When is the right time to buy property in Bangkok?

[Liverpool Lou]

On 6/15/2021 at 4:46 PM, spidermike007 said:

friend of mine recently moved to Pattaya. He looked at condos in Jomtien. He walked into one of the nicest towers, looked at a 36th floor unit with panoramic views, and when he was quoted 28,000 a month, he offered 10,000. They settled on 13,000. He said the agent more or less admitted the building was nearly empty, and they could not rent or sell anything, at this time.

Which condo building was that?

[Excel]

12 minutes ago, Liverpool Lou said:

Which condo building was that?

Sorry for my ignorance but which part of Bangkok, the gist of this thread, is Jomtien  as I always thought that was in in Chonburi ? As for the right time to buy in Bangkok then in my view there will never be a right time as time is running out for a city that by the end of this century will be flooded to a significant degree, unless that is you are gambling on having waterfront properties. But then do you disagree with the environmental experts ?

[spidermike007]

54 minutes ago, Liverpool Lou said:

Which condo building was that?

Virtually all of them.

[Liverpool Lou]

1 minute ago, spidermike007 said:

55 minutes ago, Liverpool Lou said:

Which condo building was that?

Virtually all of them.

Thought it sounded like a good deal, makes it a bit easier looking for one than looking at all of them.   Sorry I asked.

[KarenBravo]

If you're buying primarily to live in it, anytime is good.

If you're buying as an investment, never.

[smutcakes]

1 hour ago, Excel said:

Sorry for my ignorance but which part of Bangkok, the gist of this thread, is Jomtien  as I always thought that was in in Chonburi ? As for the right time to buy in Bangkok then in my view there will never be a right time as time is running out for a city that by the end of this century will be flooded to a significant degree, unless that is you are gambling on having waterfront properties. But then do you disagree with the environmental experts ?

 

Quite frankly by the time it reaches the next century i will of been gone 50 years, my children 30 years etc etc, not buying because something my of flood in 80 years is laughable.

[spidermike007]

48 minutes ago, Liverpool Lou said:

Thought it sounded like a good deal, makes it a bit easier looking for one than looking at all of them.   Sorry I asked.

 

It is the Riviera. But keep in mind it is a renters market. Do not hesitate to counter offer with a silly amount, on any building, right now. If it were me, I would start at 35% of what I was quoted. They are absolutely desperate for tenants. 

 

It will take some time for all parties to determine the full extent of the economic damage of both the insane economic shutdown, and the withdrawal from the tourism market. International by choice and domestic by brain dead sabotage. 

 

The effects will be felt for years and will likely be far worse than 1997, in my estimation. Expect less than 5 million international tourists, by 2025.

Edited June 19, 2021 by spidermike007

[Liverpool Lou]

2 hours ago, spidermike007 said:

3 hours ago, Liverpool Lou said:

Thought it sounded like a good deal, makes it a bit easier looking for one than looking at all of them.   Sorry I asked.

 

It is the Riviera.

Thanks, appreciated.

[wordchild]

one significant factor that needs to be borne in mind when buying in Bangkok is the maintenance of the building, both in the short and long term, and also, related to that, the level of the Common Area Fees (CAM fee).

From my experience i would make the following observations;

  1) The CAM is nearly always set at a minimal level for a newly built condo. This is because investor buyers are put off by a high CAM fee as it is a direct cost to them which they need to pass on through their achieved rent. The developer has no particular incentive to set a realistic level of CAM fee as they will be long gone by the time any maintenance issues come to the fore.

2)As the building ages ,say beyond 5/7 years the owners and their committee are faced with the issue of dealing with this legacy. By this stage finances are likely to be tight and some hard decisions need to be taken. From what i have seen many new build condos in Bangkok have fees that are (at this stage)  ridiculously low given the costs and complexity of maintaining a building to a reasonable standard over time. 

3)This is a problem faced by all condos but it is a particular challenge for low/medium rise condos as they have less residential  sqm area over which to spread the common area costs. 

