Here Is Proof The Bangkok Condo Market Is Still Booming

[Livinginexile]

Keep your eye on both the Thai retail and commercial banks over the next few months. They've been see-sawing on the SET. Those that are over extended with loans to both developers (commercial banks lending to developers who have sold out "100%" - but in reality 90% of purchasers are speculators) and speculators themselves (retail banks who lend to those borrowing to service their off-plan purchase).

2. Financials Industry Group (consisting of the banking, finance & securities,

and insurance sectors):This industry group saw net profit of THB 23,276 million,

a 22% y-o-y decline, principally due to setting aside reserves for doubtful

debts as required by Bank of Thailand (BOT).

cite

These figures do not represent high end property sales, all they reflect is poor management on the part of the developers.

[phetpailin]

I think they sold out when that time properties in BKK is hot now is slowing down and can not closed deal quickly like before.

[merlion]

hello mdeland, you are right i am a nonplayer at the moment, as we sold our property in 2006 prior to the glorious coup, so as of now, our money is safely tucked away in the west, we will come back, once the coup has thoroughly destroyed the economy (which they are well on their way to doing as we speak)

by the way how is your midlife crisis coming along?

Ahhh there it is....

Poor old Bingo sold his Bht500k condo in 2006 and now the market has boomed so much it has locked him out of the high end segment and now he is really pissed.

So you are waiting for a "crash" Bingo?

Like Hong Kong?

Like Shanghai?

Like Singapore?

Like KL?

Like Jakata?

etc, etc, etc....

High end condo market is BOOMING in Bangkok.

There are stuill some bargains around the old airport Bingo, perhaps you would feel a little more comfortable out there.

Good lucke dude

oh my god!!!

made my week end

Astute bro!

[bingobongo]

hello again all you donald trump wannabes........thanks for the rhetoric mdeland, but i deal in reality.....and the #s do not lie........the trend in pricing power is down......housing starts are down.........construction firm defaults/bankruptcies up.......so you see silly rabbits (trix are for kids), this is for new construction coming online, good luck trying to sell your "used condo", when buyers have plenty of new inventory to choose from...........enjoy the pretty colors

oh, i almost forgot, these BAHT #s are NOT INLFLATION ADJUSTED so the rate of REAL loss is actually worse

construction starts down..........

Edited June 17, 2007 by bingobongo

[obsession]

so lets see: coup, bombings in bangkok and in the south, consumer confidence at record lows, builders stopping some projects, high debt service amongst populace, banks offering teaser rates (via 3 month home loan interest deferals), rumours of another coup, oversupply of property, and draconian capital controls (did i miss anything?).....given all the above, i thought the following definition might come in handy

Real Estate Dictionary

Bubble Buyer (bub·ble buy·er)

-noun

1. A person that purchases a home at the peak or near the top of a housing bubble.

2. Someone, who believes Realtor hype and propaganda that home prices always go up, who pays way too much for a house.

Agreed, theres a fool born every minute. The signs are all there for a property crash and more, but some people actually cant see them. I really dont understand it. What more would have to happen in los for them to think its not a good time to invest. Seems like they are determined to invest no matter what.

[endure]

so lets see: coup, bombings in bangkok and in the south, consumer confidence at record lows, builders stopping some projects, high debt service amongst populace, banks offering teaser rates (via 3 month home loan interest deferals), rumours of another coup, oversupply of property, and draconian capital controls (did i miss anything?).....given all the above, i thought the following definition might come in handy

Real Estate Dictionary

Bubble Buyer (bub·ble buy·er)

-noun

1. A person that purchases a home at the peak or near the top of a housing bubble.

2. Someone, who believes Realtor hype and propaganda that home prices always go up, who pays way too much for a house.

Agreed, theres a fool born every minute. The signs are all there for a property crash and more, but some people actually cant see them. I really dont understand it. What more would have to happen in los for them to think its not a good time to invest. Seems like they are determined to invest no matter what.

What about those people who are simply buying a home, somewhere to live?

