Source: The Nation

An increasing number of Thai investors are taking an interest in property projects overseas, in the light of declining asset values and the prospect of a global economic recovery next year, international property agency Jones Lang LaSalle (Thailand)’s managing director said.

Thai investors have shown a strong interest in expanding their investments in commercial buildings in overseas markets including the UK, Japan, Hong Kong and Singapore, Suphin Mechuchep said.

“If they wait to buy at the bottom price in the second half of this year, they stand to lose a business opportunity because investors from other countries also sense a bargain. As a result, Thai investors are keen to buy or take over commercial assets overseas,” she said.

Investments made now could generate average returns of 7 to 10 per cent a year, she said, adding that their break-even period should also be shorter.

Suphin pointed out that Central Group invested in CentralWorld and @Office on Ratchaprasong Junction during the financial crisis of 1997. Central Group now sees an average return on investment from the project of 7.5 to 8 per cent a year.

Quality Houses took over the QH Lumpini office building in 1998, shortly after the crisis. Its return on investment averages 7 to 8 per cent. Returns on investments made during economic slumps tend to be bigger and come in quicker than investments made in normal periods, Suphin said.

Meanwhile, Tonson Property, a development and investment arm of the Rattanarak tycoon family, has set aside Bt500 million a year to invest in commercial properties such as hotels, resorts and office buildings in both the domestic and overseas markets.

The Rattanarak family holds a major stake in Bank of Ayudhya.

The company’s managing director, Kanis Saengchote, said now is a good time to invest in property and commercial buildings because asset values are between 30 and 50 per cent lower than in normal periods.

“We are negotiating with French, British and Middle Eastern investors to raise money through property or other funds. This will be combined with our capital to expand our investments,” he said.

TCC Land, the property arm of beverage tycoon Charoen Sirivadhanabhakdi, has set aside Bt4.5 billion to invest in commercial property overseas this year, with a focus on the retail and hospitality businesses, deputy CEO Soammaphat Traisorat said.

Early this year, the company took over a hotel in New Zealand worth nearly Bt1 billion.

“This is a good time to invest, as we can bargain for a discount of more than 30 per cent compared to last year,” he said.

TCC Land owns a number of hotels in Thailand and overseas.

Thai investors look to overseas property

Technorati Tags: Thai investors look to overseas property

Source: The Nation

Mega-projects expected to boost growth this year and next

Thailand’s leading construction contractors expect to gain an increased share of work from the government’s new Bt500-billion mega-projects, especially the new rapid-transit systems, and this will drive their revenue growth this year and in 2010.

Italian-Thai Development’s president Premchai Karnasuta said his company expected to pick up about 40 per cent of the work in constructing the new rail routes. Bidding will open this year for contracts worth nearly Bt100 billion – the first part of the total Bt500-billion cost of the mega-projects to be built over the next five years.

Italian-Thai is expecting new construction contracts worth Bt200 billion this year, and part of this will come from the mega-projects, especially the new rail routes, he said.

At present, the company has won the bidding and signed contracts for projects worth Bt50.7 billion. It has offered what it claims are the lowest bids for further projects worth Bt101.2 billion, and expects to sign contracts for these later this year. It is also involved in the bidding process for yet more projects worth Bt110.2 billion.

“We expect to win more than a half of the [projects valued at] Bt110.2 billion, which are currently in the application process,” Premchai said.

In the construction business, Italian-Thai Development ranks in front of other contracting companies listed on the Stock Exchange of Thailand. It expects to record a net profit this year, from the both private and the government projects, after suffering a net loss Bt2.65 billion in 2008, he said.

Ch Karnchang’s executive-board chairman and chief executive Plew Trivisvavet said his company had a backlog of signed construction contracts worth a combined Bt12 billion. It expects to win new contracts to help build the new rapid-transit rail routes that will increase the value of its projects on hand by nearly Bt10 billion this year, he said.

In addition, it has other contracts waiting to be signed. They include the first contract for construction of the Purple Line rapid-transit route, the construction of an underground pedestrian tunnel at a Bangkok intersection, a small power plant in Ayutthaya’s Bang Pa-in district and the Nam Bak Dam in Laos.

