This year records highest number of new condo projects in two decades

[webfact]

This year records highest number of new condo projects in two decades

By Thai PBS

 

 

More than 268 condominium projects were launched, built or completed this year – the highest number within a year for the past 23 years, according to a survey of condominium market by the Agency for Real Estate Affairs.

 

Of the 268 new condominium projects, there are altogether 117,250 units, 91 percent of which have been sold or 107,096 units. Sixty-one percent of them, or 71,864 units, were occupied.

 

The aforementioned figures of condominium units sold and occupied is an indicative that there is no over-surplus of condominium although there is still speculation in condominium units, but the scale is small.

 

Full story: http://englishnews.thaipbs.or.th/year-records-highest-number-new-condo-projects-two-decades/

 

-- © Copyright Thai PBS 2017-11-15

[isaanbanhou]

And next year a record number of foreclosures!!!

 

 

household-debt-thailand.svg

[mok199]

asinine building and development...the main reason Thailand is in the tank today....

[observer90210]

At this rate, at one point prices will crash on both sides....sale value and rents. Some will loose, some will benefit.

[Bob12345]

It might lead to a bubble in 1-2 years?

 

I think the bubble is unevitable. 91% sold and only 61% occupied would really worry me as a government and as a developer.

 

With the economy slowing down (less growth) and household debts at new heights it is gonna take a long term before units can be sold with a profit. Thais rather sit on it then sell with a loss (time value of money is a foreign concept) so expect little domestic demand to stimulate the economy coming years.

 

The bubble will not burst like it did in the US, but it will deflate slowly with consumers just waiting and waiting for prices to go up while the government keeps trying to get them spending.

Edited November 14, 2017 by Bob12345

[wakeupplease]

What the hell it looks good why worry about the fall until the fall comes knocking and then those investors who where conned from outside the borders pay, so we are laughing with their money in our hands. That's how some think.

[nausea]

59 minutes ago, Bob12345 said:

91% sold and only 61% occupied would really worry me as a government and as a developer.

I thought the same, which is why the writers comments on these figures seemed a bit strange:

2 hours ago, webfact said:

The aforementioned figures of condominium units sold and occupied is an indicative that there is no over-surplus of condominium

Thai logic I suppose - more are occupied than aren't. 

[RichardColeman]

Anyone who has lived in Thailand for a while knows Thais can't help themselves when it comes to building things , just carry on regardless of any financial input- like NO buyers and millions of empty condos. 

[jacko45k]

Ah, time for a pro condo advert is it.

Surprising statistics and I would like to know where these projects actually are.

I can believe Bangkok condos doing OK, but here in Pattaya we have a glut and I would expect building to slow.

[RichardColeman]

Actually I think that the PM has a cunning plan to resettle all Thais at the foreigner expense. Let them build, let foreigners buy them (to pay for the building) , then when not occupied for 6 month every year under a new law, to be taken by the government to house Thais - like bank accounts. It will come - just wait.

[Bill Miller]

3 minutes ago, jacko45k said:

Ah, time for a pro condo advert is it.

Surprising statistics and I would like to know where these projects actually are.

I can believe Bangkok condos doing OK, but here in Pattaya we have a glut and I would expect building to slow.

Yes. Where I rent  20 km south of Pattaya I am pretty sure occupancy is under 50%, yet I have a great view of several new units going up.

I understand my land lady wants to know if I would like to buy this unit. It would have to be under a million to even consider as Thai people do not seem to be big on maintainance. How do all these paint stores stay in business, because I see no evidence of the products in use?

[kaorop]

Well idk about condos but the amount of shop houses being built is staggering. Things is many sit unoccupied or un sold for a long time..How they, who ever 'they' are can have so much $ tied up in unproductive assets I'll never know..And how much is it banks money or private...It does fuel the concrete, tiles, windows and utilities industries..oh an Cambo/Burmese labor agencies.

[jacko45k]

8 minutes ago, Bill Miller said:

Yes. Where I rent  20 km south of Pattaya I am pretty sure occupancy is under 50%, yet I have a great view of several new units going up.

I understand my land lady wants to know if I would like to buy this unit. It would have to be under a million to even consider as Thai people do not seem to be big on maintainance. How do all these paint stores stay in business, because I see no evidence of the products in use?

Well if your landlady is Thai and it is under Thai ownership I guess that would not be attractive.

The paint gets used on bars and restaurants in town that change hands on a regular basis.  A cycle of invest, gut, renovate, open for business, run out of money, fail.....

 

Never really considered building as far South as you, but of course with access to the coast it must be regarded as 'prime'...