[endure]

If you gents can't resist sniping at each other I'm going to close this thread. The choice is yours. Statistics and opinions are great. Playground brawls are not.

[obsession]

so lets see: coup, bombings in bangkok and in the south, consumer confidence at record lows, builders stopping some projects, high debt service amongst populace, banks offering teaser rates (via 3 month home loan interest deferals), rumours of another coup, oversupply of property, and draconian capital controls (did i miss anything?).....given all the above, i thought the following definition might come in handy

Real Estate Dictionary

Bubble Buyer (bub·ble buy·er)

-noun

1. A person that purchases a home at the peak or near the top of a housing bubble.

2. Someone, who believes Realtor hype and propaganda that home prices always go up, who pays way too much for a house.

Agreed, theres a fool born every minute. The signs are all there for a property crash and more, but some people actually cant see them. I really dont understand it. What more would have to happen in los for them to think its not a good time to invest. Seems like they are determined to invest no matter what.

What about those people who are simply buying a home, somewhere to live?

If your buying to live in for many years, then it doent really matter if the price goes down. I suggest a condo, rather than a house though. I just think the title of this thread is laughable and wonder how people cant see that there are many ingredients for a recession, rather than a booming property market.

[quiksilva]

L.P.N. expects 27% rise in profit as condominium sales strong

L.P.N. Development, the country's largest condominium developer, said its 2007 profits should rise by at least 27%, in line with analyst's forecasts.

Managing director Opas Sripayak attributed much of the increase to healthy demand for middle- and low-income condominiums, a niche in which the company says it faces little competition.

''We have been doing quite well selling low-priced condos this year,'' Mr Opas said. ''Sales for the second quarter were much better than expected.''

Eleven analysts polled by Reuters Estimates forecast profits of 972 million baht, up 27% from 2006, on revenues of 6.38 billion baht, a 34% increase on the previous year.

''Demand for low-priced condominiums in many locations in Bangkok is still strong and L.P.N. should at least meet the forecasts,'' Mr Opas said.

L.P.N., whose cheapest units cost 600,000 baht, has around 30% of the condominium market, itself around one-third of the entire property market.

About 17,000 new units, a substantial number of them close to Bangkok's subway and Skytrain stations, came on to the market last year, up 50% on the previous year, Mr Opas said.

Other operators in the market include Supalai and Asian Property Development. Last month, detached housing developers such as Land & Houses and Preuksa said they planned condominiums to tap into the rising demand. But Mr Opas said the condo market would slow this year amid political uncertainty and concerns about economic growth, projected at 4% to 4.5% this year.

About 20,000 new condominium units would be come on to the market this year, up only 18%, Mr Opas said. L.P.N. would launch three low-priced condominium projects in the second half of this year, the same number as the first half, he said.

''The market for low-priced condominiums for people in their first jobs and for renting is a big. Demand is still far outstripping supply,'' he said. ''But for condominiums over two million baht there is an oversupply.''

L.P.N. would spend up to two billion baht, funded from working capital, on land acquisitions this year, he said.

LPN shares closed on Friday on the SET at 7.55 baht, up 3.42%, in trade of 74.74 million baht. REUTERS

A 34% increase in profits from 2006, shows that the lower segment of this market is still strong, but is showing signs of weakness in the upper segments.

Edited June 18, 2007 by quiksilva

[palm]

>>The signs are all there for a property crash and more, but some people actually cant see them. I really dont understand it.

Well that's your basic problem - you really don't understand it.

One day, maybe if you whingers are lucky enough to be able to buy in the 10m+ baht range here in Bangkok (after all, the majority of us white-skins have to pay cold hard cash), you'll have a better understanding why people buy high quality property here and continue to do so.

The laughable 'you don't get it', 'fool born every minute' brigade are the same tired whingers who squeal like little girls who've just dropped their ice cream on the floor. It must be painful for you to see others with the ability to purchase high quality condos in Bangkok.

By understanding economic principles, and the little things like supply, demand, inflation, fiscal policy, debt ratios, exchange rates, hedge funds, taxes, trusts, macro and microeconomics, the grown-ups have a very good understanding of how the world works and profit from it.

