Bangkok Condos Are Getting More Expensive

[SiamSquare123]

a bunch of you have claimed that the market is going to decline, however more and more projects are launched every month and at higher prices.

the sukhothai residence will be priced around 200,000/m2 and there are several other projects in the 150-180,000/m2 range. A Condominium in the quiet Lad Prao area is coming in at 80,000/m2. A new condo on Suk 39 will start at 120,000/m2 for the lower floors and make its way higher.

So are any of you changing your forcast on the future of the Bangkok property market?

[JimsKnight]

Maybe, maybe, but don't forget some condos are ridiculously over-priced, especially when they are just being built. Once you've bought the thing you'll have to sit on it for xx amount of years for it to make you any money AND selling it can be problematic especially as condos are fine brand new but once they have a few years on them they become less desirable.

So 5 million baht in the flashy, snazy condo or 5 million baht in the bank printing me money each month in interest??

To the bank at once

[stevemiddie]

a bunch of you have claimed that the market is going to decline, however more and more projects are launched every month and at higher prices.

the sukhothai residence will be priced around 200,000/m2 and there are several other projects in the 150-180,000/m2 range. A Condominium in the quiet Lad Prao area is coming in at 80,000/m2. A new condo on Suk 39 will start at 120,000/m2 for the lower floors and make its way higher.

So are any of you changing your forcast on the future of the Bangkok property market?

There is a " bunch " of condo,s in Bang-na ( Bangkok ) called something like grandville.....greatville? Fully furnished and brand new. Condo,s have asking price of 80,000 baht per month. The new building has been complete now for over 8 months, and as of yesterday..................not one single rental. ALL empty.

Developers can ask what they want.............whether they rent or sell at the advertised price is another question altogether.

Despite all the " sold " signs..................no condo is EVER sold until ALL monies have been paid. They class as sold if they take a deposit. It does not mean they will receive the money in full.

Edited July 8, 2007 by stevemiddie

[SiamSquare123]

"Despite all the " sold " signs..................no condo is EVER sold until ALL monies have been paid. They class as sold if they take a deposit. It does not mean they will receive the money in full. "

you guys love to fall back on this but its just not true. once you put the deposit down you begin making payments.

[ya5702]

"Despite all the " sold " signs..................no condo is EVER sold until ALL monies have been paid. They class as sold if they take a deposit. It does not mean they will receive the money in full. "

you guys love to fall back on this but its just not true. once you put the deposit down you begin making payments.

In Singapore, which is probably the easiest, safest and most transparent place to conduct real estate deals in Asia, a sale is NOT a sale until the Caveat is lodged with the Government. Statistics for properties sold are reported monthly by the Government as "Private Residential Properties with Caveats lodged." See http://spring.ura.gov.sg/lad/ore/real_estate/transaction.cfm

Statistics (units and prices) in this URA website DO NOT include those transactions reported as "sold" by the Developers and Agents.

An absence of similar official statistics in Thailand makes good fodder for "hearsay" in Forums like ThaiVisa. But it makes enjoyable reading for me, however.

[quiksilva]

I dont think Bangna is a good yardstick for a discussion like this, who is honestly surprised that finding a tenant has turned out to be difficult in that location of all places? I wouldn't also be surprised to here of developers in that area (aka wealthy families with vacant plots who believe their time has come because of the new airport blah blah blah) going to the wall either.

The thing is Bangna will always be Bangna, okay maybe it will be better in 20+ years but in the meantime its an industrial location, with a few golf courses and decent housing estates. The only condos suitable out there are in the sub THB 1million sector and even then it will have to have decent access to the new BTS extension.

That's not to say that those in Bangkok's CBD have it easy, they dont, but condos there are certainly a lot easier to let than Bangna.

Ya5702, there are comparable stats here in Thailand too, for instance condo registration figures come from the Govt. [sarcasm]but who trusts the Junta... [/sarcasm off]

To get back to the OP yes some of the new places you mentioned really are asking for ever higher price points. I heard that Banyan Tree units (Sathorn) are selling quite well at THB200K psm (they are offering a fixed 6% yield for 6 years) I'd pass myself but with yields at 3.5-5% in developed markets here in Asia and even further afield I can see how it may appeal to some.

[Irene]

a bunch of you have claimed that the market is going to decline, however more and more projects are launched every month and at higher prices.

the sukhothai residence will be priced around 200,000/m2 and there are several other projects in the 150-180,000/m2 range. A Condominium in the quiet Lad Prao area is coming in at 80,000/m2. A new condo on Suk 39 will start at 120,000/m2 for the lower floors and make its way higher.

So are any of you changing your forcast on the future of the Bangkok property market?

It depends on the location. For me, I will stick to the condos in a brief walking distance to the rail stations only. Once a condo is empty and not earning rental, it is painful and doubly so when you have to pay monthly maintenace fees for an unoccupied property.

Another point is most condos are booked by speculators who expect capital gains when building is near completion. With good economy, this can be a good investment with least risk. I booked one unit two years ago of a five-star condos at the price of Baht 8.8 M and having paid 30% thereof, as advertised in the Post, there have been people trying to sell at a price of 13 M. This is another cause for the high price. So if there is a financial crash or an earthquake, then one could imagine the situation would revert to the 1997 position with empty and unfinished "see-through" buildings all over town.

In conclusion, do not be so sure of the high price which is not resulted in full from bona fide demand but in substantial part from a special sector of the community who specialises in taking this risk. If things go wrong, they just lose 30%. If it goes right, the chance of hefty profits is there. So far they have all succeeded. The speculative population is growing.

