Most expats have thought about buying a condo in Thailand at one time or another.
After all, it's one of the few things that can make one feel truly at home in a country with fairly strict laws on land and property ownership for foreign nationals.
Foreign nationals are permitted to buy a condo (freehold) without restriction, but only in a building where more than 51% of the total number of units are Thai owned, otherwise foreign nationals are restricted to a leasehold condo.
Moreover, many of us come from countries where ownership is the ultimate goal, and renting is seen as throwing money down the drain.
Indeed, buying a condo seems like the logical thing to do, especially if you are staying long term or visiting the same province three times a year and splashing out on hotels.
But only fools rush in, and I'd advise caution – because there's a bucket load of things you need to consider before signing on the dotted line for your slice of Thai pie.
Before we get started, it's worth me noting who this post isn't for.
This post isn't for anyone who has so much cash that throwing down 5-10 MB+ for a condo is a mere drip in their champagne glass.
If you don't give a monkey's bottom whether you see a return on your money, whether you're being blinded by marketing ploys, or whether unqualified builders built your condo, stop reading now. You're going to buy a condo regardless of my advice, and probably a speedboat, too.
This post is for those who have a modest amount of money, with the vision of having a future here, or at the very least a holiday home.
It's also for those who might be considering a condo as an investment.
Now that we're clear, let's start!
Contents
1. How Big is the Rabbit Hutch?
No one wants to live in a rabbit hutch. Image credit: nydailynews
It's no secret in the Thai property industry that a condo block close to public transport links, the beach or local nightlife tends to have smaller units at an inflated price.
People pay over the odds for convenience and often end up making sacrifices that later down the line they usually regret.
Just a few weeks ago a friend and I went to see a condo in Ekkamai, Bangkok. The said condo was 2-bedroom, approximately 60 sq. m., 35,000 Baht a month.
During the viewing, the landlord showing us around mentioned she had other condos, one of which was nearer a station (On Nut station). She explained that it was 41 sq. m, two bedrooms, for 30,000 Baht a month.
We'd already turned our noses up at the size of the one we were viewing, but 41 square meters! How do you fit two bedrooms in that?
The lady went on to explain the market and how developers were increasingly making condos near stations smaller to maximize profits and squeeze higher prices out of buyers/renters.
Land in premium locations is scarce and expensive, which means condo buildings are getting taller and the number of condos in a block is increasing to maximize space.
But here's the crazy thing: The condo we were viewing was only 6 or 7 minutes walk from the station.
So, just by making the sacrifice of having to walk an extra few minutes to the station, for not even £100 more a month, we could have 21 sq. m. more space.
If we were buyers, the difference could have been as much as 1.5 MB.
2. Would You Pay This Much Back Home?
Here's a simple technique to find a great condo in a suitable location.
Wherever it is you want to buy, start your search from the most convenient or attractive part of the area, be that the station, the beach, the shopping mall, wherever.
Gradually work your way backwards noting prices, until you get to a point where you say, “Hey, that's too far to walk”, or, “I can't be doing with that motorbike taxi ride every day”.
I know you're excited about living in Thailand or owning a holiday home, but as we all know, Thailand has a way of blinding us to certain realities.
Compare the equivalent to your home country.
For the UK I usually add 2/3 to the price. So if it costs 3 million Baht it would be about 9 million back home. Would you shed out the same money back home for an unfurnished apartment, that small?
Make sure you do the math. What often seems cheap in Thailand isn't all that cheap when you make a market comparison. Compare how much you are paying per sq.mt with what you'd pay back home.
Factor in the relative price. If you are paying 5 million Baht for a condo here, the same would be at least 10-15 million Baht in a major city in the UK or US.
Also consider the long-term ramifications:
- Will you and your partner be getting under each other's feet all the time in such a small place?
- It's big enough now but what if you decide to have a kid? Perhaps you have a baby now. They don't stay babies forever. Will this be enough space?
- If you're a singleton, is it big enough to rent a spare room or have people over to stay while they're on holiday?
- It looks spacious on the plans but how much stuff have you got and how much are you likely to accumulate while living here?
- Won't you want a bigger balcony to sit out on?
- Do you really want to look out at that main road every day?
- Having a gym upstairs is great, but will those 10kg dumbbells and two bikes really suffice?
3. Are You Buying a Condo Built by Mr O' Rilley?
“I thought you said a wall Mr Fawlty?”
If you're a Fawlty Towers fan then you'll be familiar with the building work of the jolly Irish builder in the picture above, Mr O' Riley.