In the last 15 years, I've come across countless whingers who say markets are about to 'collapse', but really what they mean is 'life is not fair, I can't afford to buy anything of nice quality; all those who can must be stupid.'

Meanwhile, those who don't have a thorn in their side, use cash they make from their work, businesses and investments to buy nice property here and lead a superb luxury lifestyle.

[backflip]

"oh, i almost forgot, these BAHT #s are NOT INLFLATION ADJUSTED so the rate of REAL loss is actually worse "

As usual, you are wrong. Where's the "loss"? The chart you showed was for launched products and, if you compared the SIZE of the unit offered, you will see that the selling price per square meter is HIGHER.

[highdiver]

>>The signs are all there for a property crash and more, but some people actually cant see them. I really dont understand it.

Well that's your basic problem - you really don't understand it.

One day, maybe if you whingers are lucky enough to be able to buy in the 10m+ baht range here in Bangkok (after all, the majority of us white-skins have to pay cold hard cash), you'll have a better understanding why people buy high quality property here and continue to do so.

The laughable 'you don't get it', 'fool born every minute' brigade are the same tired whingers who squeal like little girls who've just dropped their ice cream on the floor. It must be painful for you to see others with the ability to purchase high quality condos in Bangkok.

By understanding economic principles, and the little things like supply, demand, inflation, fiscal policy, debt ratios, exchange rates, hedge funds, taxes, trusts, macro and microeconomics, the grown-ups have a very good understanding of how the world works and profit from it.

In the last 15 years, I've come across countless whingers who say markets are about to 'collapse', but really what they mean is 'life is not fair, I can't afford to buy anything of nice quality; all those who can must be stupid.'

Meanwhile, those who don't have a thorn in their side, use cash they make from their work, businesses and investments to buy nice property here and lead a superb luxury lifestyle.

so so right.

it feels realy bad to know that so many "new fools" are born every day and thwy are buying. so if there are so many fools out there. where is the "crisis"??

[highdiver]

"oh, i almost forgot, these BAHT #s are NOT INLFLATION ADJUSTED so the rate of REAL loss is actually worse "

As usual, you are wrong. Where's the "loss"? The chart you showed was for launched products and, if you compared the SIZE of the unit offered, you will see that the selling price per square meter is HIGHER.

please dont talk about facts and Bingo in the same sentence. other members may find this confusing.

[Livinginexile]

Here in Sydney the average rental yeilds are between 2 and 4%. Capital groth has fallen over 10% in the past 18%

In Bamgkok average rental yeilds are between 5 and 7% with about 10% growth over the same period,

"According to Ms. Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand, "Luxury and high-end condominium units in downtown Bangkok have been attracting a huge amount of interests from long-term investors even though the market has slowed down as a result of the political and economic situation. However, over the past few years, long-term investors who make profits from reselling or earning rental income from their units have remained keen to purchase condominium properties in Bangkok because of their understanding and confidence in the market. Based on their experience, they are satisfied with investment returns in the form of capital appreciation and rental yields of 5-7%, which is higher than the current deposit account interest rate of 3.5%."

http://www.financealley.com/article_171295_33.html

A far better investment proposal to buy in Bangkok.

[pkrv]

it appears the "Trendy" condominiums should be renamed the "Overspendy"....as builder default is coming

Yes it's been a hair raising experience buying at "The Trendy".

I have to admitt, at one point I thought I would lose my 25% deposit.

There is a US based project management firm now looking after the job. www.cmdintl.com

It's now going ahead and looks to be about 90% complete.

The one good thing is I bought at the original 2005 price.

Anyway....It will be finished before the end of this year.

'Livinginexile' - BTW it is because you are open on this forum that I find your comments and thoughts constructive. Nice Avatar, though I liked the last one as well

Edited June 18, 2007 by pkrv

[The Skipper]

"In the last 15 years, I've come across countless whingers who say markets are about to 'collapse', but really what they mean is 'life is not fair, I can't afford to buy anything of nice quality; all those who can must be stupid.'"