 

 

[mikebell]

It's all about 'face' not finance. I live on a moobaan of 62 houses costing about 4 million apiece.  Some are for rent & there are no end of enquiries but the owners are intransigent - they set their mind's eye on 25-30 K per month and refuse anything lower.  One house has a rent of 15,000 - it has never been empty in the ten years I have lived here.

[manhood]

I would never invest 1 bath into a property in Thailand.....As a foreigner you only can loose!!!!!!!!

[yellowboat]

2 hours ago, Bob12345 said:

It might lead to a bubble in 1-2 years?

 

I think the bubble is unevitable. 91% sold and only 61% occupied would really worry me as a government and as a developer.

 

With the economy slowing down (less growth) and household debts at new heights it is gonna take a long term before units can be sold with a profit. Thais rather sit on it then sell with a loss (time value of money is a foreign concept) so expect little domestic demand to stimulate the economy coming years.

 

The bubble will not burst like it did in the US, but it will deflate slowly with consumers just waiting and waiting for prices to go up while the government keeps trying to get them spending.

That really all they know how to do in Thailand, build condos.  You just cannot give the rich money.  They have to earn it somehow. 

[coulson]

Thai property market does not make sense.

[Thakkar]

3 hours ago, webfact said:

The aforementioned figures of condominium units sold and occupied is an indicative that there is no over-surplus

 

Another way to look at the same numbers: almost 40% of all units built THIS YEAR ALONE are unoccupied and therefore available to dump on the market at the drop of a dime. Whether this is a Damocles Sword hanging over the market depends on how many of the sold units were bought on credit by entities that are easily spooked or that circumstances can easily tip into not being able to meet payments.

 

The other consideration is how flush the banks are and whether, if their borrowers are unable to pay, they would decide to hold on to those properties rather than dump them on the market.

[Thakkar]

1 hour ago, kaorop said:

Well idk about condos but the amount of shop houses being built is staggering. Things is many sit unoccupied or un sold for a long time..How they, who ever 'they' are can have so much $ tied up in unproductive assets I'll never know..And how much is it banks money or private...It does fuel the concrete, tiles, windows and utilities industries..oh an Cambo/Burmese labor agencies.

In every property market, there is an element of money laundering. Cash from corruption, tax evasion and illegal business like drugs, prostitution and gambling has to go somewhere. Even without the corrupt money coming from China and other places, there is plenty of cash right here that needs cleaning and parking.

 

The market is too opaque and there is too much misinformation out there to know what is really going on.

[edwinchester]

Difficult to understand the Thai property market.....or at least it is for me. Endless projects and most seem to be standing empty or very limited occupancy for years on end.

[kotsak]

2 hours ago, mikebell said:

It's all about 'face' not finance. I live on a moobaan of 62 houses costing about 4 million apiece.  Some are for rent & there are no end of enquiries but the owners are intransigent - they set their mind's eye on 25-30 K per month and refuse anything lower.  One house has a rent of 15,000 - it has never been empty in the ten years I have lived here.

Seems for most of the people here 100% of nothing is better than 1% of something 

[kotsak]

22 minutes ago, edwinchester said:

Difficult to understand the Thai property market.....or at least it is for me. Endless projects and most seem to be standing empty or very limited occupancy for years on end.

It's simple, there is too much "dirty" money floating around that need to be parked somewhere.

[steven100]

Just goes to show .... the Thai economy is ticking over ...   and all this goes against what the nayers say about Khun Prayuth & the Junta.

 

 

[Golden Triangle]

Every 90 days as I make my way to Jomtien immigration it never ceases to amaze me as to how many already built but empty high rise condos there are and a slew of new constructions in progress, where are the buyers ? There will be tears before bedtime I think as the market crashes. 

[nasanews]

6 hours ago, webfact said:

Of the 268 new condominium projects, there are altogether 117,250 units, 91 percent of which have been sold or 107,096 units. Sixty-one percent of them, or 71,864 units, were occupied.

If 91 percent have been sold that is good news for Thailand condo business market.

[pieeyed]

Just a good way for many people to launder dirty money. No way there is 91% sold.

[newnative]

2 hours ago, jacko45k said:

Ah, time for a pro condo advert is it.

Surprising statistics and I would like to know where these projects actually are.

I can believe Bangkok condos doing OK, but here in Pattaya we have a glut and I would expect building to slow.