Humour aside, the build quality of condos in Thailand isn't always up to scratch.
Even those developer brands touting their work as “European standard” have a lot to answer for, particularly when you take a walk past the site and see the dubious hammer and chisel techniques on display.
I remember a friend visiting from the UK sometime ago. A roofer and plasterer by trade, he was gobsmacked by what he observed on the building site opposite his hotel.
At times he'd sit by the pool muttering, “What the?” “What is he doing?” “No, no, no, you can't do that”!
I don't blame the builders, though. In fact, I admire them.
The majority have no formal building education to speak of, the tools they are given to do the job are inadequate, and their lives are treated with such contempt that when it comes to safety standards and wages it's a wonder they manage to make it from one job to the next.
But let's get to the ethics of the Thai construction industry later.
Some, not all, condos experience build problems in the first few years of operation. If you're lucky you'll escape with the simple stuff:
- The low quality materials used for the facia of the building will fade under the glare of the sun.
- The cheap tiles used to lay the flooring in the hallways and your apartment will crack on poorly laid floors.
- Walls will crack due to poor plastering (can be due to movement and is not always something that can be helped).
- Fittings will wear quickly or break.
- Cheap paint will wear fast.
- Roof/window leaking issues during rainy season, as a result or poor workmanship or cheap materials.
If you're unlucky there could be more serious issues with subsidence.
An apartment project in Pathum Thani subsides.
Don't get me wrong, nearly all condo buildings stand the test of time (except the one above, of course) in that they don't fall down.
However, cheaply decorated condos will require on-going maintenance work that you may not have expected to carry out so early on.
Of course the advantage of renting is that this cost is picked up by the owner of the condo block or individual unit you are renting .
Don't get me wrong, not all condos are built will cheap materials. But have you researched the materials being used to build the condo you want to buy?
The fact is, if you're planning on paying 2.5MB for a 33 sq. m condo built with paper-thin walls, the cheapest floor tiles from HomePro, and a single kitchen hob, then you're getting shafted.
Cheap fittings don't last and break. They need replacing. It's not just the expense, either. It's annoying!
4. Are You Happy Paying an Inflated Market Rate?
Every real-estate agent in Thailand will be all over this post telling me that the market is booming and 6% yields on rental properties are common.
And you know what, they're right – if, that is, you are Thai and bought off plan with a heads-up from the developer.
Here's a quote from the NomadCapitalist who knows a fair thing or two about property markets and their “legal scams” in Asia:
Here’s one way Thais are playing the real estate market in Bangkok. Connected Thais will find “off-plan” condo projects in areas along the Skytrain line, such as Sukhumvit or Sathorn in Bangkok. Developers require ten percent of the condo price down at signing, which can be paid in installments over one to two years. That means a 500-square-foot, $200,000 condo can essentially be optioned for about $1,000 a month.
The plan in this scenario is to do an off-the-books sale of the purchase contrast to a longer-term investor (or sucker) once construction gets underway. Considering condo prices increase as much as few percentage points per quarter once it goes “on plan”, Thai investors can as much as double their out-of-pocket investment before they flip the property. And because it was off the books, they avoid taxes or much scrutiny.
Such opportunities are not as open to westerners. You have to be connected, and Thailand is very proud of the fact that it was never colonized by any European power. That means no foreigner is going to penetrate their inner circle.
(Quote source: Nomad Capitalist)
Ask yourself this simple question: why are there so many condos sitting empty in Thailand, particularly in Bangkok?
The owners would rather have them remain empty than drop the rental rate. Seems strange.
I will tell you:
Because, considering the points made above, these twilight investors are prepared to take a hit on a few units for the sake of keeping the market artificially inflated. The inflated prices enable their investments in off-plan condo blocks that get flipped off the books at double-bubble.
5. Is It Really a Good Investment?
I nearly did it once.
Five years ago, a friend and I slapped down a deposit on a condo in Koh Samui. It was to be a holiday home-cum-rental opportunity.
We justified our spontaneous purchase on the continual growth of the island's economy, and the fact that friends could rent it when they came out for a holiday.
Sadly my friend went home after his holiday, took off the rose-coloured glasses and figured that the cash would be safer in an ISA.
He was probably right.
In some ways I wish we'd gone ahead, not least because I'd have a cool little escape in Samui and because market prices have increased since then.
Looking back, I think we would have made our money back eventually by renting it out, especially with the rise of AirBnB and online rental platforms.
However, the reality is that we probably wouldn't have been able to resell it.
