Bangkok Rental Market Collapse?

[Lazy Sod]

I've been renting out my Grade A 1 bed condo in the Emporium area for the last 5 years no problem, always found a new tenant very easily (normally Japanese). The strange thing is that the last tenant left 6 months ago and there are no new inquiries. I advertised using the previous channels (agents, prakard, ddproperty) but it's very quiet. We were getting a few calls a month in previous years so the contrast is stark. Fortunately I don't need the income and there is significant capital appreciation already, so I'm not too bothered about it, but I'm curious if anybody knows the reason why. I'm thinking it may be partly due to the massive Park 24 complex which has 3-4 towers with something like a 1,000 rooms coming onto the market recently, and I noticed a billboard from them offering buyers a "guaranteed yield" which means they will desperately need tenants to finance this offer.

Any thoughts from more knowledgeable people than me would be appreciated.

[KhaoYai]

I'm not 'knowledgeable' regarding the current Bangkok property market but I do have experience of the property market in general. Sorry, I can't give you any good news but I think you are lucky that as you say you, "don't need the income". If what I read elsewhere about the overall Bangkok condo market is correct, then the capital appreciation you are relying on is more 'perceived' than real.  Condos are continuing to be built at quite some rate and if they are not selling (or renting) - eventually that market will collapse.

 

I've seen this before in the UK - 15 years ago the trend in Leeds for example, was to build more and more city centre appartments - all sorts of trendy buildings were going up. All the 'experts' were calling it the new 'renaissance' in city living. I remember thinking at the time that the market was becoming saturated.

 

3 years later they were still 'talking the market up' but in reality sales were just not happening. The market finally began to 'crash' just before the world-wide recession started to take hold and that was the 'experts' said, the reason for the crash. By 2009, appartments that had previously been marketed for £120,000 were being sold at auction for as little as £45,000.

 

The recession certainly had a huge impact on the whole UK property market but it concealed the real reason for the crash in appartment sales across UK cities. Yes, there was a sector of the market that wanted trendy 'loft style' and waterside properties but every market has its limit. Over-supply was the real cause and I believe the appartment sector would have crashed in any case, without the receession. It seems ridiculous to continue building properties when there are simply no customers for them but it often happens.

 

I haven't studied the market in Bangkok for many years but just an overview tells you that condo building continues at a massive rate.  I've seen one or two of the larger developments still having unsold units 2 - 3 years after completion and that can't be a good sign. Over-supply can happen anywhere and I'd suggest its already happening in Bangkok. Yes, some of the 'flagship' developments continue to sell but common sense surely dictates that the current level of development is not sustainable? It would take a much smarter man than me to predict a 'full on' property market crash in Bangkok but I would certainly not wish to invest in condos there at the moment unless I was in for the long term and even then, I'd be cautious.

 

However, its not all 'doom and gloom' - just hang in there. Quite often in a depressed property sales market - bizarrely, the rental market strengthens. The rental sector in the UK began to pick up around a year into the recession and by the end of it, was very healthy indeed.

 

 

[baansgr]

I hate to say it but the property market in Pattaya is dead with a capitol D. Would assume its the same throughout Thailand.

[sfokevin]

If I were you I’d put your “capital appreciation”... In the banks...

Put it up for sale... The Chinese are supposed gobbling up condos now... And they are perfectly happy to let them sit empty which seems to be the new norm...

[Peterw42]

3 minutes ago, baansgr said:

I hate to say it but the property market in Pattaya is dead with a capitol D. Would assume its the same throughout Thailand.

What are you basing your opinion on, there isn't much data out there unless you work in the land office. Often the only 2 people who know about a sale are the buyer and the seller. Developers dont usually disclose how much they sell or dont sell.

My wife does some work for a couple of girls that sell real estate and they are doing just fine at the moment, they sell 2-3 properties a month, the sellers are at least getting their money back or sometimes turning a profit. Lots of condo blocks where the foreign quota is full.

 

 

 

[luckyluke]

Rented occasionally a Condo in Thonglor via AirBnB.

 

I now rent the same Condo at the same conditions (All in) at 10000 Thb monthly cheaper, directly to the owner. 

 

One year contract, one month guarantee. 

[Lazy Sod]

Thanks for the responses to date, but I'm particularly interested in the central bangkok area, Sukhumvit - Thonglor to Asok.

