How is the market today

[faq2mfh]

Thanks for the info guys… Another thing that stands out, at least to me, are swimming pools… Is there not a market for homes that don’t have swimming pools? Never had one myself but they seem to be an overrated luxury. Do they really add a lot to the overall value of a property in HH? Your thoughts….

[MrPlum]

I spent 7 years in the Algarve. Houses with pools always sold better than those without. Bit like the vendor that can market a property 'with seaviews'. Even if it's only a thin ribbon, people will buy. 'With pool' and with 'sea views' are key selling points.

As someone who actually uses a pool, I would certainly seek out a property that has one. Most people who have never had to maintain a pool, I would say, want one. Those who have actually experienced the cost of upkeep and work involved in maintenance, tend to lose their enthusiasm.

Hua Hin may be different but I doubt it.

[interested]

B.B.

I have a property for sale, I know in order to sell it I will probably have to take a loss of between 1 to 1.5 million.

Invest is not a term I would use in Thailand, the best advise I can offer you is; do not spend more than you can afford to lose!

My real concern is what a lot of these developments/properties will look like in 5 years time? Some developments seem to 'hold up' better than others.

Knowing what I know now I would never have brought but would have rented, you live and learn.

As for pools, I have and would recommend a 'salt water' system, I think mine costs me around 30 to 35k baht a year to run.

[Tony_S]

B.B.

I have a property for sale, I know in order to sell it I will probably have to take a loss of between 1 to 1.5 million.

Invest is not a term I would use in Thailand, the best advise I can offer you is; do not spend more than you can afford to lose!

My real concern is what a lot of these developments/properties will look like in 5 years time? Some developments seem to 'hold up' better than others.

Knowing what I know now I would never have brought but would have rented, you live and learn.

As for pools, I have and would recommend a 'salt water' system, I think mine costs me around 30 to 35k baht a year to run.

I will be moving to Hua Hin in a couple of months and after seeing how the market has gone stale have decided to rent rather than buy. It never feels like your own place when your renting but it gives you more freedom to upgrade/downgrade or move around.

[lazerlab]

I just sold my house in Hua Hin with no loss. If you research the market and take time to find a god deal you would not lose on your investment. The losers are the people that buys the first house they stumble over to a mutch to high price. I have been living for free one year. You just have to be very selective. If you rent a house you will lose money every mount. If I had rented the same house it would have set me back 330.000 THB.

[valrhona]

It's a very simplistic approach to say that you "lose" money every month when you pay rent.

It's an excellent point that good research needs to be made before purchasing a property.

What needs to be looked at is whether you can make more profit from the amount you sink into a house then what you would pay in rent.

For example, if I have 4 million Baht, I expect a return of at least 10% when I make my investment. That means that if I paid 300K in rent and make 400K in interest, I'm ahead by renting. That's why a good investor would never pay a 4-5% mortgage on a house, you can use the remaining cash and make an extra 4-5% easily either by purchasing another property or by spreading your investments.

In most long term studies, equities outperform real estate. Of course you can take anecdotal evidence of someone timing the market(whether it's real estate or stocks) and claim that one if better than ther other but over a long period of time, the numbers don't lie...

After doing the research and making the calculations. I've concluded that at this time weighing in risks and rewards, I believe that renting makes much more economic sense than buying in the current situation. It gives me a lot more flexibility and allows me to travel more and make more money.

Of course if you leave your money in the bank earning close to zero interest then it makes a lot more sense to buy a house...

[Super Joe]

What needs to be looked at is whether you can make more profit from the amount you sink into a house then what you would pay in rent.
For example, if I have 4 million Baht, I expect a return of at least 10% when I make my investment. That means that if I paid 300K in rent and make 400K in interest, I'm ahead by renting.

Hi, not sure if I've misunderstood your assessment above but isn't there something missing from the equation ? Historical data, since the mid-70's, shows an average increase in property prices in the US & UK of approx. 10-12% and that's taking into account the current drop in prices, otherwise they'd be a few points higher. I know this is Thailand but it's a good guide.
So if you actually bought the theoretical 4M Baht property you are on average already going to achieve your expected 400k or 10% interest gain from investing the property purchase capital. However by purchasing the property you are not paying out the 300k yearly rental fees, therefore 400k up per year, rather than -100k down in your example. Or have I missed something here

Also your average Joe like me doesn't understand and wouldn't touch the markets with a barge pole, we believe them to be too high risk, so we would be even worse off renting as our capital would be in banks. It's also fair to add that there's always a potential risk here owning via a Limited Company if no Thai spouse, but with a Thai spouse you're pretty covered with a lifetime Usufruct with third-party agreement for the event of divorce.

As you rightly pointed out though, the current global economic situation has to be taken into account.

SJ

[valrhona]

Mmm, I'm not sure where you got your data for these kinds of increase in real estate. Typically, the studies seem to indicate a return slightly better than inflation. With your numbers, a house worth 50 000 in 1970 would be worth around 700 000 dollars today. Then you have to take into account the depreciation of the building, furniture and fittings, maintenance, property taxes, insurance etc... I know of very few places where you would find that kind of price increase. In most markets, these kinds of houses are worth today at most 500 000 and more often in the 300K range.

There's no doubt that there are many advantages to owning your home and I believe in diversification of an investment portfolio but to simply say that renting is throwing money away is as I said very simplistic.