As well, Ch Karnchang is planning to bid for many other projects, including the Red, Blue and Green lines, as well as road-construction jobs in India and Vietnam.

The company believes the Purple Line contract will be the most profitable one, even though CKTC – a joint venture between Ch Karnchang and Tokyo Construction – had to lower its project price in the most recent round of negotiations with the Mass Rapid Transit Authority.

Plew said the worsening local economy would not affect Ch Karnchang because the government would implement many measures to shore up the economy and maintain employment. He expects the company’s revenue and net profit to surpass those of 2008, which was a difficult year because of volatile construction-material prices.

This year, prices seem stable, which makes for easier management.

Last year, Ch Karnchang and its subsidiaries posted consolidated revenue of Bt14.51 billion, down from Bt14.92 billion in 2007. But the group recorded a higher net profit of Bt544 million, up from Bt14 million in 2007.

With more government projects open for bidding this year, a number of securities brokers are recommending “buy” on the stocks of construction contractors, especially Sino-Thai Engineering and Construction, Ch Karnchang and Syntec Construction.

Siam City Research Institute has maintained a “neutral” recommendation for the entire contractor sector, saying delays in government spending on infrastructure projects, while limiting the amount of construction work done in the short term, will keep the sector’s earnings stable during the first half of 2009 and lead to a possibly significant rise in the second half.

The institute believes that Cabinet approval of four electric train routes – the Purple, Red, Light Green and Green lines – will assure the contractor sector of continuous revenue from this year until 2013.

The broker believes the number of construction projects will increase during the second half of this year, starting with the Purple and Red lines, worth Bt36.05 billion and Bt8.7 billion, respectively. It says a start on the infrastructure mega-projects should boost confidence among private investors.

Siam City Research Institute’s top pick in the contractor sector is Ch Karnchang, for which it has made a “buy” recommendation with a fair value of Bt4.50. It says the firm’s earnings are expected to improve this year on the strength of its backlog, which is worth as much as Bt12 billion.

There is also the strong possibility of new small-power-producer projects worth Bt18 billion, a planned tunnel beneath Charan Sanitwong Road, and the construction of the Purple Line. These will contribute to Ch Karnchang’s 2009 earnings, which are expected to grow by 4 per cent year on year to Bt13.87 billion, as well as strengthening its earnings over the next three to five years.

Asia Plus Securities’s head of research Therdsak Thaveeteeratham agreed that construction-material costs were no longer a concern for the sector, which absorbed high steel and oil costs last year. He also echoed Siam City Research’s view that the number of new construction projects would increase in the second half of this year.

The sector is likely to record combined net profits of Bt1.17 billion this year, marking a turnaround from last year’s loss of Bt1.44 billion, he said.

Therdsak’s top picks for the sector are Sino-Thai Engineering and Construction and Syntec Construction.

Sino-Thai is a major contractor with expertise in the construction of power plants, petrochemical plants and waste-management systems. Its financial situation is strong, with cash reserves at the end of last year totalling Bt974 million – higher than its short-term borrowing of Bt769 million. Thus, Sino-Thai’s debt-to-equity ratio is as low as 0.2 times, leaving the firm well prepared should any liquidity problems arise this year, Therdsak said.

Sino-Thai’s backlog is worth Bt12.09 billion. This year, it is expected to post an operating profit of Bt285 million and pay its first dividend to shareholders. Asia Plus gives it a fair value of Bt3.83 per share.

The broker said Syntec’s expertise was mainly in high-rise buildings, condominiums and hotels, which provided higher profitability than other types of construction projects.

Most of its customers are listed firms, which carry a lower risk of exposure to bad debts. The company’s financial status is strong, with cash reserves of Bt431 million.

This year, Syntec is expected to post an operating profit of Bt227 million, with revenue from its backlog last year totalling Bt6.2 billion. Asia Plus gives its stock a fair value of Bt0.57 per share.