The sheer abundance of new builds means the rental market is highly competitive and you need to offer up a cheap deal to make sure your gaff is full all year round.
Not to mention that I can book a decent hotel on a deal from Agoda or Hotel.com for 1, 500 Baht a night if I do want to go there for a holiday, hassle free.
Consider this scenario…
When you buy a property in the UK, even if the market crashes post buy, if you hold on for 10 years, you'll still end up getting more than you paid for it, and in most cases make a profit.
Moreover, you will be able to rent the property and make a good yield, regardless of resale market conditions. The crash and climb of the 90s and of the mid 2000s has proven this to be true.
This is not the case for condos in Thailand.
As mentioned above, the money is in knowing the man who knows the man, in investing off-plan before the project is announced and flipping off the books.
Buying a condo to rent out for profit is risky at best, unless of course you have a contract with a multinational company that wants to rent your place for staff, or a similar scenario.
And here's why:
Condos for rent are two a penny. The sheer abundance of choice makes it a renter's market.
While your condo might be a popular rent when it's brand new, when ten new blocks go up in the same square mile over the next few years, you'll have to reduce your rental price to compete with the fancy new kids on the block.
Once your air-con unit starts looking shabby and building facia has faded, your condo will be way down on the list of units that would-be renters favour.
Of course, there are exceptions.
For example, buy a 38 million Baht penthouse on Soi Ruamrudee in Bangkok and you might get 250k+ a month for as long as the big banks and embassies are still in the area – even when the block is a little dated.
But I don't have that sort of cash to shed out, do you?
On an average condo it is far more risky.
Let's say I buy a 3 million Baht 1-bedroom condo, fairly near a BTS station in Bangkok. I rent it out for 20k a month and it's always occupied.
It would take me 12.5 years to make my money back, let alone a profit.
Now, tell me, what are the chances of always having a tenant?
And when those 12.5 years are up, what are the chances of being able to sell the condo for more than I paid for it?
And if I did get my 3 million Baht back, the value of that money will have depreciated anyway.
Oh, and you have to pick up all the maintenance fees, too.
Some would argue that I'm wrong.
If I continued renting out the condo for another 12.5 years, even at a reduced price and low occupancy, I could make around 2 million Baht over 25 years, and still own the condo at the end of the term.
That's around £45,000 at the current exchange rate. Surely that's not bad, for one investment. Moreover, even if I sold the condo after 12.5 years for 2 million Baht, that's still a good return.
What do you think?
6. Are You Being Blinded by Furnishings You Won't Get?
The showroom condo might look like this, but you'll probably need another 1MB+ for this level of furnishing.
I'll never forget the time I accompanied a condo-buying friend to a showroom in Tong Lor, Bangkok.
We were given free smoothies and chocolates, just for looking around.
It was five-star treatment that made you feel like you'd won the lottery, and that “buying one of these condos is the missing piece of your life”.
We were showed around a beautifully decorated condo. It was small but felt cosy and looked really well-finished.
Then it struck me to ask the sales lady, “So which type of unit comes decorated like this”.
“None sir. This is just for show”.
I'm not kidding. From the kitchen units down to the silver plug sockets, you didn't get any of this decor for your 6 MB.
I finished my smoothie, drinking down the realization that the entire setup was an oasis.
They'd used a European fitted kitchen and other high-end furnishings that would cost the price of the condo itself to buy and fit (properly) in Thailand.
Without this stuff, it was a mere hamster cage, without the pretty running wheel and drinking bowl.
So, before you put that deposit down, make sure you fully understand what, if any, furniture and fittings you will be getting. And at what price the top-end stuff in the show home will set you back post-purchase.
7. Is Your Deposit Refundable?
Question: Name a way to make money out of building a condo block other than selling the units?
Answer: Get truckloads of people to be so overwhelmed at the prospect of a free iPad and “special price today only” that they leave deposits with your commission-hungry sales staff.
Believe or not, condo developers in Thailand make millions of Baht every year from non-refundable deposits.
First they lure you in with as much free water as you can drink and a few snacks and smiles from some extremely attractive “pretties” (before the feminists hang me for using that word, it's not something I made up. This is a real term used in Thailand for women who stand at sales events looking pretty).
Next they show you the amazing decor you won't be getting. And lastly, they tell you that the “today only” price is yours for a small 20,000 Baht deposit – if you “just sign here, sir”.
Do yourself a favour and make sure the deposit is refundable within 14 days (or other negotiated period). Get this in writing. Or, if you can afford to throw away 20k, go ahead and enjoy another free bottle of water.