      Yes, we always hear that there is a glut of condos on the market in Pattaya, and perhaps that's true.  But, I can tell you as someone out looking for a condo that there is not a glut of condos available for picky buyers.  And, EVERYONE should be a picky buyer.  My 'picky buyer' needs (which may vary from yours) are:  2 bedroom/2 bath, nice-size balcony, ocean view, foreign name, air-conditioned gym, large swimming pool, garage parking, and short walking distance to a baht taxi line. 

       Doesn't seem like I am asking too much but right off the bat we have to eliminate everything right along Wongamat Beach.  Ditto for Cosy Beach and some parts of Pratamnak--too far from a baht taxi line.  Most of the View Talays are out--no air-conditioned gyms.  Most of the low-rise 'theme park' condos are also out--no or poor ocean views.  So scratch off at least a dozen projects, including Venetian, Seven Seas, Atlantis, Espana, Maldives, etc., etc., etc.   And, all the other many condo projects with no ocean views.

       Grand Caribbean looks nice but no garage parking.  Centric Sea checks off most of the boxes but the balconies are too narrow for my needs.  The Base has many of my wants but from what I hear is out of control with daily renters--not somewhere I would like to live as a full-time resident.  Sometimes even when a project seemingly would work,  there may be drawbacks that rule it out.  And, so it goes. You weed out what doesn't suit.

      And, as you see, you may start with a 'glut' but end up with not that many viable choices.  Some will say, 'Oh, you're being too picky!'.  But, as I said at the start, you should be picky, too.   In the end you may need to compromise on some of your wants but it's good to have them as a starting point.

 

[Bob12345]

2 hours ago, steven100 said:

Just goes to show .... the Thai economy is ticking over ...   and all this goes against what the nayers say about Khun Prayuth & the Junta.

 

 

Hope you dont mind i follow the lead of many by blocking you because your post are always the same: you praise prayut but never give an argument, add something interesting, or react on the content.

 

Have a good day.

[sanuk711]

7 hours ago, Bob12345 said:

I think the bubble is unevitable. 91% sold and only 61% occupied would really worry me as a government and as a developer

Why is it a problem Bob?....they have been sold...Paid for by people who can afford to buy them and not live there..., Paid for by people who do not have to take out bank loans or are forced to sell them.......What's the problem.

.

They dont view this as a problem in some of the hottest markets around the world...in fact a large hedge fund in New York-is channelling its money into real estate that it leaves empty. Why do you view it as a problem in BKK ?

New York Number of empty New York City apartments continues to rise--One third of the most expensive apartments in New York City are empty for at least 10 months of the year, according to a recent report by the US Census Bureau

London The number of long-term vacant homes in Kensington and Chelsea has risen by nearly 25% in a decade

 

 

 

[Bob12345]

1 hour ago, sanuk711 said:

Why do you view it as a problem in BKK ?

Fair question.

 

The market in Thailand is different from western markets in that foreigners tend to pay a premium on characteristic old houses. My parents live in a beautiful house of more than 100 years old and there is great demand for the sort of houses as they are well-build, well-maintained, and their surroundings are protected by laws and regulations. It would be a good bet to say that their house will be worth more a decade from now than it is worth today.

 

Now look at the Thai market. Besides from some temples and palaces nothing is even near 100 years old here. Quality is often not that good, but maintenance is even worse. Add to that that most Thais prefer new units over "second-hand" ones and you can be pretty sure the value is not as likely to increase as in western countries. Besides, good chance that your valuable parkview (or seaview) soon becomes a view on the tower build right on your doorstep that now offers a view on the park ( or the sea).

 

Add to that that we are talking about condos. Every owner pays a monthly fee to help maintain the building, the elevators, and the common areas. By itself not a problem when people happily live in their unit, but many buyers are investors who hope to make quick profits and they won't have a taste to shell out much for maintenance.

 

A few years from now these condo's will look like shit and demand will fade away as newer and better condo's are build all around. The owners will not sell with a loss but will stop paying maintenance fees and will rent it out to whoever offers some quick cash.

 

So there is nothing wrong with rich people buying condo's and not living in them, but i know plenty of condo buyers who are not rich and who hoped on quick profits by buying a unit before the building is done. If occupancy is low it normally indicates people are speculating to make quick profit and they are not buying for the long term and for living there.

 

Edit: this would worry me as a government because when prices stall or drop there will be a lot of people with money tied up in condo's they don't use meaning they have less money to spend.

 

As a developer i would ask myself how many more there still are who are willing to buy my new condo projects when there are tons of unused condo's already. If they just wanted a second home then how likely is it they also want a third? And if they are speculators they might start dumping their units around the time i open the pre-sale of my new project.

Edited November 15, 2017 by Bob12345