Thailand Property 2018




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ORIGINAL POST

POSTED BY vichui (8 mths ago)
Hong Kong Tatler rated Thailand to be the 1st out of the 5th of "Top Destinations For A Second Property In 2018"

What do you guys feel about buying a property in Bangkok?

Happy New Year

COMMENTS

vichui (8 mths ago)
Anyone brought Thailand property in a recent year and don't mind to share your experience? Thanks

vichui (8 mths ago)
With a cost of hkd 1M, a one bedroom furnished suite in Bangkok seems to be a good investment opportunity.

vichui (7 mths ago)
With so many Thailand advertisements a day in different media, can anyone who you share your experiences; good or bad?

Baap (7 mths ago)
There is A LOT being built, as you can see from the offers. I wonder what the vacancy rate is? If it's for yourself, go ahead, but if you are planning to rent it out, I doubt it will be a good investment.

And construction is likely so crap that in 10 years the property will look ancient, and a lot of other properties nearby will look much newer/better.

vichui (7 mths ago)
Thanks BAAP for the advice.

I am thinking to buy it as an investment. Anyone can share your experience in investing Thai properties?

Thanks you all.....

Baap (7 mths ago)
Buying properties is always risky. Why don't you buy a REIT, so you don't need to deal with tenants, agents, lawyers, don't need to pay taxes on the purchase and sale, etc.?

If you compare the price of Link Reit and the change in property prices (centacity index) they fit almost 100%. Which means that you would have been better off buying Link Reit shares (if you ignore the fact that you can make a mortgage).

There are REITs that give over 6% return in the UK and Canada, and 5% in HK and Singapore. I don't know if there are REITs in Thailand, but it's certainly something you could look at.

vichui (7 mths ago)
Very good alternative. Thank !

If this is a best option, how could property price keep coming up ?

Nice weekend ahead.

OffThePeak (7 mths ago)
I think Chiangmai is a better Buy.
No flooding, interesting food and culture wise - and not so hot.

I really like my visits there
You can get a nice 2BR for the price of a 1BR in Bangkok

vichui (5 mths ago)
How is the capital appreciation there?

mjc23 (5 mths ago)
Hi Vichui,

I agree with BAAP, there is a lot of building going on and growth in rental yields and capital appreciation have slowed down. Exit strategy might also be an issue with an oversupply.

Other issues with Thailand as a country include an unstable currency and a political uncertainty. Whilst a general election has been set for November this year, elections have been set and delayed since 2015. Regarding the Baht, as effective interest rates rise in the West, we are seeing the similar circumstances to 1997 and the likelihood of another crisis increases.

Have you thought about other countries to invest in?

Thomasmalthus (5 mths ago)
Have two mates who bought properties in Thailand. One in Phuket, one in Hua Hin.

Their comments:

- massive oversupply
- occupancy rates of 30% considered very good (which is not very good at all)
- if you decide to let to a long term the rent will be very low - and the generally the amount to repair the place after the tenant leaves will exceed the rental income
- all sorts of accounting headaches
- if you leave the place empty you feel as if you need to go to Thailand every vacation to justify the purchase
- difficult to sell without losing money (glut)

The Verdict : a dream turned into a nightmare. A total disaster

vichui (5 mths ago)
Any low cost with high capital appreciation opportunity elsewhere? Thanks

OffThePeak (5 mths ago)
I BOUGHT IN MAKATI, PH about three years ago.
I received some minor derision from one or two here a few for doing so.
One of the units is completed, the second will be completed this year, and the third in two more years
Notional returns so far based on estimated valuations:
Unit 1/ + 48%
Unit 2/ + 35%
Unit 3/ + 75%
===
Those are higher returns than I could have made in HK.
As "proof of concept", I may sell #1 later this year, with a target profit of 50%.
I would like to do that after I move into #2, in Q4 this year.

mjc23 (5 mths ago)
What are your thoughts on UK property?

For the same price as the suite in Bangkok, you could buy a 1 Bed apartment in Birmingham. The mortgage, tenants and management would all be taken care of and void periods are covered by rental assurance. (Lettings agency has a rate of 96% occupancy)

The JLL Residential 2017 report projects capital growth at 22% and rental yield growth at 18% by 2021. These units can also be secured with no lump sum.

Cities such as Birmingham and Manchester are seeing huge investments and regeneration. Many companies are choosing to open/move offices in these cities rather than expanding in London.

