Condominium Business Records Highest Growth In Real Estate Market

[Jai Dee]

Condominium business records highest growth in real estate market

Thai Appraisal Foundation indicates Condominium business has the highest figure growth in real estate market in the first quarter of this year. Meanwhile, the government’s economic stimulation measures do not affect property growth.

President of Thai Appraisal Foundation Sophon Pornchokchai (โสภณ พรโชคชัย) refers to the growth of real estate business in the first three month of this year. He says there are new 82 projects; however, the number decreases when compared with the same period of the previous year, which have 98 projects. On the contrary, 11,184 units of condominiums have been constructs; the number is higher. The price of condominiums that people have shown much interest is at 1-3 million baht, a drop from 3-5 million baht.

As for the government’s economic stimulation policies, including the reduction of interest rate, Mr. Sophon says the policies do not have much effect on this business.

However, President of Thai Appraisal Foundation says real estate market might face a slowdown in this year due to political matters and social affairs. He remarks prices will play a key role in this business during this moment.

Source: Thai National News Bureau Public Relations Department - 19 April 2007

[Boater]

Hmmm, this conflicts slighlty with what was in todays BKK Post

PROPERTY / SERVICED APARTMENTS

Ownership laws, oversupply hurt developers

KANANA KATHARANGSIPORN

The Bangkok serviced apartment market would improve if the Foreign Business Act was changed, says Phanom Kanjanadhtheimthao, managing director of the local property consulting firm Knight Frank Chartered (Thailand).

He cited legal uncertainties and oversupply as challenges. ''If the politics and the legal changes are clear, foreign investor confidence will increase.''

The average occupancy rate of five-star serviced apartments in Sukhumvit dropped from 95% in 2005 to 81% in 2006 due to legal and political changes since last September.

This year and next, 10 new serviced apartment buildings will be completed. They are Chulalongkorn University's Chamchuree Square with 120 units, Metrostar's Sathorn Grand Mansion (100 units), Oakwood Asoke-Ratchada (220), and Citadines Bangkok Sukhumvit Lake (79 units).

There will also be Fraser Suites Sathorn with 150 units, Somerset Grand Sukhumvit (265), Citadines Bangkok Sukhumvit Green (130), Citadines Bangkok Boulevard (128), Citadines Bangkok Sukhumvit Asoke (143) and Siam Paragon with 150 units.

This increase would up the total supply of serviced apartments by 6.1% to 11,581 units in 2007 and by 7% to 12,397 units in 2008.

At the end of 2006, Bangkok had 10,912 serviced apartment units in 84 projects, up by 2.9% from 2005. Market supply was dominated by four-star developments with a share of 42.8%, while five-star units represented 24.3%.

The Sukhumvit area remained the most popular location with 4,601 units, accounting for 42.2% of total market, followed by the central business district with 3,505 units or 32.1%. Supply in the Sukhumvit area rose by 32.2% per year while in the central business district it increased by 22.5%.

Completed projects last year included the Sofitel Sukhumvit Soi 6 with 76 units, Sofitel Asoke on Sukhumvit 19 with 46 units and Hopeland on Sukhumvit 24 with 187 units.

[cclub75]

Hmmm, this conflicts slighlty with what was in todays BKK Post

Not really.

Read again the paper, the statement I should say, of the Thai National News Bureau Public Relations Department.

-Condominium business has the highest figure growth in real estate market in the first quarter of this year.

-but... He says there are new 82 projects. The number decreases when compared with the same period of the previous year (98 projects)

-but it seems that what has increased, compare to previous year, is the number of finished condos (traduction : over supply... it's the result of projects that were launched... 2 years ago).

-The price of condominiums that people have shown much interest is at 1-3 million baht, a drop from 3-5 million baht (traduction : bad... people have less money to spend, they prefer cheap projects)

-As for the government’s economic stimulation policies, including the reduction of interest rate, Mr. Sophon says the policies do not have much effect on this business (traduction : strange... But bad, the stimulus doesn't work).

and the final straw :

-President of Thai Appraisal Foundation says real estate market might face a slowdown in this year

So overall, it's a very negative article !

But with a fushia-rozy-pink title.

I love this country.

[djinn]

Hmmm, this conflicts slighlty with what was in todays BKK Post

Not really.

Read again the paper, the statement I should say, of the Thai National News Bureau Public Relations Department.

-Condominium business has the highest figure growth in real estate market in the first quarter of this year.

-but... He says there are new 82 projects. The number decreases when compared with the same period of the previous year (98 projects)

-but it seems that what has increased, compare to previous year, is the number of finished condos (traduction : over supply... it's the result of projects that were launched... 2 years ago).