Thailand’s contractors prepare for good times

Technorati Tags: Thailand’s contractors prepare for good times

Source: Bangkok Post

Apparently with the backing of Prime Minister Abhisit Vejjajiva, Finance Minister Korn Chatikavanij has embarked on what critics might call a foolhardy but noble endeavour: to introduce the country’s first property, land and inheritance tax legislation.

According to latest reports, the draft bill crafted by the Fiscal Policy Office has been completed and will soon be put before the cabinet for consideration.

In defending the legislation, Minister Korn reportedly said the government’s intention in introducing such a law was to create social justice and fairness. But he noted that the law – if it ever makes it through parliament – would not become effective this year or the next.

In essence, the law seeks to impose taxes on ownership of land and property whether it is for living, commercial, industrial or agricultural purposes. Ownership of unutilised land may face higher taxation than utilised land, as the law is intended to encourage owners to make use of the land in a productive manner rather than leave it idle.

The most important feature of the law is that the taxes will not go into the national coffers but to local governmental bodies such as municipal or tambon administration organisations, which will be tasked with tax assessment and collection.

In return, the taxes collected would be used for the development of the communities, for investment in public utilities and infrastructure which consequently would increase the value of the property and land already taxed.

There is no denying that such legislation has been long overdue in this country, where most of the land is owned by a very small number of landlords who include politicians, senior government officials, big business operators, influential figures and aristocrats, while the majority of the people are landless. Many rice farmers whose forefathers owned the land have sold their farmland to pay mounting debts and are today toiling on the same plots leased from their creditors.

The acute problem of landlessness among impoverished farmers has driven many of them to resort to encroachment of forest reserves in search of land to make a living, thus exacerbating environmental degradation. Worse still, the encroached land plots may be used for a few years of farming after which they end up in the hands of the landlords, with the farmers embarking on further encroachment for new farmland.

Minister Korn and his backers should be commended for their courage in attempting to introduce a law that is sure to face stiff resistance from the landlords, even within the government itself.

The minister certainly realises that several governments over the past several decades had tried to push for such a law and failed. Some of them backed off mid-way after confronting hostile resistance from powerful elements. It will be an uphill task for Mr Korn to solicit support for such legislation even among cabinet members, many of whom are known to be landlords themselves.

This anticipated resistance should not serve as a reason for backers of this controversial legislation to back off if they truly believe that the law is meant for the good of the people as a whole, the landlords included, and if the legislation has been drafted to bring about social justice and fairness.

At least Mr Korn and his supporters can rest assured that they have the moral support of the landless and of those who aspire to see this long overdue problem of social injustice finally and properly dealt with.

Thailand’s first property, land and inheritance tax legislation?

Technorati Tags: Thailand’s first property, land and inheritance tax legislation?

Source: Property Report Asia

Investors have snapped up the limited number of new luxury condos available in Chiang Mai over the past 18 months, but finding tenants is proving more difficult. A combination of over-confidence in the rental market, construction-site proximity and bad location are all reasons given for the lack of demand among tenants. Yet new projects appear to enjoy buoyant sales, reports Andrew Bond.

The emergence of a small but certain luxury condo market is one of the key characteristics of property in this Northern town which has been overhauling its image somewhat in recent years. The arrival of several five-star hotels and the gentrification of areas such as Nimminhemin road and the Night Bazaar area are signs of confidence in a more cosmopolitan city atmosphere. The city has also noted a marked influx in foreigners becoming residents here, and traditionally this sector has supported the existing condo market. Now, buildings such as Twin Peaks, Kharn Kanok and Punna are offering foreign buyers and residents far more choice.

Gone are the days of settling for 40m2 studio units in traditional condo developments. A sense of flair, spaciousness and modern living are hallmarks of a new generation of condo buildings for the burgeoning expatriate crowd settling in Chiang Mai. In addition, more and more wealthy outsiders, from Bangkok, Singapore and as far away as Hong Kong, are buying themselves weekend pads in the city, bringing with them luxury expectations.