8. Is Your Dream Condo Part of a Condotel?
A condo hotel, also known as a hotel-condo or a Contel, is a building, which is legally a condominium but which is operated as a hotel, offering short term rentals, and which maintains a Front Desk.
This little detail often comes as a post-build shock to those buying in the early stages of construction. It should be stipulated in the contract but is easily missed or conveniently left out.
So what's the problem?
Well, unless you fancy herds of tourists around the pool, coach parties gathering for trips in the lobby, sex tourists shaking the floorboards at all hours and the perpetual feeling of staying in a hotel, I'd enquire as to how many, if any, of the condos in your block are to be set aside as hotel/short rent rooms.
Maybe you aren't bothered about living in a condotel, but it's worth asking about, and you really should be told if units are to be allocated for this purpose.
9. How Do You Feel About the Thai Construction Industry?
Low pay, poor safety standards, lack of equipment = sub-standard building
Thus far, this post has been all about the reddies, the wonga, the Benjamins, the best bang for your buck and how to make sure you don't waste your hard-earned money on a condo that's not right for you.
But what of the workers who build the condos?
What about the unscrupulous developers who cut every possible corner, including worker safety and paying below the minimum wage to unregistered immigrant workers?
It's rife.
I've been observing the building of a massive condo development near my home for the last year.
Every day I see the workers shipped in from their campsite/worker digs in what look like WW2 trucks, stuffed over capacity and the workers forced to endure the black smoke pouring out of the exhaust.
It's a painful sight.
To their credit, these men and women have built an amazing two building complex with very few power tools.
Usually armed with little more than a hammer and chisel, they scale the structure dangerously, day and night, rain come shine, to erect condos they themselves will never be able to afford – not that they'd want to pay such an extortionate amount of money for a tiny space in the middle of the sky.
Thinking about it, knowing what the materials cost and what they get paid, they're probably having a good laugh at us for paying so much!
But seriously…
When you employ the cheapest labour you can get, based solely on the fact that the workers don't have the qualifications to ask for more, or the voice to be treated fairly, and you give them the bare minimum of tools, making it extremely difficult to do the job, it is, in my opinion, slave labour.
As for worker safety, you only need to look at the flip-flop-blessed feet navigating the wooden scaffolding to make a judgement on how much the Thai construction industry values the lives of its workers.
I'm not trying to start some sort of “farang union” here, but I believe in fair.
The workers should be given better training, better tools, more money and be better protected by health and safety standards.
I don't know about you but it makes me feel uncomfortable seeing people treated this way, and a free Samsung Galaxy and a couple of bottles of water won't make me forget these facts.
In Summary
Buying a condo isn't a bad thing. If you know exactly where you want to live in Thailand and have the cash, then why not.
If you're buying with a view to living in it for the next 25 years, then you will likely make good on the investment versus what you would have paid in rent.
It could be difficult to sell, though. Always bear that in mind.
It's a buyer's market and you probably won't make a profit. If you suddenly need to leave Thailand, or want to move area, a quick sale will likely be to an investor at a below market rate.
The key takeaway is to not rush in. Renting is cheap in Thailand, and you're spoilt for choice when it comes to condos. Take your time. Rent a while and live in a few different areas before making a decision.
——
Got a condo-buying experience to share? I'd love to hear about it below in the comments section.
More Tips for a Better Life in Thailand
Send Money to Thailand:
+ Use Wise. It is fast, cheap, and gives you the market exchange rate. Me and the majority of my readers are using it.
Get Good Health Insurance:
+ Start with a quick quote from Cigna. Takes just 2 mins
Improve Your Thai Skills:
+ Learning Thai makes life here easier and more fun. I use Thaipod101. It is free to get started & easy to use.
Last Updated on
emditht says
To cut it short I was lucky enough to live in a strategic area for 5 years without paying any rental but using my capital that in a bank account would have yielded nearly zero interest unless opting for high risk investments. Now I'm struggling in making a decision if to buy again or rent in a quite area along the Chonburi coast. Reading your well thought analysis was very helpful but i believe you missed an important point. Sovereign debts and big banks all over the world are struggling to stay afloat, bubbles are ready to pop... who knows when a financial storm will surprise us and what the destiny of our money sitting in a bank will be.... Let's remember that bail-in regulations are already enforced in many countries around the world and i don't buy the tale of the Deposit Guarantee Schemes working in such a gloomy scenario. Houses, land, cash, gold and bitcoins are alternative safe heavens.