-The price of condominiums that people have shown much interest is at 1-3 million baht, a drop from 3-5 million baht (traduction : bad... people have less money to spend, they prefer cheap projects)

-As for the government’s economic stimulation policies, including the reduction of interest rate, Mr. Sophon says the policies do not have much effect on this business (traduction : strange... But bad, the stimulus doesn't work).

and the final straw :

-President of Thai Appraisal Foundation says real estate market might face a slowdown in this year

So overall, it's a very negative article !

But with a fushia-rozy- pink title.

I love this country.

Gooood analysis;I couldn't say it better

[bingobongo]

of course a Thai appraiser would say things are well, he makes his money on the # of transactions

have you ever heard a realtor say it was never a good time to buy regardless of how the market is doing? same thing, transaction based jobs (realtors and appraisers) always think it is good to buy, no matter what the situation

[malcolminthemiddle]

Isn't the first post about condos for private ownership and the second post about serviced apartments?

Two different animals?

[gharknes]

They might be building plenty but nobody is buying.............that's my take on the article. not surprised

[blacklabel]

They might be building plenty but nobody is buying.............that's my take on the article. not surprised

Very true......many supply but very less demand but why?

[bkkandrew]

They might be building plenty but nobody is buying.............that's my take on the article. not surprised

Very true......many supply but very less demand but why?

Er. Perhaps building too many, not enough dosh?

[sunshine13]

there is a condominium being built close to ratcheweri bts and there is a very limited number of resales. its almost finished, and if the market was as bad as some of you think, then there should be more resales...

[quiksilva]

Isn't the first post about condos for private ownership and the second post about serviced apartments?

Two different animals?

Correct.

[midas]

there is a condominium being built close to ratcheweri bts and there is a very limited number of resales. its almost finished, and if the market was as bad as some of you think, then there should be more resales...

I dont agree - Thais dont always resell - I recently saw an empty shell condominium that was still

locked up from the last crisis in 1997 ! And in any case I don't think many Thais are so interested

in purchasing " resale " condominiums ?

[palm]

They might be building plenty but nobody is buying.............that's my take on the article. not surprised

If you find any of the prime new condos suddenly offering big discounts to get sales, you let me know

[kmart]

Foreigners might be allowed to buy condos, but as for being allowed to live here and actually occupy them...?

[Gary A]

I believe there is/will be a glut of condominium units, BUT, that glut will be the overpriced 90,000 baht per square meter and up units. If the country were perfectly stable and there were no visa problems, I would NEVER even consider ANY unit priced over 3 million baht. The fact is that affordable shoe box sized units are WAY over priced at about 1.4 million baht. Those same units were selling for 350,000 - 400,000 baht just 4 years ago. Construction materials have gone up but not that much.

[Old Man River]

I believe there is/will be a glut of condominium units, BUT, that glut will be the overpriced 90,000 baht per square meter and up units. If the country were perfectly stable and there were no visa problems, I would NEVER even consider ANY unit priced over 3 million baht. The fact is that affordable shoe box sized units are WAY over priced at about 1.4 million baht. Those same units were selling for 350,000 - 400,000 baht just 4 years ago. Construction materials have gone up but not that much.

If there is a glut, it will be in areas that are not prime locations. The old adage of location, location, location holds true everywhere. The units priced at THB 90,000 and over per sq. meter, if located in prime locations, will continue to do well. Units that are not in prime locations, if deemed overly expensive for the area, will have problems.

[bingobongo]

ok spinmeisters.....more rainbows?

Average price of houses at four-year low

Bangkok Post: 20 April 2007

By: KANANA KATHARANGSIPORN

Developers shift to low-priced units

The average housing price in Greater Bangkok declined to 2.14 million baht a unit as of the end of the first quarter _ the lowest since 2003 _ because most developers are shifting to the lower-end market, according to the property consulting firm Agency for Real Estate Affairs (AREA).

The average housing price was 2.83 million baht in 2006 and 3.086 million in 2005, according to the company's earlier surveys.

''This situation showed an oversupply trend in the condominium market remained. If there is an economic crisis, the property market may crash.''

http://thailand-property-guide.com/?p=news...&NewsID=323

Edited April 20, 2007 by bingobongo

[appleman_thai]

Foreigners might be allowed to buy condos, but as for being allowed to live here and actually occupy them...?

Very valid point. I have 2 condos in Thailand but couldnt get a visa to stay.

Now I am back in Ireland waiting for the storm to blow over!

Still trying to rent out one of the condos!

[gummy]

Foreigners might be allowed to buy condos, but as for being allowed to live here and actually occupy them...?

Very valid point. I have 2 condos in Thailand but couldnt get a visa to stay.

Now I am back in Ireland waiting for the storm to blow over!

Still trying to rent out one of the condos!

Clearly a well thought through investment strategy.