The HS2 Rail will also connect Birmingham to London in only 49 minutes, meaning it would be possible to work in London but live in Birmingham for half the rent.


Even with Brexit the UK is still a stable market and if anything, the weak pound actually helps foreign investors.

OffThePeak (5 mths ago)
A SLOWDOWN is being reported in the UK:

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ihEg2vsMigT0/v2/800x-1.png

London House Prices Drop at the Fastest Pace Since 2009
March 12, 2018

Acadata report shows values fell 2.6% in year through January
Sustained weakness in the capital drags down national growth

> https://www.bloomberg.com/news/articles/2018-03-12/london-house-prices-are-dropping-at-the-fastest-pace-since-2009

Interesting idea to Live in B. & Work in L.

But:
+ The monthly cost of the Train ticket won't be cheap
+ Your office had better be near the RR Station in London
+ On the B. side, you had better live withing walking distance
Get the cost of the train, and re-run your numbers

mjc23 (5 mths ago)
Cities outside of London are definitely not slowing down.

OffThePeak (5 mths ago)
Hmm. That is NOT what the article says:
"weakness is rippling out... " (mainly to the Southeast, so far)

I lived in London for over 20 years, and think it will be hard for any city to escape a slowdown for long, of London prices are sliding - since it will undermine confidence (eventually).
But I would agree that London is absurdly overvalued, and other cities like Manchester, Liverpool, and Birmingham much less so.

Seeking confirmation of Trend:
Manchester: http://www.home.co.uk/guides/house_prices_report.htm?location=manchester&lastyear=1

By March 2018 - prices were stronger:
http://www.home.co.uk/guides/asking_prices_report.htm?location=manchester&lastyear=1

mjc23 (5 mths ago)
Birmingham is not in the South East of England.

You can see how well the North West (Manchester) is doing from your report but it doesn't fit with the OP's budget. Birmingham is on the same path as Manchester for regeneration and growth and entry points suit a budget of around HK$1 million.

OffThePeak (5 mths ago)
Sure.
But you gave ZERO evidence -- when the article said the slowdown was "rippling out"
Where's YOUR Evidence?
At least I checked Manchester, and found some strength there

it is probably better to start a NEW thread on the UK, if you want to talk about that.
It is not my main area of interest any more, though I lived there for many years

Things that I would be concerned about in the UK are:
+ More rippling out of London's slowdown
+ The risk of higher rates, or a slowing economy, post-actual-Brexit (if that happens)
+ Increasing social problems, now that it is obvious that the country's culture is fragmenting

mjc23 (5 mths ago)
I'm just addressing what VICHUI has asked and I can provide evidence if they are interested.

OffThePeak (5 mths ago)
Let me encourage you to start a UK thread then,
There may be a lot of interest - I started many Country threads, years ago.
But people may want have a space (here) to talk about THAI property

mjc23 (5 mths ago)
"Any low cost with high capital appreciation opportunity elsewhere? Thanks"

Sent by the original poster today. Like I said, I'm just addressing what has been asked and I'm waiting to see their thoughts.

OffThePeak (5 mths ago)
Putting my Mouse where my words are...
I have started PH#3, about Philippines and Manila.
> https://hongkong.asiaxpat.com/forums/hong-kong-property-finance/threads/d5036271-0e06-4f11-a4fa-8f8264cb5929/manila+and+philippines+property+233/
I still think it would be a great time for a UK thread,
because people who want to make money there, may want some help in looking outside London

Apparently, V's One request is worth more to M that my three suggestions. (haha)

mjc23 (5 mths ago)
I will start a UK thread. As I said, I’m just waiting to see what VICHUI’s thoughts are.

OffThePeak (5 mths ago)
ok.
I started one already. Please feel free to post there

vichui (5 mths ago)
Great feedback Offpeak and mjc23 !

I will seriously think of UK now. But still a bit sceptical about PH just because I am not familiar with it.

Thank you all so much for the valuable inputs.

mjc23 (5 mths ago)
You’re welcome VICHUI, please check your private messages.

OffThePeak (3 mths ago)
SUMMARY : Supalai Monte 2
=========
+ Near Chiang Mai's high speed train station (coming soon)
+ Adjacent to Chiangmai's biggest shopping centre / Central Festival
+ 6% Rental rate of return

Interesting to see this project from Chiangmai being marketed in HK over the weekend
https://i.imgur.com/l8TBNXk.jpg
We visited the showroom over three years ago, when it first went on sale.
We have taken an interest ever since then...