4)Different owner profiles has an effect on the decisions the committee makes. A high proportion of investor owners will likely mean that the committee is pressured into keeping the fees low. This means that  unavoidable costs need to be dealt with as they occur, through raising funds from the owners as a one off additional fee. Many Thai investors prefer this approach as they feel it keeps costs down, and the committee under control. However , from what i have seen, the general level of maintenance in these buildings also suffers over time. Service levels also decline eg unmanned reception desks, security staff reduced, cleaning carried out less frequently, emergency technical backup unavailable outside hours etc etc. Also , over time, the lack of investment shows and as the building ages this become more and more apparent.

5) The above has meant that there is a significant divergence between the CAM fees of different condos in Bangkok eg from under 50baht per sqm per month to over 100 baht. so at the upper end monthly fees are in excess of 10000baht for every 100 sqm of unit size. From what i have seen the higher CAM fees are usually in those buildings which have a high proportion of owner occupiers so there is a greater commitment to invest in their building.  They tend also to be older and low/medium rise.

 I saw a report a couple of years ago written by CBRE. In this report they identified a link between  achieved 2nd hand  selling prices of older condos and buyers perception of maintenance and service quality. Their conclusion was that within Bangkok there were a relatively small number of older buildings which continued to attract premium selling prices ahead of the market. Most other condos, they said, lost value (relative to new build) over time, some by a significant amount.

Obviously CBRE are one of the leading building management groups in Thailand so they have some incentive to argue for continual investment; nevertheless, from my own experience, i would agree with their broad conclusion.  I know of some 10 year old condos that still look great and i have seen others ,even newer, which are already starting to look very tired.

There should be no fundamental reason why a well constructed and well maintained condo should lose value over time eg look at the many beautiful Manhattan co-ops which still look great 80 years after they were built. But it takes continual investment and owners who care.

 

 

Edited June 20, 2021 by wordchild

[RafPinto]

On Friday the 08th. Lucky number.

[RafPinto]

On 6/15/2021 at 10:30 AM, NCC1701A said:

for now, just worry about crossing the street. 

Don't worry. Submarines will sort this out. They pick you up at your front door and drive you over to the other site of the river or maybe straight down from BKK to HuaHin

[RafPinto]

On 6/15/2021 at 2:02 PM, Acharn said:

You know you've lived in Bangkok too long when you look both ways before crossing the sidewalk.

I even look up. Someone could fall from the sky (balcony).

[SCOTT FITZGERSLD]

if you look at buying real estate in thailand from merely ROI point of view - return on investment, than the right time to buy is NEVER.

the average return on property in the past 20 years, in USD, is around 3-4%.

if you add your savings on rent, it is another 3-4%.

so you better buy an investment portfolio that yields around 10% , and keep on renting.

this way you will not only get higher returns, but also will save on headechs and worries

like losing your visa or denied entry at the airport.

you can even buy a mutual fund that invests in thailand, they earned 11-12% annualy in the past 25 years.

 

[Caldera]

The fact that many developers keep building in Bangkok and that many people keep buying properties (leaving aside the, hopefully temporary, Covid decline) does not necessarily mean that Bangkok won't be under water in the not so distant future.

 

We already know that the Thai government isn't proactive, they would "simply" move the capital once it's inevitable. And let the private sector fend for itself, with a little handout here and there. Same as with the Covid crisis.

[Why Me]

9 hours ago, wordchild said:

There should be no fundamental reason why a well constructed and well maintained condo should lose value over time eg look at the many beautiful Manhattan co-ops which still look great 80 years after they were built.

Absolutely! Owned a 1-bed 1-bath condo in a 1920s building in the US. Beautiful hardwood floors, high ceilings, thick walls, old style heating that would rumble occasionally. Loved it. Only problem was it was ground level so of course I got burgled.

 

And I rent here in a well-maintained highrise built early 90s. Have had guests sneer at its age but, jeez, I wouldn't move if you paid me to newer buildings I saw when I was thinking to buy. Shoe box sized, cheap fittings, including one with a bathroom with a plastic bathtub that was asking millions.