Perhaps a wise real estate investment in first world countries would meet a safer legal environment but considering I live here in Thailand maintenance costs and taxes would be prohibitive for a so far away second home.
Of course the ideal scenario for a real estate investor would be to wait until the condo bubble pops and you promptly step in with cash in your hands, but who knows if and when it'll happen... 5, 10, 15 years?
So my point is it's fine to save your money avoiding expensive rentals and buying a unit in a condo in Thailand only if the answer to the following points is YES
- you like the area and the view very much
- the location is strategic,
- the money going to be invested in a condo is not a conspicuous part of your assets
- your exchange rate is not at toxic levels (for example I'd avoid at all cost converting EUR or GBP into THB right now)
- the condo is quite new and the quality is acceptable,
- the builder is well known and reliable,
- you definitely live in it and don't have plans to rise a big family
- you won't exceed 5 years of ownership so to avoid the final deterioration of the building and get your money back entirely,
- there are quality locals living in it, so in the future not only farangs will be willing to buy your unit but locals too
Mar 12, 2017 at 3:32 pm
Stephen says
Jun 19, 2017 at 7:09 pm
PatrickB says
I purchased an off-plan condo and the transfer is 2-months away. I am trying to decide if I want to complete the sale or sell my contract, if that is even possible.
Aug 16, 2017 at 9:20 pm
Paul says
Dec 25, 2017 at 2:24 pm
Daria says
Feb 16, 2017 at 6:06 pm
Jamie says
I'm Malaysian and would like to buy a new condo in Bangkok which is located 2-3 mins walk from the BTS station.
Appreciate your advice.
Thank you.
Jan 10, 2017 at 1:06 pm
catherine says
Feb 01, 2017 at 1:44 pm
Eric says
Dec 20, 2016 at 2:47 am
Ken says
After frequently visiting Pattaya over 5 years and living near Pattaya for two, I have come to the realization of 80% of what you have mentioned , however the high end Bangkok hi jinks were a surprise but its "yeah , of course" moment though.
The one point I want to mention is that Pattaya isn't the place it used to be, the low tourist numbers reflect this. I visit the big smoke of Patts many times a year and each time the numbers have declined, and as I sit in my Pattaya Tai hotel tonight I'm wondering how all these local people are coping with the heavy loss of numbers, I do not want to bang on too much about what I feel needs to be fixed but I will say the beach is not exactly postcard quality , and like most of the problems implementing simple plans will do wonders, eg how difficult is it to have work parties to go up and down that beach to keep it picturesque ?
.
Ps I realize that the Russian folk have all but gone, and the world has had a financial battering lately and that the real season is Nov-March ( Which I don't believe. The season use to be all year round busy with the Xmas period being unbearably busy)
Also , its cheap as chips to fly to Utapau via KL now,
However, local government and new police chief are implenting new strategies to sort things out , they need too with Laos, Vietnam and Cambodia opening up.
I personally think that Pattaya has unfortunately run its course. But I wish the city and all the locals all the best.
My 2 cents is,
property bubble pop +tourist bubble pop = ?????
Sep 17, 2016 at 11:52 pm
Ken says
Anyway, I can’t argue the fact that Pattaya has changed considerably over the years, as do all cities. It wasn’t the same in 2000 as it was in 1990 when I first went there. And it had changed a bit more by 2010 when I was there last. Still, if I were there today I’m not sure I would think that it has necessarily changed for the worse or that it has “run its course”.
Obviously it’s hard on business owners when tourism is down but the numbers pretty much always recover. If you look at the yearly tourist numbers for Thailand over the past 30 years you will notice that every now and again there is a down year but that those number always quickly recover. And although tourist numbers have supposedly been down in Pattaya in particular this past year I’m pretty sure that those numbers will also recover before long (not that I would necessarily invest there right now). Sure, the types of tourists and their nationalities will change over time but in the long haul the overall numbers should still always increase. And even WAY down the road (after I’m dead and gone) when Thailand’s economy is doing so well that there is no longer an abundant supply of cheap prostitutes, I think that there will still be plenty of tourists in Thailand, and even in Pattaya.
I guess I’m just a bit less pessimistic than most expats when it comes to Pattaya, and Thailand in general. For the past 20-years I have been listening to people saying that “the party is over” in Thailand and that everything is going to hell in a hand basket. With every passing decade people just always think that the previous decade represented the “good old days” and they lament the fact that those days are gone forever. And by the way, those same people have been talking for decades about places like Laos and Vietnam possibly stealing a large percentage of the Thai tourist away but that really hasn’t happened yet.