For proof of demand you need only step into the sales office of any of these new projects. Twin Peaks sold out last year shortly after the official opening and is reporting brisk interest in their new half-finished Peak Gardens. Siritara, a building on the outside of the city limits with pretensions in the luxury league, has only a few units left. Meanwhile, Baan Kharn Kanok III near the National Museum sold out its entire 49% foreign-owned quota before the foundations were even completed.

But perhaps the most exciting new project is the Punna Residence, which will add a new level of sophistication to the trendy Nimminhemin area. Priced at a little over Bt35,000 a square meter, these uber-chic apartments offer excellent value for money and initial sales have been encouraging. Each of the sales agents interviewed reported block buying and there were even two cases of people buying without setting foot in the building. There’s obviously no concern about demand, the big question however is; who is going to rent all these relatively expensive luxury condos in a city that is known for being cheap?

In Chiang Mai, condos have always had to compete with suburban house which offers a far better lifestyle for the same price. Where Bt20,000 a month will get you a modest, two-bedroom, 90m2 unit in a smart building, it will definitely get you a comfortable four bedroom house and garden in one of the many new housing projects a little further out. And traffic is still manageable, mitigating the need to be centrally located. But there is a sizeable portion of renters who don’t live in Chiang Mai year-round and prefer the practicality of a condo. Then there are owner-occupants who can afford a part-time second home in this very affordable city. Another group is the increasing number of foreigner retiree couples who cannot own houses so they opt to buy and live in condos.

However, many investors who have cashed in on this emerging market are now struggling to rent these condos out and recover some equity. For others, who have yet to take full ownership, it remains to be seen if this spike in new units is sustainable. First signs of trouble came in the form of a complaint email to Property Report concerning legal issues with Twin Peaks. Since the departure of their congenial Marketing Director Manus Nararatwanchai last October, owners have been complaining that their concerns and problems have been largely ignored by the management or dealt with slowly. This has hampered efforts to find tenants.

One Briton who owns several units even successfully used their inaction as an excuse to delay instalment payments. As he pointed out, this suited him since he had written off chances of finding satisfactory tenants while the enormous Shangri-La hotel is being constructed right next door. Indeed, what was once a selling point on their brochures has turned into a serious problem for Siam Zokie, the Japanese-Thai developer who cannot fathom why foreigners won’t tolerate the incessant noise. The hotel is also higher than they thought, ruining views from some of the apartments.

An American buyer recently won a court case against them in this regard when the defendants failed to show up at proceedings. Another legal challenge is currently pending against the company from an agent who claims they have repeatedly ignored his demands for commissions owed. Other complaints which suggest why tenants cannot be found include leaks, long delays in attending to decorating problems or requests (outside contractors are not permitted), and failure of management representatives to honour critical meetings. Earlier this year the Saha Group took on a large share of Siam Zokei, amid rumours of financial difficulties.

But these problems aside, Twin Peaks and Peak Gardens do boast an unbeatable central location down a quiet soi, and will benefit by appealing to the significant, often flush, Japanese contingent in town. The units are comfortable, if a little confined, but at Bt60,000 a square meter they are some of the most expensive in the city. Simply put, the rental price required to achieve respectable returns are simply way above the Chiang Mai average.

Another building that seems suspiciously empty is Siritara Condo. With units selling for as little as Bt700,000 and no swimming pool yet, it’s a stretch of imagination to call it a luxury development, but the modest price tag (Bt22,000 per sqm) has helped it sell out most of the 100-odd units. Its key selling point is the fantastic views in both directions, which are unlikely to be spoilt by any further development in the area. This is because the building is located on the first ring road, a 20-minute drive from the centre, and explains in part why only 12 apartments are permanently occupied.

“Who wants to live in a concrete block out in the rice fields,” one prospective buyer quipped. Some are up for resale while others are weekend places for Bangkok owners. A local agent revealed one of his clients owned several and was struggling to rent them out. “We initially experienced good sales of various luxury condos,” the Australian agent related to us, “but frankly I don’t think Chiang Mai has enough people who can afford these rents, who wants to pay 20k rent a month when you can get a house for that price,” he explained.