I do not yet know the prices offered now, but it will be interesting to see how it compares with Bangkok,
and also the price from 3+ years ago.

OffThePeak (3 mths ago)
FAST TRAIN: BKK > Chiangmai in One Hour?

I went to the showroom for the Chiangmai, Supalai Monte project. The units looked good.

One surprise for me was what they told me about the coming Express Train. The following is from my notes:

"One of the big selling points was the Bangkok to Chiangmai fast train being built and financed by
the Japanese is scheduled to be completed in 2018. This will mean just a one hour train journey (!)
from BKK to Chiangmai. R. told me this, but he did not seem certain exactly where the
Chiangmai station would be, but he did say the fast train was being built long the tracks of the
old existing railway.

The Chinese financed train from China to Singapore was expected to be completed by 2021."

These two trains, who bring many more Chinese holiday-makers and business people to Chiangmai, and would also help spur more investment in Chiangmai, making it easier fot Thais to keep a second home in the lovely Chiangmai mountain city - 'Lanna Culture' "

(I need to check for more info on the fast train. It is sometimes not easy to get full info on Thailand, since the source material is all in Thai, and not fully translated.)

OffThePeak (3 mths ago)
(BACK in 2011, the advice was this):

Bangkok to Chiang Mai - Fly or take the train?
14 Mar 2011
We are going to Thailand in November and are wondering whether to fly or take the overnight train to Chaing Mai. We both like to be able to sleep and will need to sleep to be ready for sightseeing. If anyone has travelled on the overnight train, do you sleep or is it too noisy? I would like to travel by train just because there will be more to see, but if flying is the best option just to get a good night's sleep etc. then we may have to go down that route.
A:
Train is travel in the night time and arrive in the morning because Chiang Mai is far from BKK. Seat in the picture can slide and you can sleep. If you want to travel by train and see the view and travel maybe have to select other destination.
A2:
A couple of years ago I flew from BKK to Chang Mai and took the train during the day back to BKK - best of both worlds.

Here's a video talking about a 14 hour journey
https://www.youtube.com/watch?v=rVHtNL4lqp8
(in 2016, the trains were improved, but was still something like 11 hours):
"Why 14 hours when an airplane flies the route in one hour? The train makes stop....after stop....after stop. No sooner do you fall asleep then the train lurches and screeches to yet another stop. Buy a hard seat ticket, soft seat, berth in a open second class compartment or a first class, two berth only compartment. Whichever you decide on, it is an "experience."

https://c1.staticflickr.com/5/4490/37013253153_e8e3b7d37d_c.jpg
Since November 2016, The State Railway of Thailand (SRT) had introduced new train carriages running on the express line between Bangkok and Chiang Mai. It is the Train No.9 and Train No.10 overnight sleeper train. These trains are powered by electricity so it is more quiet and calm compared to the old ones.

Note that the SRT hadn’t really completely replace all of their old carriages. The current Express Line and Rapid Line are still using the older trains, so travellers should choose carefully when buying the train tickets. This article will explain some of the features and facilities of the new trains.
> more: https://www.chiangmaitraveller.com/bangkok-chiang-mai-overnight-sleeper-train/

Ed (3 mths ago)
27 out of 45 housing markets that published housing statistics rose y-o-y in Q1 2017.

In our latest Juwai Global Property Index (GPI) Report – which provides Chinese real estate buyers with research for their property investment hunt abroad – we analyse the best-performing housing markets in the first quarter of the year.

https://list.juwai.com/news/2017/08/juwai-global-property-index-report-q1-2017

OffThePeak (3 mths ago)
ASIA HIGHLIGHTS:
Thailand property market relatively weak – nationwide property prices dipped -1.37% y-o-y, but Thailand’s economic growth remains strong, charting a growth rate of 3.3% in Q1 2017.

(Other Asia)
Philippine housing prices boom – average housing prices of 3-bedroom apartments in the Makati CBD grew 7.04%. On a whole, robust economic performance has led property prices in Makati CBD to grow nearly 50% from Q1 2011 to Q4 2016.
Japan housing market slows down – a weak economic performance saw average prices of existing apartments and condominiums grow a mere 2.93%.
Vietnam property market still stagnant – even with a robust economy and revamp of housing laws to enable foreign buyers legally own, sell, and transfer real estate in Vietnam, housing prices only grew a meagre 1.13% y-o-y this quarter.
Taiwan market displays distinct improvement – although nationwide housing prices were merely up by 0.69%, that is a major contrast with the y-o-y slump of -7.65% charted the same period the year before.
Singapore market stays sluggish – while housing market demand is showing strong growth, housing prices still declined -3.45% in Q1 2017.
=====

Was the Thai drop due to BKK?
Bangkok prices are far higher than Chiangmai prices

vichui (3 mths ago)
With 50 to 60k new apartments year over year on top of the existing vacancy of over 20% in general, I am not sure how much they can grow !