So things will always change. But as person who embraces change rather than resisting it I always adjust well to new and changing environments. Although, I guess only time will tell what I think of Thailand when I go back.
As for the Beach in Pattaya I’m afraid it’s never really been what I would call post card quality. From what I have heard however I understand that the garbage problem on the beaches is a lot worse than it used to be. Although I would imagine that this is only really a problem in summer time as this is when the currents are most likely to bring all that sea trash ashore. In any case, if I ever get back there I will certainly do my part to help pick up the trash on the beaches.
Sep 19, 2016 at 7:20 pm
Carlos says
Sep 14, 2016 at 8:54 pm
TheThailandLife says
Sep 15, 2016 at 11:48 am
Salty Bugger says
They have finished the building now but have a few rooms still available. Not sure why a place like this in this location wouldn't be sold out.
Any thoughts advice wellcome.
Oct 02, 2016 at 8:42 pm
Gerard says
Sep 10, 2016 at 3:11 pm
Ian says
As a real estate investor who owns condos in Bangkok, I can relate to alot of the points made and to the comments posted. However, I think there is a big cultural difference in the way Westerners and Asians approach property investment. Westerners tend to focus only on returns (rental yield & capital gain) while alot of Asians (especially those from developing economies) think of property as a vehicle for wealth storage for the next generation. This is particularly true with Thais who have a "buy and hold forever" mentality.
What is not mentioned here is the lack of alternative investment options to property. Investing in Thai equities is not really attractive (smallish capital market compared to other bigger regional bourses and not to mention pathetic corporate governance) while there is also a dearth of investment products on offer by the financial institutions here. I think this is really the key driver behind the condo boom as there is alot of pent up investment demand from wealthy Thais (especially wealthy upcountry folks who would like to own a piece of Bangkok). Historically, land has been the asset of choice for Thais to own. With the new Land and Buildings tax, many landowners have been trading in land for condos.
Sep 03, 2016 at 9:44 am
Ken says
What I personally cannot figure out is why condos are so expensive in places like Pattaya - especially when you consider how poorly laid out, decorated, and furnished they are on average when compared to condos in Bangkok. After all, there is such a huge surplus of condos on the market in Pattaya right now that I would think we would be seeing fire sale prices but this does not seem to be the case at all. But then again, as it seems that absolutely nobody in Pattaya actually buys a condo there to live in themselves I guess the owners don’t care how long their properties sit on the market unsold because these units will always still bring in some income in the meantime. And with the growing popularity of services like Airbnb, Pattaya condo owners can reach a much broader pool of potential renters than ever before.
Anyway, as someone who seems to have some knowledge of the Thai real estate market I’m curious what you think it will look like five years from now.
Sep 04, 2016 at 1:11 pm
Ian says
Thank you for your comments on my post.
If you think the vacancy rates are high in Thailand, it's nothing compared to China (which can be explained once again about the unique Asian cultural mindset that is applied to buying property).
As for your comments on Pattaya, I agree. The condo market there is a total dog and I wouldn't touch it with a ten foot pole. For the most part within say the past 5 to 7 years, Pattaya projects have been geared towards the foreign buyer market - namely the Russian and Chinese - and we all know what happened to the Russian Ruble a few years back that resulted in a mass forfeit of deposits on new condos by Russian buyers.
Regarding your comment on the lack of fire sales, they are extremely hard to find and the oversimplified answer has to do with Thai culture and the Thai banking sector. Generally speaking, Thais would rather lose money than to lose face, so no self respecting Thai will want to exit at a steep loss in fear that others will find out about it. Deals like this can be done, but you have to be extremely sensitive in the way you handle such negotiations where the seller is Thai. As for the Thai banking sector, Thai banks enjoy one of the largest lending spreads world wide (lending rate minus savings rate), so this allows them to shore and buffer their balance sheets in the event of any loans (mortgages) turning sour. As you know, there is a weak enforcement culture / rule of law here in Thailand, so it is very time consuming and costly for the banks to chase borrowers (including both property developers and buyers) to make good on payment, so banks will simply take as much upfront as possible (loan origination charges, etc) together with imposing high interest rates on borrowers.
As for the future of the real estate market five years from now, I am still bullish (there is a reason that this country is called 'Teflon Thailand'). Thais are an extremely patriotic posse who are fully invested in their country (the proportion of overseas investment by Thais is still extremely low when compared to how much they invest locally), so there will always be underlying demand from locals. Thus, if you want to play the condo market in Thailand, I'd stay away from markets like Pattaya where demand is largely driven by foreigners.