On the other hand, Baan Karn Kanok III is much better located, just off the superhighway and within proximity of the Nimminhemin area. Yet it’s in a quiet and leafy neighbourhood close to the mountains. There are only four floors, and the progressively designed apartments include duplex units. These sold out remarkably quickly, and very few are up for re-sale. In fact, the success of the project has prompted this established Chiang Mai developer to proceed with Karn Kanok V, a similar building closer to the Seven Hundred Year Stadium complex. Buyers are due to take full ownership this month, although it is unlikely to be fully completed for a few more months. A number of condos are still available for Thai ownership, and priced at Bt25,000 per square meter they are very good value. Nonetheless, it will probably be a good litmus test of just how successfully the luxury market can sustain itself in Chiang Mai.

Then there is Punna Residence which is going up on the busy corner of the popular Nimminhemin road and soi 6. The sheer professionalism and thoroughness of the developers, notwithstanding their relative youth and lack of experience, is enough to convince prospective investors that this building might be the new trendsetter for Chiang Mai. With the cheapest units already sold out 12 months ahead of the planned completion, this handsome building still offers an interesting range of choices at roughly Bt35,000 per square meter. Despite the noisy student bars in the area, this mountain-view condo is likely to be a very desirable address in Chiang Mai, located as it is in one of the most happening areas of the city.

In addition, these buildings also have competition from Convention Condo, located round the corner from Karn Kanok on the Canal road, but yet to break ground. Floor plans suggest rather cramped units and some low-end tenants, and the developers seem to have a vague track record. But this project certainly is worth visiting. As with many buildings in Chiang Mai, you need to consider the environs and likeliness of a lofty building or noisy karaoke bar appearing as a neighbour – this is a chronic problem in Thailand.

For investors, the conundrum remains. Do you cash in on an affordable and relatively uncrowded emerging market, but risk waiting to see if the equity is really there? The fact remains that Chiang Mai attracts those who can’t afford to retire anywhere else, and their disposable incomes are modest. On the other hand, you might be assured to know that several buyers have already done quite well purchasing units pre-build, with only deposits tied up, then successfully reselling for a decent profit after completion. Local knowledge does help, as well as patience in the city’s outlook.

Chiang Mai’s condo conundrum

Technorati Tags: Chiang Mai’s condo conundrum

Source: Property Report Asia

Luxury international hotel brand Shangri-La Hotels and Resorts has just opened the doors to a brand new 281-room Chiang Mai hotel.

The Shangri-La Chiang Mai is the company´s second Thai hotel, the first being the luxurious Shangri-La Bangkok hotel. The arrival of another big name brand to Chiang Mai will be a welcomed by the city´s property developers, who invariably benefit from the profile boost brought by well known companies.

As well as its 281 guest rooms, the hotel boasts four separate food and beverage outlets. It also features the northern city´s largest meeting and event centre space (3,500 square metres) and a range of function rooms that can accommodate a banquet or event for up to 1,700 guests. The design and architecture of the hotel features a number of traditional themes and draws on the city’s 700-year history for design inspiration.

Board members, owners and officers from Shangri-La Hotel International Management, Hong Kong and Shangri-La Hotel Public Company Limited, Thailand, high-level government officials and other VIP guests gathered to celebrate the opening, which was held in the hotel’s Grand Lanna Ballroom. The opening ceremony was officiated by Pong Sarasin, chairman of Shangri-La Hotel Public Company Limited, Thailand.

The hotel is located in the heart of Chiang Mai on Chang Klan Road, a 10-minute drive from the domestic and international airport, and within walking distance of the city’s night bazaar. Hong Kong-based Shangri-La Hotels and Resorts currently owns and manages 55 hotels under the Shangri-La and Traders brands, with an inventory of over 27,000 rooms.

Shangri-La opens Chiang Mai hotel

Technorati Tags: Shangri-La opens Chiang Mai hotel

Source: Property Report Asia

Building a house in Chiang Mai is a popular and rewarding option favoured by a disproportionate number of property buyers in this city. Both Thai and foreigners get involved in Chiang Mai house building. The construction and material costs are relatively cheap and there are enough experienced companies to achieve a quality result if you find the right builder.