Here's a link to an author that sees things this way: http://www.en8848.com.cn/Article/Others ... 59734.html

I can't disagree with you that buying a house is a lot better than simply keeping your money in the bank but for me, I'd much rather get a higher return on my investment and park my money in a safe tax free haven than to have it sitting in Thailand given the current political situation combined with murky property laws and economic instability. I'm quite happy to pay a few thousand Bahts a month and be able to leave when I want without any headaches. And to have a large amount of money under someone else's name, well that's absolutely out of the question. But each person is different and what works for someone may not work for another. I think it's important to look at different points of view and see which one fits best with each person's situation.

At the end of the day, it's not always about money and if a person is happy with the place they bought and are living in it and enjoying it then that can't be a bad thing.

[interested]

I agree with Valrhona, Super Joe's point with regard to the markets in the US and UK are from what I have researched more or less correct. The problem is that this is not the US or UK.

I suppose the point I am trying to make is that from an investment point of view I would personally invest in a property in the US (where at the moment there are some real bargains to be had) or the UK rather than Thailand.

I think that to a certain degree Thailand is a victim of its own success, too much too soon. It has been overdeveloped. You only have to look at some of the property for sale sites, a large percentage of the properties are advertised as being reduced. Good luck to anyone who can 'get out' in the present climate without a loss, however I think they are few and far between.

I really do believe that anyone thinking about living here permanently should have a good look around and find an area that you feel comfortable in, then rent in that area for a minimum of 6 months before committing to purchasing a property. I would also advise against buying 'into' a new project, I personally think that buying on an established development where all (hopefully) the problems would have been 'ironed out' is a far better option.

These are just my personal views.

[JAJA]

It comes down to position, the type of property and when you buy in the cycle as to what your return on investment will be. At a macro level HH has and is changing. It is becoming more sophisticated, and is supporting an increased population of both farangs and Thais. The upgraded freeway from Bangkok has made a huge difference. The development of new golf courses has opened up a whole new market. Over time the growth of HH will ensure a positive return.

At present HH and other parts of Thailand are feeling the effects of a lack of available credit in the banking system. Yes the market at the moment is weak as it is in most other places, but if you have the cash why not take advantage of the market?

Times will change. Expect buyers from China starting to emerge. HH is a unique paradise. If you are happy with property and it is intended as your home, why not take the plunge?

But like anything, do your homework first. If you buy a shit box in the boon docks the chances are that when you go to sell it potential buyers will view it as a shit box in the boon docks and vica versa.

[bigideas]

Hi, I'm new to this forum and I agree with many things that Ja Ja has said. Most importantly, that the Chinese will buy up even more of Thailand in the future and that HH will be second on their list after Bangkok. However, if HH is any kind of investment in comparison to the European or Japanese property markets have been in the past, it is a long term investment. The Europeans and Americans have already been frightend-off (perhaps by Chinese beaurocrats) and in perhaps 10 years from now, the Chinese equivalents of your Costa Del Sol Brits will make their mark... that is if they get here before the Russians! I agree that you should never spend more than you are willing to walk away from, and that if you want to invest your extra money safely, choose the better regulated markets. An apartment near a University in Europe will give you a better return than a sporadically rented villa in Hua Hin.

[Spitfire]

Regarding the Chinese, you even walk down a street in somewhere like korat/Khon kaen on a Chinese holiday and everywhere is closed. They own so much of Thailand and the Thais get worried about us.

The Thais seem to put everything in the bank against further loans. It's the banks that own everything here.

Edit: Typos

[PeteC]

Regarding the Chinese, you even walk down a street in somewhere like korat/Khon kaen on a Chinese holiday and everywhere is closed. They own so much of Thailand and the Thais get worried about us.

The Thais seem to put everything in the bank against further loans. It's the banks that own everything here.

Edit: Typos

Those are the native Chinese though SF, whose families have been here for a century or two and are Thai citizens.

The current day mainland Chinese who have money I don't think are too interested in living here if/when they get the guts to break away from China. They want to go Australia, Canada, the USA etc. The people that I know are still scared about many things, mainly because the money they have socked away in foreign accounts was never declared as income for tax purposes in China. It's all offshore proceeds diverted into foreign accounts one way or the other.

Many, many of these nouveau rich guys are undecided if they really want to abandon China or not, but they have some of their nest egg offshore in the event things become intolerable.

As BI says, they may invest here in the future and/or buy a vacation home, but I don't think many will live here full time, too close to China. When they decide to go, they'll go far away IMO. Pete

[Spitfire]

That's true Pete, but they still see themselves as chinese, not anything else.

Have you every met a so-called "Thai-chinese" woman that will marry a Thai man?

Never!

Just an observation from this neck of the woods where I am, might be different elsewhere but I' doubt it.

[PeteC]

That's true Pete, but they still see themselves as chinese, not anything else.

Have you every met a so-called "Thai-chinese" woman that will marry a Thai man?

Never!

Just an observation from this neck of the woods where I am, might be different elsewhere but I' doubt it.

You're right about that. I know two old Chinese families here whose ancestors came from Hainan in the 1800's. Husbands and wives who I know in their 50's now and that tradition was in place for them. Their kids however are now marrying/dating Koreans, Thai's and whoever they like. Koreans because two daughters went to university there. Times are a'changin I guess. Pete