News Forum - Thailand real estate market saturated with unsold properties, may breach 1 trillion baht

[Thaiger]

Developers of residential properties in Thailand should exercise caution when announcing new properties this year, as their collective plans represent the largest amount of new properties in more than a decade, warns Asia Plus Securities. Meanwhile, unsold properties present a high level of risk and might exceed a total value of 1 trillion baht. The word of caution comes as developers are eager to finish projects that have been on hold since the pandemic, leading to a bottleneck in the market, followed by a subsequent outpouring of “new” projects this year. One such project is SC Asset’s The Villa — […]

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[DoUKnowWhoIAm]

2 minutes ago, Thaiger said:

unsold properties present a high level of risk and might exceed a total value of 1 trillion baht.

Is the bubble finally gonna burst?

[butterfly]

Thais use real estate like a savings account, don't care if empty or not having a decent yield

all they use it for is "safety" when things get tough,

otherwise they only invest in Gold, currencies, and now cryptos

[Soidog]

Reducing prices to what the market will accept could be one way to get things moving. I’ve seen houses stand empty for 10 years or more because the owner wanted 18,000 baht a month rent and the highest offered was only 15,000. So rather than make 1.8m in rental over 10 years, they held out trying to get 2.16m and ended up getting nothing. Beyond words!!  I’ve seen plots of land stand idle for years and when I asked why, I was told the owner wants 5m and the most anyone offered was 3m. Well maybe the land is only worth 3m. Madness and no concept of the idea that something is only worth what someone is prepared to pay for it. 

[riclag]

45 minutes ago, butterfly said:

Thais use real estate like a savings account, don't care if empty or not having a decent yield

all they use it for is "safety" when things get tough,

otherwise they only invest in Gold, currencies, and now cryptos

Spot on! The young lady of the house said some not all have so much cash that they do exactly as you mentioned!

I’ve seen new completed construction sit for years and scratch my head 555

[Cathat]

There was a huge oversupply of property,condos in particular before the pandemic started anyway.

The country is not overpopulated and there is plenty of space.

Only good quality property in very desirable locations can comand a premium.

sooner or later people will have to accept reality and a severe market adjustment will occur.

It's just supply and demand at work.

 

[longwood50]

I agree with the previous posts.  The mindset of the Thai people including the Thai banks is puzzling.  Have had 4 homes in my village foreclosed and to into disrepair over the past 10 years.  Instead of lowering the price and putting the money back to work, they hold on to the properties asking prices that are equal to what homes in good shape with full furnishings are selling for in the same village.  Instead, the properties get so run down, the banks send in repair crews adding even more expense. 

I worked for major banks in the USA.  I can tell you their mindset is to get out of repossessed properties as soon as possible to limit the carrying cost and put the money back to work.  Owners here looking to sell are equally into holding on to property not carrying about the carrying costs, or the loss of income that could be realized if they got their money out of the property.  

[joseph]

I had my house built in 1998 for 1.8 million baht. The exchange rate was 20 baht to the dollar. 9 months later the exchange was 64 baht to the dollar. Paid my house off. Many others were abandoned or left unsold. I tried to buy additional houses but the price for a comparable house without aircon was 2.5 million. They tried to raise the price while dozens of houses sat empty. Many fell into such disrepair they could not be sold, others became "haunted" and unsaleable.     

[Rookiescot]

Was it not only a couple of months ago we had Thai real estate developers telling us the market was booming and was set to sky rocket?

[palooka]

Dabbling in Real Estate in Thailand? Throw away any book on real estate?

Have a frontal lobe lobotomy and an electrical stimulated reset in thought patterns and you MAY understand the thought processes of valuations in Thailand. Stuff for nightmares.

[EdwardV]

Investing in Thai real estate is a long term hazard at best. With a aging/decreasing population base, and an already oversupply, it's a losing proposition to all but the most savvy. There are better places to risk your money. 

[Marc26]

My wife desperately wants to buy a house/townhome where her Mom/family lives, Samut Prakan

 

We've been together for 18 years but we don't live in Thailand, my wife does spend a lot of time there

 

So if it were a proper market, I'd have no qualms buying a place

 

But she is obsessed with doing so..................

And it 100% has to do with her wanting to show she has a house she owns, nothing to do with our actual living situation

 

But I put my foot down, explained to her we can't make money and stand to lose

So we agreed I'd give her a million and she'd  put another million towards a townhouse

 

I am prepared to build a nice home in the village(6mil+) when the time comes, but I am not throwing money out the window

[butterfly]

Thais have this idea that land prices will increase forever, since that's what happened over the last 40 years

they have no concept of economic cycle, it's always someone else fault, so they wait it out

since they don't have modern economic brains, the concept of time and the concept of value of money is completely "foreigner" to them

hence why they prefer to wait 25 years to sell at the same price, rather than take a small loss immediately and invest the money else where

[BIGGLES]

Far to many properties of all kinds over priced and of poor build quality. Yes they look flashy, but get into them and the rubbish build quality is soon apparent.  As for rentals, the prices are still too high given the economic climate. Anything, is absolutely only worth what someone is prepared to pay. In my view, dealing with real estate agents is a fantastic way to overpay for a rental property. At this moment in time, I believe you can find good two bedroomed condos, or other property for 10,000 baht or less per month. For this kind of money I would want extras ( such as electric, TV, Internet, water included). Strike hard deals, shy kids get nothing. 

[BIGGLES]

When someone is on the bones of their arse, money talks!