Sep 05, 2016 at 10:46 am
Ken says
As for Bangkok real estate it might indeed be a good investment right now but I have not really researched the matter much as I don’t have a lot of surplus cash lying around at the moment. And as I mentioned in a previous post, when I retire in 5 years or so I will be buying a condo to live in rather than just purely as an investment property. The reason for this is that I will need to remodel whatever I get to suit my high-end modern tastes and I can only do this if I am the owner. I could probably find some rentals in my price range that I like in Bangkok of course but I don’t really want to live there. You see I’ve spent most of my life living on the coast here in California and so I need to be near a beach somewhere when I retire. Sure, I absolutely LOVED living in Tokyo for 5-years but I was also working at the time and I was going out to nightclubs almost every night of the week as well. As a retiree though with no job to go to everyday I just can’t see living even in Tokyo, much less Bangkok.
If I were to invest in the Thai real estate market however I do agree that Bangkok would probably be a better choice than Pattaya. As far as living in Pattaya is concerned however I have to say that I don’t absolutely hate the place the way nearly everyone else seems to. In fact, I actually enjoyed living there. It wasn’t nearly as nice as living in Phuket was of course but I really liked how close it is to Bangkok. And this was important because I was dating a LOT back then and I liked the fact that girls from Bangkok could easily and cheaply come to visit me on weekends. Although, by the time I retire I might just look too old to have any chance with any of the girls that I would actually want to date, so my proximity to Bangkok might not be as important in the future.
Sep 07, 2016 at 9:08 am
Brian says
Sep 17, 2016 at 3:22 pm
Ian Khoo says
Lumpini Place is a mid-end condo brand by the LPN property development group which focuses on the mass segment condo market. The developer is publically listed on the SET and has a good reputation in this market segment. The developer is also known for providing excellent after sales services (juristic management services) which is not that common since most developers prefer to focus on development (property management is an after thought due to relatively skinny margins). My wife has a unit in a Lumpini Place condo in Bangkok which is being rented out to an expat couple.
As for Udon Thani, your resale market will be limited to locals who live there. There is massive condo oversupply in upcountry markets and I personally would never invest in a condo outside of Bangkok (which has the highest liquidity by far but it's still not easy to resale!).
Sep 17, 2016 at 9:20 pm
Ken says
In any case, I was just wondering why every article I have ever read on buying condos in Thailand is geared towards people buying one for investment purposes or as a vacation property and not to actually live in year round. Doesn’t anyone buy condos to live in anymore? And if not, why? After all, as best as I can figure, it would cost me twice as much to rent a condo for 25 years than to buy one outright. Of course my main reason for wanting to buy is that it would be virtually impossible for me to find a reasonably priced place to rent in Phuket or Pattaya that has the layout and ultra modern interior design that I simply must have in a place (maybe in Bangkok). And even when buying I would have to completely gut and remodel anything I’m likely to find. I have seen some nice modern designs in some upcoming projects but frankly I would never buy into an unfinished property in Thialnd, as I cannot trust that the finished product will look anything like the computer animations, or that it would even get done at all. Also I can get more square footage for my money by buying something in an older building and then remodeling it myself. I just cant see the downside to buying a place to retire in rather than renting but if you can think of some cons to buying for someone in my situation please let me know as retirement is only a few years away.
By the way, thanks for bringing up Faulty Towers. I had almost forgotten about that show but it used to be one of my favorites way back when. Another old favorite of mine from your side of the pond was “Yes, Minister”. Absolutely hilarious.
Apr 17, 2016 at 12:54 pm
TheThailandLife says
Apr 17, 2016 at 3:56 pm
Ken says
As for buying a condo, my situation is that I did not properly plan for my retirement here so now I will have no choice really but to retire in Thailand. And seeing as how I have spent most of my life living near the coast I do not want to change that now, which of course leaves out Bangkok.
My first choice was Phuket but that might prove to be too expensive. My second choice was Pattaya and it has the advantage of being much closer to Bangkok and, lets face it, all the really great women are in Bangkok. When I lived in Pattaya before it was very easy to have Bangkok girls come down and visit me on the weekends. Or I could go up and visit them for our dates. And if things got serious then we could decide to relocate closer to one another. So it’s kind of the best of both worlds in a way. And for some reason I still have a real fondness for Pattaya despite the fact that I quit the bar scene long ago.
You would think that I would want to live in a big city like Bangkok seeing as how the best 5 years of my life were spent in Tokyo, another huge metropolis. But for some reason I just cannot see living there when I have no job to go to everyday and when I’m not going out to clubs every night. Also I just need to be able to take a walk along the beach every evening and watch the sunset.