10 years ago, this project and a few hundred more were stopped in their tracks.

Won't happen again?

[quiksilva]

Nothing is impossible Skipper, bank's today are much more cautious and strict with their lending practices than they were 15 odd years ago when the true bubble was forming.

Property financing today is a whole new ball game, sure some developers may not survive the slowdown, badly run businesses, with poor products, go under all the time and this is true for all manner of industry.

The truth is there are a lot of veteran developers out there who were badly bitten by 1997 and are now more than twice shy.

They do crazy things these days like market research, feasibility analyses, sensitivity analyses, and not just because they like playing with spreadsheets, but banks require them for construction financing.

The bank managers simply won't push the button until a project has sold a certain amount and are convinced that the developers research tallies with their own findings.

Edited June 19, 2007 by quiksilva

[pkrv]

Hi The_Skipper - Yes indeed - a grim reminder to keep your finger on the pulse. 'The Lakes' too has its shadowy twin, curiously not depicted in the marketing blurb .

I have heard comments about some of these ghosts from the past coming alive again as the development companies come out of deep freeze. Is this true or indeed technically feasible?

The new post 97 regulations should also help, though again care must be taken - for example check that the correct amount of green space has been allocated (preferably at ground level, though roof terraces and gardens are fine), I not entirely sure this is always done “The Manhattan” sort of come to mind, I’m not entirely clear how they went about achieving this.

[quiksilva]

Sure many so called ghosts have been revived, happens all the time.

Time Square on Sukhumvit was a skeletal ghost building for 8 years, as was Raimon Land's "The Lakes", Q House Lumpini is another, as is Central World Tower, CU Hitec, Pornpat (now Exchange Tower) the old condos on Narathiwas behind JC Kevin, are now also being revived as serviced apartments etc. The list goes on, even the Novotel on the river (now the Millennium) was a 'ghost' building for a while.

Meinhardt once told me that so long as the reinforcing is covered by concrete it can be salvaged. It may need patching up in places but generally exposure to the elements it is not considered to be a major obstacle.

Increasingly these 'ghosts' are being sold by the now defunct developers who have been exiting debt restructuring and being brought back into the market.

Edited June 19, 2007 by quiksilva

[Livinginexile]

Sure many so called ghosts have been revived, happens all the time.

Time Square on Sukhumvit was a skeletal ghost building for 8 years, as was Raimon Land's "The Lakes", Q House Lumpini is another, as is Central World Tower, CU Hitec, Pornpat (now Exchange Tower) the old condos on Narathiwas behind JC Kevin, are now also being revived as serviced apartments etc. The list goes on, even the Novotel on the river (now the Millennium) was a 'ghost' building for a while.

Meinhardt once told me that so long as the reinforcing is covered by concrete it can be salvaged. It may need patching up in places but generally exposure to the elements it is not considered to be a major obstacle.

Increasingly these 'ghosts' are being sold by the now defunct developers who have been exiting debt restructuring and being brought back into the market.

I was reading not long ago that of the hundreds of "ghosts" left over from the 97 crash, only a handfull are left to be completed or redeveloped.

What about that partly built built shell directly next to Nana BTS and the vacant block next to it? Whenever I stand on the platform overlooking this ghost I often wonder why it has been completed. It is absolutely prime location and you would think the owner or a developer would jump on the opertunity to finish the job.

Anyone know about the history of this site?

It would be great if they finish it as it is such an eyesore.

[bingobongo]

to quote a real estate guru.....(general comment, not specific to anyone country/market).....good luck.......you are going to need it

“Prices are shakiest for condominiums, which are in the worst shape, Archer said. ‘Condominiums have always been the most volatile component of the housing market,’ he said. ‘They’re the play things of the amateur investors and they seem to invite misjudgments and high-risk behavior.’”

[quiksilva]

Sure many so called ghosts have been revived, happens all the time.

Time Square on Sukhumvit was a skeletal ghost building for 8 years, as was Raimon Land's "The Lakes", Q House Lumpini is another, as is Central World Tower, CU Hitec, Pornpat (now Exchange Tower) the old condos on Narathiwas behind JC Kevin, are now also being revived as serviced apartments etc. The list goes on, even the Novotel on the river (now the Millennium) was a 'ghost' building for a while.