[Wanderer]

7 hours ago, DoUKnowWhoIAm said:

Is the bubble finally gonna burst?

Well it's been forecast for over two decades now. Oversupply, prices must crash, but there's still empty properties from 1997. Even a stopped clock is right twice a day so who knows. 

[joseph]

 

#1. Be your own contractor. It will be difficult at times and you will hear "this is Thailand". I sub-contracted the local lumber yard foreman, educated him on bonus and made bi-weekly inspections. On a few occasions I catered a good lunch. 

#2. Put the house in your children's name. Strange how this will enrage your mother in law.    

[Thaidup]

54 minutes ago, joseph said:

#2. Put the house in your children's name. Strange how this will enrage your mother in law.

My wifey convinced her brother to do the same with some land he bought off his mother inlaw, she got ripe when she found out it wasn't in her daughters name.

[Thaidup]

1 hour ago, Wanderer said:

Well it's been forecast for over two decades now. Oversupply, prices must crash, but there's still empty properties from 1997. Even a stopped clock is right twice a day so who knows. 

 

9 hours ago, DoUKnowWhoIAm said:

Is the bubble finally gonna burst?

The one differing factor in Thai property is the no foreign ownership policy. Does it help? May have kept the prices lower than they could be now? Is it a bubble burst or dose it simply depend on who will sell? I can remember 2 years ago that the Australian realestate "experts" warning of the same thing and 2 years later the market is up over 20%

[TheDirtyDurian]

3 hours ago, Marc26 said:

My wife desperately wants to buy a house/townhome where her Mom/family lives, Samut Prakan

We've been together for 18 years but we don't live in Thailand, my wife does spend a lot of time there

So if it were a proper market, I'd have no qualms buying a place

But she is obsessed with doing so..................

And it 100% has to do with her wanting to show she has a house she owns, nothing to do with our actual living situation

But I put my foot down, explained to her we can't make money and stand to lose

So we agreed I'd give her a million and she'd  put another million towards a townhouse

I am prepared to build a nice home in the village(6mil+) when the time comes, but I am not throwing money out the window

Just buy some second hand townhouse for 1.5m. Not that much money in the big scheme of things. Make it nice inside and you'll never have to pay for a hotel in Bangkok for the rest of your life. If she spends a lot of time in LOS maybe she wants her own place. I wouldn't want to be staying with family whenever I visited. Also handy for Soyouwannaboomboom whenever you fly in. 

It's your life and you know what you want but the McMansion in the village is a far worse investment. Of course, if you intend to retire and die there it doesn't matter, but absolutely zero chance of ever selling it on. 

[Marc26]

14 minutes ago, TheDirtyDurian said:

Just buy some second hand townhouse for 1.5m. Not that much money in the big scheme of things. Make it nice inside and you'll never have to pay for a hotel in Bangkok for the rest of your life. If she spends a lot of time in LOS maybe she wants her own place. I wouldn't want to be staying with family whenever I visited. Also handy for Soyouwannaboomboom whenever you fly in. 

It's your life and you know what you want but the McMansion in the village is a far worse investment. Of course, if you intend to retire and die there it doesn't matter, but absolutely zero chance of ever selling it on. 

That is the plan..............and possibly a new townhouse for 2mil

Her Mom will live there when not visiting us in Canada(she may start to stay with us longer)

Plus my stepson and our niece can live there if they end up working in Bangkok

 

But we were talking in the 4-5mil range and I just wasn't going to put that kind of money into that area

 

So it will be used and if we sell it in 6-7 years for whatever we get, I will lob that money into the village house project

 

Oh and I am a total priss 5555...........I will be staying in hotels when I go.

I absolutely love a nice 5 star hotel in Bangkok with lush pool

[Marc26]

By the way, we looked at a townhouse 6 years ago and it was 4mil

 

And the townhouses we are looking at now for 2mil seem as nice or nicer!

[Thaidup]

19 minutes ago, TheDirtyDurian said:

It's your life and you know what you want but the McMansion in the village is a far worse investment. Of course, if you intend to retire and die there it doesn't matter, but absolutely zero chance of ever selling it on. 

 That is the best statement of fact, also that big mcmansion may lead you to feel a little embarrassed about how big it is compared to all the local houses, it is very dehumbleing.

[Marc26]

14 minutes ago, Thaidup said:

 That is the best statement of fact, also that big mcmansion may lead you to feel a little embarrassed about how big it is compared to all the local houses, it is very dehumbleing.

I agree 1000%

You see these guys banging on about the West and people showing off

They then go build a house 4x the size of any other house in their village

 

 

Any "millions" I spend above more than the average home would be on comforts, fittings and not size

I grew up in the projects and lived in downtown apartments my whole life, I don't need a big home

 

But my wife's village is pretty affluent(she is not affluent family!)

So there are many nice local homes, so nothing we build would be out of place

[TheDirtyDurian]

54 minutes ago, Marc26 said:

By the way, we looked at a townhouse 6 years ago and it was 4mil

And the townhouses we are looking at now for 2mil seem as nice or nicer!

As others have said, the Thai property market is a strange one. We used to live in Nonthaburi about ten years ago. Prices for second hand in the area we were have hardly moved in that time, but new build just goes up and up. 

Personally, I'd never buy new in Thailand. Wait five years to see the condition it's in then, have the walls started cracking and stuff like that. If the structure is okay after five years you're probably okay. 

Even better, buy a foreclosed property off the bank at discount. Banks are happy to get rid at below market rates because they've already made cash from the previous owner.