[bkkandrew]

Foreigners might be allowed to buy condos, but as for being allowed to live here and actually occupy them...?

Very valid point. I have 2 condos in Thailand but couldnt get a visa to stay.

Now I am back in Ireland waiting for the storm to blow over!

Still trying to rent out one of the condos!

I was in the the process of "buying" a really good development on Saturn. Seems that flights there are a bit tricky (negotiating the rings and all), but I expect to make a packet!

[appleman_thai]

Clearly a well thought through investment strategy.

THanks for the smart and pathetic reply!

Yes, it was a well thought out strategy and with the info i had at the time it was the right decision!

I had been living and working in THailand for 4 years (company with full BOI backing for over 20 years).

I expected that I would be entitled to 12 month investment visa based on investment in condos.

However, things didnt work out too well. I couldnt get the visa to stay and have since returned home.

I still believe this is just a temporary blip and that things will start to become more positive in a couple of years time.

In the meantime things wont be too good but i will focus on the long term....

[ThaiGoon]

I still believe this is just a temporary blip and that things will start to become more positive in a couple of years time.

I think you will be proven to be right.

[sunshine13]

I believe there is/will be a glut of condominium units, BUT, that glut will be the overpriced 90,000 baht per square meter and up units. If the country were perfectly stable and there were no visa problems, I would NEVER even consider ANY unit priced over 3 million baht. The fact is that affordable shoe box sized units are WAY over priced at about 1.4 million baht. Those same units were selling for 350,000 - 400,000 baht just 4 years ago. Construction materials have gone up but not that much.

I just want to make one opinion/statement. The condominiums that are located very close to the BTS in bangkok will not be left unsold or unoccupided. there is a very high demand for these properties. many of you seem to be commenting on the sidelines. i recently moved and let me tell you that if you want a location in 5 minutes walking distance to the bts that you will have a hard time finding it. there are not alot of vacant rooms, to rent or buy.

it seems much more likely that any big fall in the market will come in tourist regions outside of bangkok.

[sunshine13]

What do you mean you cant get a visa to stay in thailand? why dont you just go to hong kong, vietnam, laos, singapore every 90 days? if you cant afford to make this quarterly trip for a tourist visa then maybe you cant afford to buy a condominium either...

some of you guys are just so strange.... you buy 2 condos in thailand, but cant figure out what i wrote above so you are back in ireland? makes Zero sense.

[appleman_thai]

officially there is no legal way that i can stay in thailand according to current legislation and enforcement of those rules.

Under 50, not working, not married to a Thai and no Thai kids.

Sure there are "other" ways to stay - tourist visa, student visas but i did not want to live my life on the whim of a guy on a border every few months. If he had his way the previous evening then i would get the green light, if he didnt then i would be given the heave-ho!

Without sounding conceited - money wasnt and isnt an issue for me.

Maybe you think people are strange because you dont have the full facts!??!

PLus, my condo in bangkok is 7 minutes walk to the Subway - and I still cant rent it! Some agents have even refused to take my condo on their books!

My point is there is definitely a downturn at the moment and that the reason is not solely due to the Thai situation but also a global effect.

Again, i still think that in a few years things will improve and I am still happy with my investments - i just wish i could have stayed in Thailand longer! Thats all!

[london]

Appleman, I too am just sitting this current situation out.

It is like everything else......these down times will pass.

I too have condos in BKK as investments but luckily they are rented out. However, like you, if they became vacant, I'd hold. I have no intention of selling.

My view on the condo market is that there certainly are a lot of new projects on the go..or nearing completion. Many of the projects are so similar to others going up (ie: size, location, design, cost, quality) that these are the ones that I would stay well away from. I prefer quality buildings in prime locations or with something "extra" as a bonus...views etc.

I went to the opening sales day of The River.....and although I wasn't tempted to buy, most of the units for sale were sold by 11am on the first day, whereas other developments away from the main areas, with nothing going for them, remain unsold. This doesn't sound to me like a problem in the market (ie: overheating).....nor one coming soon.

The issue is that this government has really made some fairly serious mistakes....those that effect the country's financial standing and credibility. Those foreigners with money, be they companies or individuals, are unsure of which way this government will turn next. Financial insecurity always has its consequences. Added to that the new immigration rules, well, it doesn't encourage people of means to venture in here.

As for Thai buyers, I feel they prefer homes rather than condos....and if they do buy condos for investment, they tend to be the lesser priced ones that are easier to rent out to Thais. It is the market that they understand.

However, I feel that the Immigration rules will be refined to allow those with assets here to be encouraged to stay, whereas those who basically abuse the system, and the hospitality of the country, will find it becoming ever more difficult to stay.

In essence: you either have faith and belief in a country...or you don't. I feel that you and I do have this belief that Thailand will be back on track soon.