[AtoZ]

On 5/3/2019 at 3:50 PM, KhaoYai said:

I've seen one or two of the larger developments still having unsold units 2 - 3 years after completion and that can't be a good sign.

I know one high end condo on Sukhumvit 15 that has unsold units 6 years after completion.

[madmen]

Only on TV can one persons unrented condo trigger a rental market collapse throughout Bangkok. I would be embarrassed to even think about creating a thread about it.

[Lazy Sod]

2 hours ago, madmen said:

Only on TV can one persons unrented condo trigger a rental market collapse throughout Bangkok. I would be embarrassed to even think about creating a thread about it.

Good point...and I created it. Perhaps the word "collapse" was a bit OTT. But do you have anything helpful to add to the discussion. If not please spend your valuable time on some other thread.

[toenail]

Part of the problem is the 49% ownership by foreigners and the other 51% by Thais only. Wealthy Thais do buy these new condos as an “investment” but there are more for sale than local buyers. In some ways, it is renters’ market if they take the time to look around -


Sent from my iPhone using Thaivisa Connect

[Nyezhov]

If ya want to rent cheap let me know. Im not really into the area but $$ is $$. Im an excellent tenant despite the blatant signs of a complete and utter breakdown from the norms and values of the human race that I exhibit from time to time.....

[madmen]

12 hours ago, Lazy Sod said:

Good point...and I created it. Perhaps the word "collapse" was a bit OTT. But do you have anything helpful to add to the discussion. If not please spend your valuable time on some other thread.

A bit OTT? you must be kidding its idiotic!!!

[baansgr]

23 hours ago, Peterw42 said:

What are you basing your opinion on, there isn't much data out there unless you work in the land office. Often the only 2 people who know about a sale are the buyer and the seller. Developers dont usually disclose how much they sell or dont sell.

My wife does some work for a couple of girls that sell real estate and they are doing just fine at the moment, they sell 2-3 properties a month, the sellers are at least getting their money back or sometimes turning a profit. Lots of condo blocks where the foreign quota is full.

 

 

 

Im pleased you asked that question and mentioned the land office. When the neysayers and doomongers said look at the lights on in condos, I would always say go to any land office and you will see how busy it is so properties must be selling. However a recent transaction I did at Pattaya land office, I was shocked, myself and one other buyer/seller was all there was that morning...that is a real true reflection of the market in Pattaya.

[Peterw42]

38 minutes ago, baansgr said:

Im pleased you asked that question and mentioned the land office. When the neysayers and doomongers said look at the lights on in condos, I would always say go to any land office and you will see how busy it is so properties must be selling. However a recent transaction I did at Pattaya land office, I was shocked, myself and one other buyer/seller was all there was that morning...that is a real true reflection of the market in Pattaya.

Thanks for the reply, I would also consider the land office, busy/not busy, as being a pretty good market indicator.  In the absence of any other Data, maybe the only indicator.

Drives me nuts when people quote " a guy in a bar told me, no lights on," etc. 

Or my favorite, the empty condos indicator, whatever that means and how would you know.

There are 3 empty condos up the hall from me, empty since they were purchased 5 years ago, a little old Thai lady owns them to give to the grandchildren one day, no lights on ever, she doesnt want any rent as that means already lived in, possibility of ghosts etc. I'm sure there is someone sitting on a bar stool somewhere quoting the empty condos next door. 

 

[Lazy Sod]

1 hour ago, madmen said:

A bit OTT? you must be kidding its idiotic!!!

Fair enough. Just for you, let's change the question from "collapse" to "downturn". Hopefully this satisfies you. Kindly now leave thIs thread so that we can have a civilized and insightful discussion based on our actual experience.

[ThomasThBKK]

On 5/4/2019 at 10:01 AM, Lazy Sod said:

Thanks for the responses to date, but I'm particularly interested in the central bangkok area, Sukhumvit - Thonglor to Asok.

i live next to emporium, my landlord actually asked me if i want to BUY the condo, he has many condos from what i know so he might think that it will be hard to rent out too....

 

Look at all the new fancy totally overpriced buildings there.

The Marque, Vittorio, Sansiri 39, The Diplomat etc. All of them totally empty and still have the brown paper on the glas. - and that's all within 50 metres in Soi 39.

[Baerboxer]

It's good that you don't need or rely on the income.