Edited June 20, 2021 by Why Me

[Patong2021]

If one must purchase and can pay for the full amount without the bother of financing, then the purchase can be made now. I doubt the market will change over the next 6 months.  In  coming year, I expect

- Inflation will increase, which means interest rates will increase. If financing a purchase, the cost of borrowing will increase.

- As economy improves,  unit holders who held off on putting their units up for sale will flood the market. This should hold the costs of units down. The economy will rebound fast because  the  bricks and sticks are still there. There has been no physical damage, just a slow down of demand and it is bottled up, like water behind a dam in monsoon season ready to flow.

 -Increased interest rates will make some debt holders have tough time to pay debt service and may need to dump units. Other buyers will not be able to afford the purchase.

- Developers may not  be able to get funding or want to build when the market is over supplied. I can see few "affordable" units being built. This should eventually correct the excess supply on the market and then push prices back up.

 

The outlyer is Chinese buyers. most of the foreign purchases come from Chinese, especially the  more expensive units.  the Chinese have not been allowed to travel and probably wont travel freely before 2022. Until they do, the foreign sales market has lost the most important  customer. When Chinese come back, prices will jump fast. Watch the Chinese travel restrictions to see when the fun starts. Also, China will see economic impact of the pandemic. The western markers want to change from China supply to more safe supply. It will take time, but it will happen and when it does, the China economy will not be able to sustain the loss of the  customers. Also, Thailand will be one of the few countries to welcome China travelers. The China  vaccines are not accepted in the western world and until they are certified, China vaccinated travelers will be subject to testing and isolation.

 

 

Edited June 20, 2021 by Patong2021

[Genix]

To be fair, you're asking people on here and 99.99% are just purely speculating, might as well flip a coin. Even if someone sounds smart, unless it's what they actually spend time doing it or making money off of, should be taken with a grain of salt. 

 

Ideally go hang out around places where successful Thai real estate agents do in FB groups or wherever that is.

Look at what big companies or successful real estate moguls are doing, are they buying many condos or selling now? And if so, why? which places? what are they doing within your area you wanna buy a condo at? And so forth.

 

Only advise you should take from this thread is personal experiences, nothing else.

 

 

Edited June 22, 2021 by Genix

[realfunster]

On 6/15/2021 at 4:46 PM, spidermike007 said:

Only buy at 30-50% off last years prices. 

 

A friend of mine recently moved to Pattaya. He looked at condos in Jomtien. He walked into one of the nicest towers, looked at a 36th floor unit with panoramic views, and when he was quoted 28,000 a month, he offered 10,000. They settled on 13,000. He said the agent more or less admitted the building was nearly empty, and they could not rent or sell anything, at this time.

 

There are alot of projects in Bangkok, suffering the same fate. 

 

An owner renting out a property at a large discount is very different from an owner selling at a large discount. One provides at least some rental income during a difficult time, the other realizes a permanent capital loss.

 

Sure there will be the occasional fire sale, but as a general rule, I think you will be waiting until hell freezes over before you get a 30%+ sales discount. 

[spidermike007]

1 hour ago, realfunster said:

 

An owner renting out a property at a large discount is very different from an owner selling at a large discount. One provides at least some rental income during a difficult time, the other realizes a permanent capital loss.

 

Sure there will be the occasional fire sale, but as a general rule, I think you will be waiting until hell freezes over before you get a 30%+ sales discount. 

Just wait. I think this will be a worldwide phenomenon. Certain segments of the economy (the stock markets, some real estate markets in the US and Europe) are so over heated, they are due for a massive correction. And you can keep an economy cranked up on speed, with massive debt, and little to no interest loans, but eventually that is going to come down like a ton of bricks. Just wait. 

 

And the ramifications of the tourism sabotage taking place, in addition to the massive economic slowdown here, are going to be felt for many years to come. 

Edited June 26, 2021 by spidermike007

[Why Me]

36 minutes ago, spidermike007 said:

Certain segments of the economy (the stock markets, some real estate markets in the US and Europe) are so over heated, they are due for a massive correction.

I have been hearing prognostications of the end of the world for 10 years now. And ignoring them for 10 years now. And done very nicely thank you.