Meinhardt once told me that so long as the reinforcing is covered by concrete it can be salvaged. It may need patching up in places but generally exposure to the elements it is not considered to be a major obstacle.

Increasingly these 'ghosts' are being sold by the now defunct developers who have been exiting debt restructuring and being brought back into the market.

I was reading not long ago that of the hundreds of "ghosts" left over from the 97 crash, only a handfull are left to be completed or redeveloped.

What about that partly built built shell directly next to Nana BTS and the vacant block next to it? Whenever I stand on the platform overlooking this ghost I often wonder why it has been completed. It is absolutely prime location and you would think the owner or a developer would jump on the opertunity to finish the job.

Anyone know about the history of this site?

It would be great if they finish it as it is such an eyesore.

I know the details but can't disclose them. Watch this space.

[pkrv]

Hi Livinginexile - I hope I am not side tracking things but know you have an interest in The Trendy (Indeed I have contributed to some of the threads on this project). I agree its very nail biting buying 'off the plan' but I personally should be going for handover (confirmed again today) late August early September. This is a very protracted process and I have included some text below from the thaivisa thread I contribute to.

http://www.thaivisa.com/forum/index.php?showtopic=58207

By cross referencing this to the build state of The Trendy I think you can work out for yourself realistic timescales, and by the way The Park has had no major problems, nor intent to hide things, this is just the way it is!

<quote>

One of the first links in this thread is when I began exploring property in Thailand (see the past posts link). At the time I had no idea on what to expect when entering into the condominium off the plan market and indeed I tried to research this but at the time found no open/transparent examples.

I hope that the information below may help people with other projects, in this and other areas of Bangkok.

The Park and the Athenee may be the first fully documented (over their build life cycle) projects on this Forum.

The Park - First initial web posts that I can find dated Jan 2004

http://www.skyscrapercity.com/showthread.php?t=82189

Current status (I am advised) Completion August/September 2007 (link http://www.theparkresidence.co.th/exterior.htm to see where they are at)

The Athenee - First initial web posts that I can find - September 2004

http://www.skyscrapercity.com/showthread.php?t=130008

I would estimate from this completion April/May 2008????? The projects look at almost exactly the same state of build, based on start dates between the relative projects (if that makes sense)

I understand the The Address and The Manhattan, have almost sold out, I am not sure what is happening with the Sansiri.

<end quote>

[Livinginexile]

Hi Livinginexile - I hope I am not side tracking things but know you have an interest in The Trendy (Indeed I have contributed to some of the threads on this project). I agree its very nail biting buying 'off the plan' but I personally should be going for handover (confirmed again today) late August early September. This is a very protracted process and I have included some text below from the thaivisa thread I contribute to.

http://www.thaivisa.com/forum/index.php?showtopic=58207

By cross referencing this to the build state of The Trendy I think you can work out for yourself realistic timescales, and by the way The Park has had no major problems, nor intent to hide things, this is just the way it is!

<quote>

One of the first links in this thread is when I began exploring property in Thailand (see the past posts link). At the time I had no idea on what to expect when entering into the condominium off the plan market and indeed I tried to research this but at the time found no open/transparent examples.

I hope that the information below may help people with other projects, in this and other areas of Bangkok.

The Park and the Athenee may be the first fully documented (over their build life cycle) projects on this Forum.

The Park - First initial web posts that I can find dated Jan 2004

http://www.skyscrapercity.com/showthread.php?t=82189

Current status (I am advised) Completion August/September 2007 (link http://www.theparkresidence.co.th/exterior.htm to see where they are at)

The Athenee - First initial web posts that I can find - September 2004

http://www.skyscrapercity.com/showthread.php?t=130008

I would estimate from this completion April/May 2008????? The projects look at almost exactly the same state of build, based on start dates between the relative projects (if that makes sense)

I understand the The Address and The Manhattan, have almost sold out, I am not sure what is happening with the Sansiri.