OffThePeak (3 mths ago)
THE SUPPLY issue is one reason I want more info on the Express Train.

Much reduced Travel Times could be the main thing that would trigger a quantum jump in Demand in a place like Chiangmai, which is in the mountains and has a very different climate than Bangkok.

Ease of travel could spur business tourist and MICE related demand

Thomasmalthus (3 mths ago)
There is an enormous oversupply of property in the major centres of Thailand.

I have friends who built holiday homes there and they rue the day they made that decision.

1. Because there is a glut it is difficult to achieve even 30% occupancy rates, and the nightly rates are brutal because of the competition. Everyone is discounting. Everyone can easily access the market on sites like Airbnb. It is a race to the bottom

2. Because of this low occupancy one of my friends decided to try the long term rental market. Same problems only worse. The monthly rent was barely enough to cover management and upkeep of the property. And at the end of the tenancy the apartment was a mess and required new paint and loads of other renovations. He ended up deep in the red and will never take a long term tenant again.

3. Because of the glut it is very difficult to sell without losing money.

Both of them are sitting on white elephants, boondoggles. And they both refer to their Thailand adventures as one of the worst investment decisions they ever made.

OffThePeak (3 mths ago)
What location was this Thomas?

Thailand is a big place, and you are painting your picture with a very broad brush.
The comment would be much more useful if you would give specific comments on specific locations

Example:
If Bangkok and Chiangmai are just the same, then why are prices in BKK 2X-3X higher?

spannermonkey (3 mths ago)
Vichui,
If you're serious about Phuket property and looking for a good yield, I'm currently in the process of selling my townhouse. The only reason why im selling is because Ive moved back to the UK and its unlikely we'll return to Phuket in the near future. We lived in the house for 18 months and spent a fortune on the interior fit out and kitchen. Its got a private pool and off road parking. Full unobstructed lake views. Its currently rented out at 50K baht per month so the yield is good.
We just need to sell it now as I need the funds for a new house purchase here in the UK. PM me if you'd like to know more details.
thanks

vichui (3 mths ago)
Hi Span, I was thinking about Bangkok initially. Is your townhouse freehold or leasehold? Thx

chey (3 mths ago)
As foreigners cannot own property in Thailand how have the home owners referenced / contributing here managed it?

I am considering buying a Thai property with a view to renting it out and really appreciate the all the info / perspectives-thank you. Does anyone have a positive experience of owning and renting a phuket property (in addition to spannermonkey)?

Thomasmalthus (3 mths ago)
Regarding my comments earlier, one of the properties was in Phuket the other was in Hua Hin.

Both were higher end properties in very good locations.

I think the Hua Hin property was in the Sheraton http://www.sheratonhuahinpranburi.com/?ES=LPS_SHHR_SI_3989_EN_AP

I am getting rates for a pool villa with breakfast for 2 adults and 2 kids of HKD1200 per night. Keep in mind this is managed by Sheraton so that would be attractive to tourists (over renting without reputable management on Airbnb) so the rates will obviously be higher.

And obviously the Sheraton would take a big cut of that revenue as a booking fee, additional management fees, and the cost of breakfast for four. Not a lot left for the owner who no doubt would also be paying Thai taxes on the income.

As mentioned, both had horrific short and long term rental results.

Both owners put this down to a glut in holiday rentals coupled with the ease of targeting tourists on sites such as Airbnb. You have thousands of villa owners chasing the tourist trade and there is a race to the bottom on rates.

I would recommend you have a look at Airbnb rentals in Phuket to get an idea of the occupancy levels and rates you can achieve.

OffThePeak (3 mths ago)
"I am considering buying a Thai property with a view to renting"

Buy one secondhand, and you will get it cheaper (if you buy smart),
and thereby enjoy a higher yield

Personally, I would tend to avoid the pure Tourist locations:
Too many buying there to rent out to....
I don't think they ponder enough their target tenants in places like Phuket.
When the Russians stopped going a few years ago - demand took a big drop,
but people kept buying Condos to rent out (to whom??)


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