Holt-Realty Newsletter, January 2007

Condominium Sales & Large Properties

The last month has seen an upsurge in interest in buying condominiums. However, despite the new building frenzy to cater to the market we are experiencing a condo shortage again. I have been telling people for more than five years not to worry about the large number of condominium projects going on. We have never been able to get enough listings onto our books and demand has remained high.

Despite these assurances, I continue to get people coming to me worried that there will be a 'glut in the market'. Let me make this clear. Demand continues to grow for condominiums and I don't see a slow down in the condo market for a long time to come. Thailand's property market is only just getting started. Despite the troubles over the last year, Westerners are still looking for a place in the sun to retire to. Thais are still making money and investing it where they can expect to make a reasonable profit, and the property market offers the best rewards.

Having lived more than 25 years in Thailand, I have seen crises come and go. As the Buddhists say, all things pass, and the current political problems will resolve themselves eventually too. The Thais are pragmatists. They are already seeing the effects the recent shortsighted policies are having. The people are grumbling as their earnings have been hit. The situation won't be allowed to continue for much longer. Change is in the air. I can feel it, and so can many of the Thais I talk to. No one knows exactly what that change will result in, but things can't get much worse than they are. Only one other event will have a very sorry and depressing effect on the country. Let's hope it is not for a long time yet. However, even that event will be resolved and life will carry on.

Now that the government is tightening up the Foreign Business Act to prevent foreigners setting up Thai nominee companies to buy property, condominiums are even more popular. The law is aimed at discouraging foreign developers buying large plots to build housing estates and condominiums. Even though the new law has not gone into effect yet, the announcement about the change was enough to stop almost all home sales. The resulting slump in the housing market has already hit major Thai developers. They are pulling back and aiming at the low to medium market instead.

However, condominium developers are seeing a rise in their sales. People are rushing in to buy up whatever they can. New condos are selling off-plan before the ink is even dry. Construction has already started on several new condo projects in Pattaya and Bangkok, and more are getting ready to start.

A word of caution here, though: Two clients this month have told me about deals that went bad. One was for a housing project in Samui Island, and the other was for a condominium project in Pattaya. Both were lucky enough to get their deposit back when the projects fell through. But I know others have not been so lucky. So, if you are looking at the market now to invest in property, make sure you check out the developer's credentials thoroughly before putting down a deposit on a new project. Make sure the developer has solid financial backing and that he owns the land already. Look for those who have a track record of finished projects.

Some so-called developers are drawing up plans for their projects, putting a retainer on a plot of land, and then pre-selling enough units to finance the land purchase and their project. Buying from developers like this is risky. Sure, it has worked plenty of times in the past, but how can you be sure it will work when you put your money down?

The Thailand property market is no different than any other place in the world. Before you buy, do your due diligence and make sure you go into a deal with your eyes wide open. Work with a reputable agent and you won't go wrong.

We have also seen an increase in the number of inquiries, many of them from Thais, for large properties like resorts, hotels, and large plots of land. We have plenty listed, and we are getting more almost every day. We also have a small but attractive selection of golf courses for sale. So, if you know someone who needs a large property we are one of the best sources in Thailand.

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A Change In Our Business Strategy

When we started Holt-Realty.com we listed properties all over Thailand. But I have decided to stop listing properties down south because I have not been able to find a representative capable of looking after our interests there. So we have taken all properties for Samui, Koh Phangan, Phuket, and Krabi off our books. The only properties I am keeping on are The Cove in Krabi, Koh Tao Island at Kapoe, and some land at Ranong.

We are, however, keeping the Chiang Mai (CM) properties. Interest is picking up and I think we will see some major growth up there over the next few years. If you are looking for somewhere a little different from the usual beaches or big city, Chiang Mai is a good choice.

The city fathers are currently reviewing plans to upgrade the public transport system. That will make a nice change. Chugging around in cramped utility trucks on hard bench seats with low roofs is not my idea of public transport. They are are planning to introduce a modern air-conditioned bus fleet, more bus routes, and comfortable bus shelters.

There is room for considerable growth in Chiang Mai too. Ex-PM Thaksin is from CM and while he was in power he authorized construction of 3 outer ring roads for the city. When they are finished, vast areas will open up and I foresee an influx of new residents. Property prices will rise fast when that happens. A savvy investor should be up there now buying up whatever you can.

Life in CM is more laid back, there is less pollution, and property prices are still very affordable. A typical 60 square meter home up there only costs somewhere between one to two million Baht. But there are a lot of upmarket villas for sale up there too. Check out ID's 111392, 111928, 111105, 111373, and 111606 for starters. By the way, 111606 is a real, very rare teak wood house. For the price, this is a great bargain.

We have two golf courses, several hotels, and a few resorts for sale in CM too. If you are looking for a retirement property that will give you a steady income, then one of the guesthouses we list would be an ideal investment.

If you don't know much about Chiang Mai yet, Google 'chiang mai' and read up. It's a fascinating place with lots of antique temples, an ancient city wall, a fascinating history, some great restaurants, and plenty of things to do.

Pai, a picturesque little town halfway to Mae Hong Sorn on the Burmese border is gaining popularity. Most of the people going there now are backpackers, but if you have an eye on the future go and buy some land there. If Pai follows in the footsteps of all the other popular backpacker destinations in the past it will soon start going upmarket. Land prices will rise, and a wise investor now will make a killing within a few short years.

Two married friends are out drinking one night, when one turns to the other and says, "You know, I don't know what else to do. Whenever I go home after we've been out drinking, I turn the headlights off before I get to the driveway, shut off the engine and coast into the garage. I take my shoes off before I go into the house, sneak up the stairs, get undressed in the bathroom, stick my foot in the toilet and pee down my leg to prevent splashing sounds. I ease into bed and my wife STILL Wakes Up, and yells at me for staying out so late!"

His friend looks at him and says "Well, you're obviously taking the wrong approach. I screech into the driveway, slam the door, storm up the steps, pee hard into the toilet water, then use the full flush, throw my shoes in the closet, undress in the bedroom, then jump into bed, slap her on the ass and say, "WHO'S HORNY????!!!" and she acts like she's sound asleep. Works Every Time!!!

Would you like to advertise with us? Contact me to discuss how. talkto@holt-realty.com

DISCLAIMER: All information and the opinions expressed in this newsletter have been researched as thoroughly as possible. However, the author is not responsible for any actions readers may take after reading this document. Please consult a qualified lawyer to ensure you get the best possible advice.

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