As we are all bored of hearing, the Chinese term for ‘crisis’ contains the symbols for ‘danger’ and ‘opportunity’ – and the current downturn has certainly created some openings in real estate.
Yet collecting a windfall in Thai property definitely requires more than keeping a straight face and making a low offer.
For a start, Thailand’s property sector is sailing fairly smoothly through the slowdown. Having never been a speculators’ market, prices have largely withstood the global economic storm.
‘Unlike a market like Dubai, purchasers never relied heavily on borrowing,’ says Cyrille Hareux of Company Vauban.
Nor are owners in a hurry to sell. Most are comfortably placed to ride out the downturn. Rather than take a hit on their property’s price, they will hang on for as long as it takes to see a profit.
‘The philosophy of Thai landowners is typically very long-term – which keeps the market stable,’ says Hareux.
Another restriction on bargain-hunting is supply.
‘In a market like Bangkok, the areas and buildings that appeal to foreigners are a tiny fraction of the city’s real estate,’ says Julien Guille of Company Vauban.
‘There are great properties but not enough of them for it to ever become a buyer’s market.’
Expats should therefore aim to shave – not to slash – rents and prices in Bangkok.
In addition, contrary to some perceptions of Southeast Asia, aggressive bargaining is not the Thai way.
‘Even in street markets, you should only expect a discount of more than 20%,’ says Guille’s colleague Sujin Vibulatd.
‘If you start off by demanding a 50% discount you will get a very negative reaction as it shows disrespect to the buyer, who may feel he is losing face,’ he says.
But thrifty buyers should not despair – hefty discounts are out there. Only, they may require shouldering an element of risk.
‘If you want the best bargain, you should consider buying off plan,’ says Hareux.
‘Developers who are getting projects off the ground are often willing to make very advantageous offers to their first customers.’
Yet Hareux gives a word of caution. The massive gains open to early buyers are reflect the risk that the developments may never materialise.
‘This is an area where I aim to give purchasers an edge in two ways. One is being an expert at negotiating. The other is knowing about the market and when a risk is worth taking,’ he says.