Since land is cheap in Chiang Mai, many foreigners prefer to acquire land and build their own Chiang Mai house rather than live in condos or move into an existing house that might not suit their preferences. The luxury of a garden and space is very affordable in Chiang Mai and typically foreigners might buy a rai or more, usually to keep a distance between them and their neighbours. It’s not uncommon for Thai house builders in Chiang Mai to use up 90 per cent of their land with construction, resulting in densely developed neighbourhoods.

Finding a reliable, quality builder is the first major challenge. Companies don’t tend to advertise in the English language media, nor do they have an English speaking representative. In fact their operations are often quite unsophisticated, using basic tools. But they do get the job done at good value for money and the outcome can be very satisfactory. Spending more doesn’t necessary guarantee quality, as many builders have become familiar with charging more when foreigners are involved but are unable to deliver to expectations.

Word of mouth is a popular means of finding a good builder for a Chiang Mai house. Architects can also recommend builders, although there is often a ‘gratuity’ motive in their choices. Although it’s good to work with a builder and architecture who are familiar with each other, it’s worth checking other examples of their work and to compare prices. In fact construction prices can vary wildly depending on materials used, design and quality. Basic construction prices for Chiang Mai house building are usually between 8,000 and 15,000 baht per square meter. It’s advisable to aim for the higher end of the scale as quality in Chiang Mai is perceived differently from western standards.

When building a house in Chiang Mai there are a number of hazards to be aware of. Shortcuts can occur if you’ve bargained too hard, and regular inspection of the work is necessary. Furthermore, companies favour using cheap Burmese migrant labour. Often they are illegally working and underpaid. If caught, the property owner can be liable for the fine, and there are also moral implications. Delays to completion are another frequent complaint when building a house in Chiang Mai and often the initial development occurs rapidly but the installations take time due to poor co-ordination with sub-contractors.

Attention to detail is perhaps the biggest problem among Chiang Mai house builders. Thai builders are used to concentrating on the superficial appearance but smaller details can be lacking, such as wood finishing, spirit level use, and placement of fixtures and fittings which can often be ponderously located without any direction from the house owner. Typically, the builder will not consider the clean up as part of their job and you’ll be left to remove rubble and leftovers, clean up paint speckles (sheets and taping are seldom used in the paint job), and wipe down everything.

If everything goes according to plan you can make significant gains in value to your property by building a Chiang Mai house yourself. The construction costs may be cheap but the headaches and potential loss through mistakes adds a higher risk that many foreigners would rather avoid. However, since most existing houses were built with Thai preferences in mind, often typified by small dark rooms, grand entrances but poor use of space, exterior kitchens and too many bathrooms, it’s advisable to build something more suited to your own tastes. If you succeed, you should end up with a property that is valued at roughly 20 per cent or more of it’s development cost.

Building a house in Chiang Mai can certainly be fun and rewarding. This is due to an abundant supply of materials and fittings available at numerous specialise home builder suppliers throughout the city. There are also two excellent one-stop shops; Home Pro in the Carrefour centre and the new Global House (southern 1st ring road) which have an astonishing range of local and imported tiles, flooring, built in kitchens, bathroom fixtures, lighting, garden accessories and more.

Finally, the local hobby of gardening and landscaping means that there is a wonderful plant market at Khamtien, along with several mature tree markets found alongside highways, and all sorts of tropical garden accessories made and sold at Baan Tawai crafts centre. This means you can developed a very nice, established, garden without much effort.

Building your own house in Chiang Mai

Technorati Tags: Building your own house in Chiang Mai

Source: Property Report Asia

The biggest market among foreigners is condos in Chiang Mai. Like the rest of Thailand this is because of foreign ownership restrictions on land. There are few foreign managed developments that exclusively target foreigners, like in Samui for example, where complex ownership arrangements have been designed to accommodate villa sales.