Anyway, whichever city I choose, I just can’t see spending as much as $75,000 extra over the course of my lifetime to rent versus buying a condo outright. After all, even if I decided to move to another city at some point and had to sell, any loses from the sale would be nothing in comparison to a 75K loss. Unless I am missing something in my calculations that is. And this is why I'm always asking expats about this.
Apr 18, 2016 at 5:47 am
TheThailandLife says
I still love Koh Samui. Phuket is great for a holiday, but Samui still retains more of that island feel, and still has some lovely spots despite heavy tourism. You also have Koh Phangnan across the way which is lovely too, but probably too quiet to live for someone used to the hustle and bustle of the city.
I guess Pattaya is an obvious choice because of it's proximity to the airport; though I'm not really a fan of the Beach Road area, nor the beach - which isn't much of a beach these days. I haven't been to Jomtien though, which I've heard is nicer.
Apr 18, 2016 at 9:35 pm
Ken says
As for Pattaya, I felt pretty much the same way about it as you do the first time I went there. I also resented being stuck there at the time. You see I just wanted to get to Phuket as soon as possible but my traveling companions wanted to stay in Pattaya and they out voted me. Over the years though the place has really grown on me. Sure it doesn’t have much of a beach to speak of but I still love taking strolls along beach road every evening and watching the sunset. And for swimming and sunbathing in the afternoons Jomtien is not such a terrible beach. Also there are the small islands right off the coast of Pattaya and its always easy to get a boat to take you out there. I even know one guy who somehow negotiated an all day rate for a jet ski and him and his girlfriend used it to get to the islands and back. And of course Koh Samet is only about an hour away by car and it has some really nice beaches.
As I said before though the best thing about Pattaya is its proximity to Bangkok and Bangkok women. Not only is there a much larger selection of attractive women in Bangkok but they are also more educated and have higher average IQ’s than pretty much anywhere else in the Kingdom. In some other parts of the country however average IQ’s can actually be as low as in the 80’s. And I guess if one is just into having a lot of random sex this would not be a problem but for a long term relationship to work out you really need to at least be in the same intellectual ball park as your partner.
I did love living in Phuket quite a bit but condos are just too expensive in Patong and Kata and I have no desire to live in Phuket Town or even Rawai where I lived before. Also I have always been in a relationship whenever I’ve been in Phuket so I know nothing about the dating scene there. In fact I have never even sat down for a drink at a bar in Phuket. And now that I think about it, I also don’t recall coming across any women there who I found to be stunninly attractive. Or at least none that could match up to my girlfriend at the time.
The bottom line is, if I were married or in a long term relationship and I had a few more bucks socked away, Phuket would be a no-brainer (or perhaps Koh Samui, although I’ve never been there). But being single again I need to be closer to Bangkok. Of course I will spend a month or so back in country before I make my final decision on which city I want to live in.
Apr 19, 2016 at 6:15 am
Bob says
Go and check out Ao Nang in Krabi. International airport, Tesco, Makro just opened. Lot of restaurants.
Downside is islam, so do not stay near the mosques and avoid the loudspeakers when renting.
May 13, 2016 at 1:26 pm
Ken says
I had said that it would cost me twice as much to rent versus buying over a 30-year period but this not necessarily true. The thing is I stupidly forgot to consider interest on my savings and so I was just assuming that I would use up all my savings on rent over time. But if I have $100,000 in savings and I can somehow earn 6% on it then I could actually pay all my rent with the interest alone and I would never even have to touch the principal.
Of course savings account interest rates have not been 6% since 1969 when I got my first bank account as a kid. And today you are lucky to get 1% and even CD’s aren’t much better. So to get 6% would require putting your money into a much more speculative type of investment vehicle. Still it could be done. So at the end of 30 years, even though I would not own a condo, I could still have100K in the bank.
Unfortunately however since I am so picky about my surroundings I will still have to by a condo so that I can remodel it to my exact specifications. And hopefully a $100K condo will be worth a lot more than 100K in 30 years. Of course, as over inflated as condo prices seem to be in the coastal areas of Thailand right now this is far from a certainty.
Jul 31, 2016 at 1:59 pm
Karsten says
Jan 28, 2016 at 2:55 pm
philippe says
Last point is that rich get richer and poor get poorer so depending on the market segment of the condo , cheap VS hiso , the price may be correlated to this?
Dec 10, 2016 at 2:57 am