<end quote>

pkrv

Thank you very much for that information, to tell you the truth I have only ocasionally scanned this thread over the past but I've just taken the time to read it all.

It is a very very interesting thread.

You are not wrong about it being a hairy experience buying off the plan, especially when you live in another country and cannot physically keep track of progress.

I will be back in Bangkok early August for a couple of weeks and HOPEFULLY a pre final inspection will be in the offing.

I think at the end of the day pkrv we will be very happy little campers and I can't wait untill it's finished.

You know...allready I have had 2 offers from people looking for a long term lease and at a lot more rent than I originally thought I would get, thats why I'm so keen for them to pull their finger out and get it finished...I'm losing money

Anyway all the best to you mate, maybe we could catch up for a beer in Bangers one day

[pkrv]

- PKRV

[bingobongo]

one more time....all together now.......when SUPPLY is greather than DEMAND.......prices go down.....

thats it, flood the market with more condos.......nothing like a 14% haircut for something newer........why buy old when you can by new for less

New condo offerings increase 82% in May

Mr Sopon said average unit prices in May were 2.482 million baht, 14.2% lower than 2.894 million in April.

http://thailand-property-guide.com/?p=news/article&NewsID=414

[Livinginexile]

one more time....all together now.......when SUPPLY is greather than DEMAND.......prices go down.....

thats it, flood the market with more condos.......nothing like a 14% haircut for something newer........why buy old when you can by new for less

New condo offerings increase 82% in May

Mr Sopon said average unit prices in May were 2.482 million baht, 14.2% lower than 2.894 million in April.

http://thailand-property-guide.com/?p=news/article&NewsID=414

Bingo

You really must stop quoting low end/ budget segments on the Thai condo market, ie sub bht2 million. The high end segment is a completely different ball game.

"Based on the latest survey by the CB Richard Ellis Research team, in 2005, there were 1,788 newly launched units positioned at the luxury and high-end of the market while there were are 1,097 newly launched units in 2006, representing a significant decrease of 38.6%. In 2007, it is expected that there will be a similar number of new luxury and high-end condominium launches as in 2006. CB Richard Ellis recommends that buying a luxury condominium unit is a good investment option as there will be limited supply in the future."

http://www.financealley.com/article_171295_33.html

[pkrv]

Bingo - from all I have seen you are an attention seeker - and what the hey - why not -this is Thailand afterall - but please, please, please could you please, just once do a ballanced update?

[bingobongo]

not jealous of debt or depreciating buildings, just adding reality to dreams

[cuica]

"Based on the latest survey by the CB Richard Ellis Research team, in 2005, there were 1,788 newly launched units positioned at the luxury and high-end of the market while there were are 1,097 newly launched units in 2006, representing a significant decrease of 38.6%. In 2007, it is expected that there will be a similar number of new luxury and high-end condominium launches as in 2006. CB Richard Ellis recommends that buying a luxury condominium unit is a good investment option as there will be limited supply in the future."

http://www.financealley.com/article_171295_33.html

CBRE is probably the largest real estate agent for new high-end condos in Bangkok, so I always find such news releases more self-serving than anything else.

To support their thesis that buying a luxurous condo in Bangkok is a good investment, CBRE only shows the numbers for the supply has decreased. But where are the numbers for the demand? How many out of the 1,097 has been sold in 2006? And more importantly, how are the current new high end condos selling this year? CBRE must have the numbers, but notice it is nowhere to be found in the article. Their thesis can only be valid if they can show decreasing supply and increasing demand, but the demand numbers are missing. Are they hiding something?

Let's take a look at one of the high end condo projects "Millenium Residence" in the heart of Sukumvit Soi 16-18-20, of which CBRE is the sole agent. According to a Bangkok Post, May 22, 2007 article titled "Eight Funds vie for Half of Millenium", about 150 units of 302 units have been sold since the condo went on sale in mid-2006: so that's 50%. Hardly increasing demand at this point in time for this new high-end condo development.

The moral of this story: don't believe everything you read in the papers right away.