Condos in Chiang Mai are the easiest and most practical way to acquire property and many of the retirees coming to live in Chiang Mai prefer this option. However the city also attracts a proportionately large number of foreigner-Thai couples or families who have the right to own land and thus a suburban house.

The condos market in Chiang Mai is nowhere near the league of Bangkok, neither in choice or price. In fact the selection is rather unsophisticated and only recently have new developers, such as Siam-Zokie, brought elegance and luxury to the city market with the their Twin Peaks building.

Despite this there are several buildings that are very popular with foreigners, usually for their location, professional management or comfort. Many of the condos in Chiang Mai were built for Thai tastes and lack some of the key characteristics favoured by westerners such as sizeable Balconies, space and natural light, and kitchenettes.

Another peculiarity about Chiang Mai condos is the number of nearly empty or under occupied buildings dotted about the city. Much of this is the legacy of the ‘97 crash and the current owners a^EUR” the banks – have done little to regain equity from them. Many believe that a building with an air of abandonment will not attract tenants at any price. Some foreigners are doing well, buying these up cheaply, doing them up and leasing them out to other foreigners who are less concerned about ‘empty buildings’.

Perhaps the most popular building among the condos of Chiang Mai is Hillside 4, on Huay Kaew road, which is close to Kad Suan Kaew Mall, and the trendy Nimminhemin road. Many local term residents here have bought the 45m2 units and rent them out to other foreigners. There is a steady demand, it has held its value and the building is maintained properly. The latter point is a particular sore point among foreigners who stay in a building that is almost exclusively Thai and lacks any effective tenants association. Flora is another popular building, although much more expensive and units here seldom change hands.

Buildings in the downtown area should be given a thorough survey before buying, as you will struggle to maintain the value of your asset, while those along the riverfront go at premium prices. The biggest suitable selection is found near Nimminhemin road, along Huay Kaew road and near the university. The many ’student dormitory’ blocks should be ignored if you are serious about buying a meaningful piece of property.

Condos the biggest market in Chiang Mai among foreigners

Technorati Tags: Condos the biggest market in Chiang Mai among foreigners

Source: Property Report Asia

Those looking to buy a house in Chiang Mai will find some exceptional value comparative to their home countries. In fact it is one of the cheapest desirable places in Thailand to buy a house. Chiang Mai has a pleasant atmosphere, making it popular among retirees and Thai-foreigner families. The abundance of land and suburban character of the city further popularises houses over condos.

Since houses require land, the ownership by foreigners is a tricky situation. If you do not have a Thai spouse to own the land title deeds, you can perhaps se tup a 30 year lease of land from a Thai owner, which some have chosen to do. The option to form a Thai-foreigner owned company which will own the land is now less popular since the authorities pledged to check the legitimacy of the minimum 51 per cent Thai ownership arrangement. In order to buy houses in Chiang Mai you will have to meet the requirements for land ownership.

If you have a lawful avenue for ‘del facto’ ownership, you will find there are plenty of options, with a general buyers market resulting from an oversupply. The trend among the middle class Thai to move into housing projects has left many of the older (10 to 20 year age) houses on the market. Unfortunately many of the owners set unrealistically high price tags on them, seemingly oblivious to the fact the market demand is far below the speculated value they have placed on the house. Many lost significant value after the ‘97 crash and still hope to eventually recover the original value.

There are plenty of agents to help you buy a house in Chiang Mai, although they are known for wasting time driving you around to many obviously unsuitable properties. Since there is less structure to good and bad suburbs it’s difficult to pinpoint an area. Those suburbs immediately north and south of the airport suffer noise pollution, while a house in a village might be subjected to noisy early morning announcement, feral dogs and the local karaoke bar.

Before you buy a house in Chiang Mai, it’s advisable to fully familiarise yourself with the various areas, do some due diligence on the neighbourhood at various times of the day and check for latent defects, as sellers are notorious for keeping quiet on chronic problems.

