I’ve been wasting a lot of time for the last couple of weeks on Twitter watching all the tweets about the floods in Thailand as the water slowly creeps deeper into Bangkok. Twitter is very useful for this kind of event when people all around the region report and post photos as the disaster unfolds. You just need to manage your filters to eliminate the noise and trolls which are plentiful.
I’m not in Bangkok during all of this, although I still have a house there that has remained dry so far. I’m at my home in the Khao Yai area which is one of the places a lot of evacuees have fled to. It hasn’t been people’s first choice because the main road to get here was cut off by the flooding, requiring a lengthy detour and drive time of six hours or more when it normally takes two or so from Bangkok.
Something I’ve been wondering about is how this disaster will affect property markets in Thailand, and Khao Yai in particular. I’ve heard a couple of relatives already say they are going to sell their house/condo and get out of Bangkok after all this flooding is over. I’m thinking a lot of people have that idea now but most will forget about it after it’s all over and the rest won’t be able to get a decent price if their home was hit by the flood waters. It seems like property prices in Bangkok will be depressed as a result.
Pattaya was a major destination for people fleeing the Bangkok floods. News reports said it was jammed and many hotels were offering special deals. I wonder if any Bangkokians would be considering a getaway home in Pattaya as a result of the floods. Perhaps, but it seems like the effect on property prices there would be minimal as it is already so overbuilt and overpriced in response to targeting foreign buyers.
Living in Khao Yai I do like to see news on the local market but I don’t find much online about so when I saw this chart of Khao Yai land prices from early last year I thought it was interesting to note the apparent exponential rise that was occurring. When you start seeing graphs that look like that you wonder if a bubble might be forming. The question is whether there is some unsustainable factor that is driving up prices, like easy lending ala the sub-prime mortgage debacle in the U.S., or if there is some change in fundamentals that may be sustainable. I don’t see easy lending as a factor here because the banks are typically quite unwilling to loan money on empty land. The buyers tend to be people with money who pay cash. And there are a lot of people in Bangkok with money.
That chart is a year and a half old and I haven’t seen any updates to it so I’ve been wondering what the next data point will be and how the flood disaster may affect the shape of that curve. I think the site has a new data point that sets a new standard. It is mentioned in this post about Khao Yai Dreamland which immediately sold out 18 new plots at 3.6 million baht per rai. That’s interesting because it sets a new high for land prices in that area at the present time in the midst of the flood crisis. The question is, should this be considered one data point or 18? Because that is a bunch of plots that sold quickly at a new price point. Another question which I won’t be able to answer is what motivated those buyers – were they thinking the time had come for a safe place away from the giant flood plain known as greater Bangkok? There was some of that effect in past years when the riots hit Bangkok, and there are always people who discover Khao Yai for the first time and decide they need a vacation or retirement home here. So it will be interesting to see if there is increased buying demand in the area after this disaster.