 

But be careful with that 'capital appreciation". As with all financial assets, until you realize it, the value is theoretical. If you don't get buyers willing to pay the price you think it's worth, it ain't worth that price!

 

Hope all goes well. Might just be a temporary blip. But I see new condo projects all over the city.

[Nip]

On 5/4/2019 at 3:43 AM, Peterw42 said:

What are you basing your opinion on, there isn't much data out there unless you work in the land office. Often the only 2 people who know about a sale are the buyer and the seller. Developers dont usually disclose how much they sell or dont sell.

My wife does some work for a couple of girls that sell real estate and they are doing just fine at the moment, they sell 2-3 properties a month, the sellers are at least getting their money back or sometimes turning a profit. Lots of condo blocks where the foreign quota is full.

 

 

 

In most things in life there is the rule of logic. Chelsea supporters when asked who their best player is will say Eden Hazard. And that begs the question. Why don't you play him? Now for me with regards to condos in Bangkok my rule of thumb is. Find a condo block in Bangkok call ask how many floors and rooms. Go stand outside of it at 9pm and see how many lights are on. I have stayed in four condo buildings in Bangkok over 3 years my daughter another three each with plus 24 floors and I would estimate they are no more than 25% occupied. That tells me all i need to know. 

[Destiny1990]

Overdevelopment and complicated visa extensions for foreigners will certainly not make it easier finding long term tenants.

So harder to rent out means also harder to sell for developers so I don’t see any winners here. How about trying monthly bookings by an agent and or Airbnb it?

[exemplary21]

On 5/4/2019 at 9:43 AM, Peterw42 said:

What are you basing your opinion on, there isn't much data out there unless you work in the land office. Often the only 2 people who know about a sale are the buyer and the seller. Developers dont usually disclose how much they sell or dont sell.

 

 

 

If they're listed on the SET then they do. Good data on the state of the housing market can be found in stockbroker research on the major listed developers such as Supalai, Land and Houses, Ananda, etc

[seancbk]

On 5/4/2019 at 9:43 AM, Peterw42 said:

What are you basing your opinion on, there isn't much data out there unless you work in the land office. Often the only 2 people who know about a sale are the buyer and the seller. Developers dont usually disclose how much they sell or dont sell.

My wife does some work for a couple of girls that sell real estate and they are doing just fine at the moment, they sell 2-3 properties a month, the sellers are at least getting their money back or sometimes turning a profit. Lots of condo blocks where the foreign quota is full.

 

 

 

 

You should know by now not to let knowledge of actual facts get in the way of what someone heard on a barstool.

[3421abc]

I could only hope the market here would collapse and would put pressure on the thais to open up to foreign ownership more.

I would suggest you advertise on hipflat, juristic office in your building and other website that are more geared to the Japanese expats in Thailand. Also find a realtor that works w Japanese or even a Japanese realty.

The emporium area is a very nice area. I was looking for condos for rent in that area and ended up renting a 2 bedroom for much less in Phra Khanong.

Best of luck renting your unit.

 

[seancbk]

1 hour ago, Nip said:

In most things in life there is the rule of logic. Chelsea supporters when asked who their best player is will say Eden Hazard. And that begs the question. Why don't you play him? Now for me with regards to condos in Bangkok my rule of thumb is. Find a condo block in Bangkok call ask how many floors and rooms. Go stand outside of it at 9pm and see how many lights are on. I have stayed in four condo buildings in Bangkok over 3 years my daughter another three each with plus 24 floors and I would estimate they are no more than 25% occupied. That tells me all i need to know. 

 

Tell you nothing except that some units are not being lived in.   

 

[ChipButty]

37 minutes ago, Destiny1990 said:

Overdevelopment and complicated visa extensions for foreigners will certainly not make it easier finding long term tenants.

So harder to rent out means also harder to sell for developers so I don’t see any winners here. How about trying monthly bookings by an agent and or Airbnb it?

Dont mention Airbnb on here

[Peterw42]

1 hour ago, Nip said:

In most things in life there is the rule of logic. Chelsea supporters when asked who their best player is will say Eden Hazard. And that begs the question. Why don't you play him? Now for me with regards to condos in Bangkok my rule of thumb is. Find a condo block in Bangkok call ask how many floors and rooms. Go stand outside of it at 9pm and see how many lights are on. I have stayed in four condo buildings in Bangkok over 3 years my daughter another three each with plus 24 floors and I would estimate they are no more than 25% occupied. That tells me all i need to know. 

