he says at least half the houses remain unsold. so there may be something in what you say.

[HHTel]

Strange, I was asking recently why the opposite is happening. If housing development has slowed down, then why are new developments getting started south of Hua Hin. I gather some agents are not selling houses any more but selling investment. Same thing different aspect.

[niggle]

I agree its rather confusing. Ceetainly in the small area we live in, there remains several houses unsold / for sale.
I gather as far as estate agents are concerned, things have fallen very flat. Some condos selling, a few leasehold but Thai developers of course are are not keen on leasehold as they want to build, sell and make quick profit - same everywhere in the world

[buksida]

If this is the case then as it appears to be can someone please explain why the prices are still through the roof if there is no longer the demand?

[gaijin]

Malaysia has a retirement program that actively encourages foreign retirees. Under their scheme you can own up to 2 houses. Further, you can buy them as investments before moving in.

Foreign retirees can be an important wealth generator for Thailand and Malaysia. I suspect things will not change until Thais realise that their prosperity is being compromised to the benefit of Malaysia and Vietnam.

Good post as from this distance it is hard to get an accurate take on the HH scene.

[niggle]

I think house prices in hua Hin are still high for 2 reasons
1. It is early days yet and demand has to be low for some time before prices fall - a need to offload assets needs to set in first
2. Hua Hin will never be very low prices due to bangkok proximity for weekends and due to location. Location is what drives prices.

I understand that a similar programme to teh Siler Hair Scheme in Malaysia is bieng considered

[Norseman]

I have a friend who rents on Dusit 8 and he says at least half the houses remain unsold. so there may be something in what you say.

That is not correct my friend.
Of the 102 houses in Dusit Land 8, 3 are not yet sold.
But yes, plenty are for sale, but they are owned mostly by farangs.

[Randy Cornhole]

Sorry Norseman I stand corrected. I was not sure a it was onlt a friends perception...

[Jockey]

If this is the case then as it appears to be can someone please explain why the prices are still through the roof if there is no longer the demand?

Property in Thailand is now a buyer's market and 2nd hand condos are selling 20 to 25 % below seller's asking prices.
Best deals in condos are at the new condo developments at early off-plan prices, but there are obvious risks associated with this type of investment.
Most 2nd hand homes are on the market at prices way above realistic expectations
Houses sell if the asking price is more realistic (prices are coming down on land & houses)
Projects are hoping for another "property frenzy" over the high season. If it doesn't materialise, watch prices at certain developments fall or see many "special promotional deals", or see projects abandoned half way finished.
Good developments will continue to sell, but I would rate 1 "good" development for every 3 "bad" developments.
Estate agents are finding competition tough.
When you see "prices for sale " you should be aware these asking prices are different from "prices sold" of which there are no data to study.

[Wanderlust]

As with any property market there are factors which will depress and inflate the particular property in question, with some properties immune to these pressures because they offer something different (e.g. beachfront, by a golf course etc). Hua Hin will always be a desirable area because of location and history, but certain parts of Hua Hin will fluctuate as regards price because they have distinct disadvantages, e.g. flooding or overcrowding (Soi 102 anyone?). Some/many tourists will pay over the odds because the price is cheap compared to their home country, and because they are not buying as an investment but as a holiday/retirement home - as long as they get what they want within their budget the price is irrelevant. Even with the prices as they are there are still many bargains (in European terms) to be had, but the expats who live here permanently can only see life becoming more expensive. The political problems are a short term thing, but life in Thailand is never straightforward, and any investment has to be viewed over time, wherever you are. You may make a fast buck, or lose a quick fortune if you are too hasty, but you have a better chance of making a nice home here, and possibly having a very good investment, but that only comes to fruition if you sell and buy somewhere cheaper. Bang Saphan anyone?

[caller]

Excellent post by WL and very upfront one by Jockey, which is appreciated. Also worth factoring the knock on effect of prices for property levelling out in the UK and elsewhere, irrespective of what's happening in America, which may or may not impact on Hua Hin?

Luckily, I next visit LOS in April, after the high season - will there even be one?

From a UK perspective, things are getting tighter, taxes are forever on the increase, petrol is virtually a pound a litre with more increases on the way, and I've just learn I have to pay an extra 500GBP in NI conts from next April (WTF), plus factor in above inflation increases in Council Tax again.

I exist to pay taxes for new schools to be built for all the new immigrants arriving, seemingly (a side rant, ignore it).

[gaijin]

HH has changed enormously since I first visited in 2001. The growth of infrastructure will lead to a growth in the population that will in turn lead to a growth in the infrastructure.

HH is not reliant on farangs and is a popular destination for people from Bangkok. Among farangs, it has a strong and growing tourist base. This leads to more jobs for local Thais. In the last several years, we have seen the permanent farang population balloon. I have reread that the permanent farang population is about 3,000. Whilst one hears the odd grumble from those who have made the more, the impression that I have is that most people are very happy with their move.

When the new road from Bangkok is eventually built, the kick on effect this will have for HH will be enormous. The town / city will continue to grow. Personally, I believe that just about, whatever you buy in HH today will appreciate due to the natural laws of supply and demand. There are some areas that will not do well, as one would expect, but overall HH is a growth market.

I recently read that a development in HH is being marketed in China. At some point HH is also likely to experience growth from the Chinese and Indian tourists and investors.

The short-term position is interesting, and like anything will fluctuate. The current restrictions on foreign ownership will eventually be brought into line with international norms, and when this happens, I would expect to see demand and prices pick up.

[turnip]

Why do houses remain unsold or unbuilt ?

Well as far as a lot of developers are concerned they are land speculators

So when it comes to housing projects/estates for the old farang it's easy pickings for them

Once they buy a plot of land they need to finance their loan asap so the old farang does this with his 10 - 20% deposit upfront

Once the developer has sold say half a dozen or a dozen units he will has have covered his intial outlay

Now further units sold will be 100% profit

Any profit from building the houses is minute compared to that made on the land

So the devloper is in no rush to finish the rest of the houses and has even less concern on finishing a developemt entirely

As owners move in they detect faults and this then takes up the developers time and eats into his profit

Hence poor after service

While all this is happening the developer is off buying up more land and repeating the cycle

It's a bit like pyramid selling

My advice to you is find a developer with a proven track record , don't trust anyone who has multiple projects underdevelopment at the same time

Even if they tell you that everything is finished go along and find out for yourself

Repairs can take for ever to fix particularly if your developer doesn't accept liability

So you may have to pick up the bill and argue later

There are a lot of sharks out there , many farangs , so don't get bitten

Best of luck