Misinformation About Property Market In Bangkok

[sunshine13]

1. You cannot simply put 50K down on a property and wait to 'flip it'. You must put much more money into it than that, so the idea that at some point a large amount of people will be unable to either find a buyer or pay for it themselves is not true.

2. Take a look at skyscrappercity website and you will see just how fast condominiums in bangkok are getting sold out. Locations close to the BTS are very hard to come by.

3. Many of these locations are purchased to rent to farang. The price of rent will not be negotiable by very much. Thais would sooner sit on the property then lower the price substantially.

4. The Bangkok condo market is not built about farang. If you dont believe this go out and actually visit these new condominiums and find out the farang/thai ratio.

For instance, The Address Siam on Pet. Road is 80% thai. There are 230 units at around 6 million baht/unit. Or try Noble Remix, or try Fullerton, etc.

5. the best way to take advantage of a possible slack, would be too negotiate a very good long term rental. If the owner is asking 25K/mo, I would try and talk them down to 20k/mo on a 3 year lease. You might get someone to bite.

I have not studied the happenings in the farang ghettos of Patters and Phuket, so I have no idea what is going on there, but I imagine its much more risky.

[think_too_mut]

1. You cannot simply put 50K down on a property and wait to 'flip it'. You must put much more money into it than that, so the idea that at some point a large amount of people will be unable to either find a buyer or pay for it themselves is not true.

Why then all or most of the units go another selling run upon completion and long after that? The buildings even have an office, full time staff, many of them, assisting with the inquieries and sales. And everything was sold long ago, why do they have to do it twice? Who is paying that sales office and why as everuthing was sold?

2. Take a look at skyscrappercity website and you will see just how fast condominiums in bangkok are getting sold out. Locations close to the BTS are very hard to come by.

But for some reason the "owners" are not happy and want to resell them before even setting their foot inside "their" properties.

3. Many of these locations are purchased to rent to farang. The price of rent will not be negotiable by very much. Thais would sooner sit on the property then lower the price substantially.

Could be, that just adds to the number of unoccupied units.

4. The Bangkok condo market is not built about farang. If you dont believe this go out and actually visit these new condominiums and find out the farang/thai ratio.

For instance, The Address Siam on Pet. Road is 80% thai. There are 230 units at around 6 million baht/unit. Or try Noble Remix, or try Fullerton, etc.

Take out the farangs buy/rent and what is left? How many of any units, let alone high end, are built in Isaan or other backward places?

5. the best way to take advantage of a possible slack, would be too negotiate a very good long term rental. If the owner is asking 25K/mo, I would try and talk them down to 20k/mo on a 3 year lease. You might get someone to bite.

That kind of money in a dump called Bangkok? The least livable place on Earth.

I have not studied the happenings in the farang ghettos of Patters and Phuket, so I have no idea what is going on there, but I imagine its much more risky.

More risky in the resorts than in Bangkok? Possibly, the oversupply and prices there could be the reason. And, where are your Thais to lower the risk and buy in there?

[sunshine13]

"That kind of money in a dump called Bangkok? The least livable place on Earth."

Im happy I read this before I bothered to respond.

[think_too_mut]

"That kind of money in a dump called Bangkok? The least livable place on Earth."

Im happy I read this before I bothered to respond.

My pleasure. Glad we have found the least common denominator.

[Nawtilus]

Yes, Bangkok is the least livable city in the world.

I would prefer some Indian cities or even baghdad.....

[chownah]

I'm thinking that to have a developement that is not substantially sold out well before completion would mean a loss of face...and also a loss of the aura of desireability which could dampen sales.....do you think it is possible that the statistics on how many units have been sold could be either falsified or manipulated (every family memeber "buys" a unit) so as to either save face or enhance perceived desireability?

[bingobongo]

Slowing growth in housing loans foreseen: KRC

http://etna.mcot.net/query.php?nid=28699

[chownah]

I'm thinking that to have a developement that is not substantially sold out well before completion would mean a loss of face...and also a loss of the aura of desireability which could dampen sales.....do you think it is possible that the statistics on how many units have been sold could be either falsified or manipulated (every family memeber "buys" a unit) so as to either save face or enhance perceived desireability?

I'm replying to myself to bump this up and to ask this question again...do people think this happens or is happening?

[backflip]

I do not believe that is happening. A developer wants to sell units as quickly as possible, and for as much as possible. Purposely holding units off of the market would do the opposite. A couple years ago, several TV posters commented that they thought that developers were selling units their friends and relatives, and then allowing them to flip them at huge profits. Again, this scenario requires the developer to MINIMIZE his profts - not exactly the best business plan.

An earlier poster mentioned that an early seller flips a unit because the buyer is "unhappy with the unit". A buyer flips the unit to make money, not because he doesn't like the unit...he likes the money more than the unit...and there's nothing wrong with that.

[stoneman]

Sorry about the double post...

Edited April 4, 2007 by stoneman

[stoneman]

An earlier poster mentioned that an early seller flips a unit because the buyer is "unhappy with the unit". A buyer flips the unit to make money, not because he doesn't like the unit...he likes the money more than the unit...and there's nothing wrong with that.

Backflip...I have done some research and asking questions concerning the BKK condo market. Maybe I have been misinformed and maybe you are an expert in Thai condo law. If I bring in 3 million baht to buy a condo and after living in it for 3 years, I decide to "flip it" and sell it for 5 million baht, it is my understanding that I can only take the original 3 million baht out of the country..The 2 million profit must remain in Thailand. Is that the law as you understand it?

[backflip]

I'm not an expert in Thai real estate law, and my understanding is that you would pay tax on the 2M profit, and you can take the remainder of the 2M and the 3M out of the country. The percentage of the tax you pay depends upon how long you've owned the condo - the longer you own the unit, the lower the tax percentage.

When I referred to "flipping", I meant "to resell before moving in". Many investors - as compared to home buyers - will scoop up prime units without any desire to move in. As the building sells out, the investors will resell ("flip") the units to someone else. When the housing market in the US was red hot, investors would do this with both detached housing and condos. Some developments would hold a lottery for the units and, before the house was built, it would be resold. I've read that - and I've forgotten the name of the tower - a highrise in Dubai, to be completed in 2010, or so, has had some units flipped a dozen times.

Although some of the housing will support the higher prices over the long-term, others do not. We've all read about IPO issues doubling in the first day or trading...and then sink (slowly, or not) to the original - or lower - issue price. The latest Raimon Land condo report that, with all of the situations on Thailand, the average selling price per sq meter increase 5% last year - not too bad. The increase wasn't nearly as good as real estate in the SF bay area, but substantially better than many TVers 20% price "crash" predicted (and hoped for).

The Raimon Land report, and others, indicate that there is an 80% apartment occupancy rate, and 80% of the built condos (over 2M THB) have been sold. Is that good news, or bad? Some people believe that indicates that the BKK real estate market is good, and others believe it shows that the market is in the process of crashing.

Edited April 4, 2007 by backflip