Furthermore, when you buy a Chiang Mai house you will, after a few agent trips, discover that many of the older houses where designed with for Thai preferences which include smaller, darker rooms, no outdoor living areas, outdoor kitchens, too many bathrooms and lack of privacy. The newer houses are more suited to Western tastes.

Perhaps the safest option is to consider the gate communities that are so popular among the Thai. There is an over-supply of these, and only established companies where a critical mass of occupants has been achieved should be considered. Some fail and the maintenance upkeep is lacking, others have an air of abandonment due to inexperience with marketing and management. Those at the top end however can have a lovely suburban feel to them and those buying houses in Chiang Mai among these provides a comfortable and prozac lifestyle with plenty of supporting facilities. These do tend to be markedly more expensive for you pay for the prestige.

Houses in Chiang Mai offer exceptional value

Technorati Tags: Houses in Chiang Mai offer exceptional value

Source: Property Report Asia

Chiang Mai is yet to become the ‘hot property’ that Phuket, Samui or Pattaya is, but it does claim to be one of the most liveable cities in Asia; in fact it was voted 9th in a recent Asia-wide poll. On the whole property in Chiang Mai is considerably cheaper than other major centres in Thailand, but the market is far less dynamic.

The Chiang Mai real estate industry has, however, grown very confident in recent years as this Northern Capital has prospered and produced an ever increasing Thai middle class. The other major trend to affect property in Chiang Mai is the noticeable influx of foreigners choosing to settle in Chiang Mai. It is generally regarded as cheaper, less touristy and less congested than Bangkok or Phuket.

Living in Chiang Mai
Chiang Mai is touted as one of Thailand’s best places to settle. In addition to being cheaper than Phuket or Bangkok, it has a large expat community which is supported by clubs and organisations, and the locals are used to dealing with foreigners preferences. As a tourist town it boasts an modern infrastructure with plenty of international restaurants and a cosmopolitan atmosphere. It is also supported by professional services, such as English speaking lawyers, and has several malls and an excellent house building supply chain. But it’s perhaps the laid back, unhurried character, impressive history and culture, cooler weather and lovely nature areas nearby that attract the outsiders.

Buying Property in Chiang Mai
Real estate in the city is supported by a professional network of agents, although you will find few of the sophisticated developers that typify the property market in Phuket or Samui. They do actively target foreigners and are experienced with both condo and house sales, offering Chiang Mai property that ranges from single 45m2 studio condos in popular ‘farang friendly’ buildings for under a million baht to fantastic value-for-money mansions on a rai or more for 10 million. More on buying property in Chiang Mai.

Condos in Chiang Mai
Buying condos in Chiang Mai is the most popular option among foreigners who have no legal avenue to own land. Several luxury or well managed buildings are almost 50 per cent occupied by foreigners, particularly in the Nimminhemin area or along the river. But property in Chiang Mai is also noted for the over supply of condo units, many of them in bank-owned buildings that have been neglected. Several new luxury condos have recently changed the real estate market here, while others such as Flora and Hillside 4 are perennial favourite. More on buying condos in Chiang Mai.

Houses and land in Chiang Mai
One advantage to real estate in Chiang Mai is the affordability of land, and many foreigners choose to rent or buy/build houses. The city limits are expanding rapidly, thanks to a new network of concentric highways and many house projects are under development. Although targeted at the Thai middle class, they have proven popular with foreigners, particularly those with a Thai spouse to own the land. Others find that a rai of land within the muang (city) district can cost less than 3 million baht and they prefer to take advantage of cheap building costs and an excellent choice of material suppliers. More on buying land and houses in Chiang Mai.

Investing in Chiang Mai property
Not considered a priority among property investors in Thailand, Chiang Mai real estate does still present some less competitive options for those with a lower budget ceiling. The real estate industry in Chiang Mai is somewhat bewildering, with a seemingly over-supply, unlimited new land, and plenty of ponderous developments. The result is an unstructured property market that is difficult to initially get your head around, but with familiarity you can soon identify bargains and opportunities.

Chiang Mai voted 9th most liveable cities in Asia

Technorati Tags: Chiang Mai voted 9th most liveable cities in Asia