When I first visited Khon Kaen, Thailand, three years ago, there were signs on every telephone and light pole advertising houses for sale in the 800,000 to 1,000,000 baht range.
Now that I live in Khon Kaen, I have seen fewer and fewer of these signs – until recently.
More and more large billboards, along with the light pole ads have been springing up and more and more housing developments being built.
Chatpetch Garden Ville II Khon Kaen
My wife and I looked at some of the advertised houses back in 2008 and most were in gated communities with the sleeping guard at the gate and looked like rows and rows of boxes reminiscent of Pete Seeger’s “Little Boxes”. In most locations, the advertised price was just an enticement and was for the smallest box available.
We decided after looking at about 10 of these places, that we would get our own chunk of land in Khon Kaen and hire someone to build a house that we designed.
That is what we are doing now.
It is now the end of 2010 and I see more billboards sprouting up and the prices listed have quintupled since 1998. Granted, the houses may be bigger, but I don’t see how they can sell all of these places. They are not marketing to foreigners – they are building these primarily for the local Thais – and at prices starting at over 5 million baht (or about $175,000) – and that is for the small place in the community.
Khon Kaen 5.57 Million Baht House
We bought 1 rai of land – about 1,610 square meters of land for 1.3 million baht and our house will cost approximately 1.2 million baht to build. Toss in some additional costs like water and electricity, soil and bribes to local government officials, and we will wind up getting our 3-bedroom house for roughly $100,000. We will also have a good size yard and a house designed the way we want it.
Yes, we have had to deal with registering the land purchase, getting blueprints drawn up and approved, dealing with the water and electric company, and getting soil spread on the land. And, we will not be able to move in until January or February of 2011 – about 6-7 months after we started this journey. But, I feel it is a worthwhile trade-off for a ready-made house that was designed by someone else and is spitting distance to your next door neighbor.
What surprises me is that there is a flourishing housing market in Khon Kaen – especially when the rest of the world is in economic crisis. Prices are determined by plucking a number out of the air. There is no real comparison system here like in the US (zillow.com) where one can compare similar houses in same neighborhood. When my wife was looking for a hunk of land to buy she would see the same size lots on the same street and the prices would range from 1 million baht to 10 million baht and they were right next to each other. No rhyme or reason for pricing other than trying to get as much as possible.
Khon Kaen Residence of Wealth
Now, I am not sure if all the billboards and signs along the road are an indication that the Khon Kaen housing market is booming or if it is just the opposite – nothing is selling so lets promote the heck out of it. Thai economics continues to baffle me. What I do know is that there are a lot of properties for sale, at high prices, and more and more are being built all over Khon Kaen.
Time will tell if this real growth or a bubble about to burst.
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