Did you see my post No15 about a little old thai lady in my block that owns condos and leave them empty.

There are lots of reasons condos can be empty/unoccupied. They can be someones holiday house, company owned for visiting executives etc.

 

Thai people have different ideas about investments, they are happy to hold Gold which gives no return while you hold it, they look at property the same way, they buy property just to hold it, empty, with no return.

Add to that the whole Thai superstition and not buying second hand because of ghosts of previous occupants etc. It a very real thing, they will only buy new or never occupied properties, an empty property is worth more to them than the rent they may get. The spirit houses in every front yard and condo block are not there for fun.

 

I have a friend in Pattaya who is on the committee of a huge condo block (1500 units), the block is 20 years old and there are condos in this block that are owned but have never been occupied for 20 years, Thai people own 5 in a row. The condo office went through a process of chasing these people up, for fees ,maintenance issues or to see if they are still alive, want to rent/sell. They would track these people down, it would be a well off Thai person/family happy to leave them un-occupied. Just a passive investment.

 

 

[Hindy]

 I can’t wait for 2 things,

Brexit and the pound to strengthen

and the market to collapse in Pattaya.

Condos are being built all over the place, it is

just a matter of time before another Dubai happens.

[balo]

If this is one of the very expensive condos to rent , 30k+ , I can understand it's a limited market now.  
I would try to contact the best agents in Bangkok and give them a nice commision, you need to use all the tricks in the books to find a new tenant. 

 

[PerkinsCuthbert]

I would rank it thus, in order of knowledge of the Bangkok property market, from best to worst; others may differ:

 

1. Professional developers

2. Analysts of publicly-listed developers

3. Investors in said developments

4. Amateur buyers and sellers of property

5. Amateur followers of the market with some financial knowledge

6. Amateur followers of the market with little knowledge beyond anecdotal stories

7. Soi 6 Pattaya analysts and their ilk, with a strongly negative opinion on anything Thailand-related

[Caine]

On 5/3/2019 at 9:50 AM, KhaoYai said:

I'm not 'knowledgeable' regarding the current Bangkok property market but I do have experience of the property market in general. Sorry, I can't give you any good news but I think you are lucky that as you say you, "don't need the income". If what I read elsewhere about the overall Bangkok condo market is correct, then the capital appreciation you are relying on is more 'perceived' than real.  Condos are continuing to be built at quite some rate and if they are not selling (or renting) - eventually that market will collapse.

 

I've seen this before in the UK - 15 years ago the trend in Leeds for example, was to build more and more city centre appartments - all sorts of trendy buildings were going up. All the 'experts' were calling it the new 'renaissance' in city living. I remember thinking at the time that the market was becoming saturated.

 

3 years later they were still 'talking the market up' but in reality sales were just not happening. The market finally began to 'crash' just before the world-wide recession started to take hold and that was the 'experts' said, the reason for the crash. By 2009, appartments that had previously been marketed for £120,000 were being sold at auction for as little as £45,000.

 

The recession certainly had a huge impact on the whole UK property market but it concealed the real reason for the crash in appartment sales across UK cities. Yes, there was a sector of the market that wanted trendy 'loft style' and waterside properties but every market has its limit. Over-supply was the real cause and I believe the appartment sector would have crashed in any case, without the receession. It seems ridiculous to continue building properties when there are simply no customers for them but it often happens.

 

I haven't studied the market in Bangkok for many years but just an overview tells you that condo building continues at a massive rate.  I've seen one or two of the larger developments still having unsold units 2 - 3 years after completion and that can't be a good sign. Over-supply can happen anywhere and I'd suggest its already happening in Bangkok. Yes, some of the 'flagship' developments continue to sell but common sense surely dictates that the current level of development is not sustainable? It would take a much smarter man than me to predict a 'full on' property market crash in Bangkok but I would certainly not wish to invest in condos there at the moment unless I was in for the long term and even then, I'd be cautious.

 

However, its not all 'doom and gloom' - just hang in there. Quite often in a depressed property sales market - bizarrely, the rental market strengthens. The rental sector in the UK began to pick up around a year into the recession and by the end of it, was very healthy indeed.

 

 

45,000 to live in Leeds very over priced.