[trajan]

I heard that Banyan Tree units (Sathorn) are selling quite well at THB200K psm (they are offering a fixed 6% yield for 6 years) I'd pass myself but with yields at 3.5-5% in developed markets here in Asia and even further afield I can see how it may appeal to some.

do you mean the proposed "Sukhothai Residence" behind the Sukhothai Hotel on South Sathorn Road? is that a net yield? or gross yield? if net, that might be something to look at since those fixed deposits are only yielding about 4.5% (also subject to interest income withholding)....

[quiksilva]

Actually I heard it was the Banyan Tree, I dont have full details at the time of writing so cant confirm whether it is gross / net but will do so as soon as I know more.

[Livinginexile]

My Mrs was telling me they could'nt give away proprty around ths JJ market area a few years ago.

Apparantely now it's very hard to even to find one for sale.

It's become a very popular area to buy.

[trajan]

Actually I heard it was the Banyan Tree, I dont have full details at the time of writing so cant confirm whether it is gross / net but will do so as soon as I know more.

Oh I think you are referring to conversion of existing rooms in the Banyan Tree hotel in Sathorn's Thai Wah tower into condotel Banyan Tree residences? The brochure states conversion of 4 floors into 24 two bedroom units.....in exchange for your "club" (but not real estate) investment, you can stay in your type of condo for two months out of the year probably during low season days....with exchange stay rights at other resorts around the world PLUS you get a fixed return of 6% per year for 6 years OR a share of the actual room rentals to holiday-makers in Bangkok....

Im sure you will also need to pay annual premium common expenses and management fees so the net return is probably low unless you opt for a share of actual revenue and the vacancy rates are super low...

this sounds good if you want to use your apartment only occasionally and believe returns will be good from operations of the hotel/residence...

the downside is that its not really yours (and you cant "hang your hat", customize it or even leave your extra toothbrush in Bangkok waiting for your next visit)....

The Sukhothai Hotel is planning a brand new residence structure behind the hotel itself....

The St. Regis Hotel Residences are also now building on Rajadamri Road....

the new trend seems to be on the lines of hotel-affiliated residence clubs (like the Four Season Residences, the Ritz-Carlton Residences, etc.) or timeshares or vacation member clubs (like the Marriott Phuket Club)...

Edited July 9, 2007 by trajan

[pansted00]

"I booked one unit two years ago of a five-star condos at the price of Baht 8.8 M and having paid 30% thereof, as advertised in the Post, there have been people trying to sell at a price of 13 M. This is another cause for the high price. "

I am sorry but expecting a 40% return on an real estate investment in 2 years time is pure greed and the clear sign that people in Thailand mistake the real estate business with the casino.

[trajan]

"I booked one unit two years ago of a five-star condos at the price of Baht 8.8 M and having paid 30% thereof, as advertised in the Post, there have been people trying to sell at a price of 13 M. This is another cause for the high price. "

I am sorry but expecting a 40% return on an real estate investment in 2 years time is pure greed and the clear sign that people in Thailand mistake the real estate business with the casino.

I believe its a much higher return than 40% if someone is really able to sell at B13 million

If you paid 30% down in cash thats only B2,640,000 with the remaining 70% (B6,160,000) payable in future ot the developer on completion....

If you sell your contract for B 13 million, then the buyer will hand over to you now B6,840,000 (with the remaining B6,160,000 paid to the developer in future)

therefore you get B6,840,000 for the initial B2,640,000 cash outlay (not taking into consideration any contract transfer fees)....now that's a better bet than banc or player in baccarat BUT it relies on someone actually agreeing to pay B13 mil!

[pansted00]

"I booked one unit two years ago of a five-star condos at the price of Baht 8.8 M and having paid 30% thereof, as advertised in the Post, there have been people trying to sell at a price of 13 M. This is another cause for the high price. "

I am sorry but expecting a 40% return on an real estate investment in 2 years time is pure greed and the clear sign that people in Thailand mistake the real estate business with the casino.

I believe its a much higher return than 40% if someone is really able to sell at B13 million

If you paid 30% down in cash thats only B2,640,000 with the remaining 70% (B6,160,000) payable in future ot the developer on completion....

If you sell your contract for B 13 million, then the buyer will hand over to you now B6,840,000 (with the remaining B6,160,000 paid to the developer in future)

therefore you get B6,840,000 for the initial B2,640,000 cash outlay (not taking into consideration any contract transfer fees)....now that's a better bet than banc or player in baccarat BUT it relies on someone actually agreeing to pay B13 mil!

Your are very correct.

Obviously tolerating such practices of flipping can only fuel a speculative bubble.

The saving grace for the Bangkok market , at least for the high end of the market , is that it is still relatively cheap compared to markets like Singapore or HK ( even if the infrastructure and overall quality of construction is not fully comparable) .

But with such practices, this cannot remain true for much longer.

[think_too_mut]

A small 1BR condo we are in was 4.6 mil baht 1 year ago.

Then, 3.7 mil.

Now, 3.5 mil. Just about what it was in 2002. when the now building was a flat plot of land.

Tens and tens of thousands of dormant properties around. Need lots of time to reject what I don't want to see.

[Livinginexile]

A small 1BR condo we are in was 4.6 mil baht 1 year ago.

Then, 3.7 mil.

Now, 3.5 mil. Just about what it was in 2002. when the now building was a flat plot of land.

Tens and tens of thousands of dormant properties around. Need lots of time to reject what I don't want to see.

Can you tell us what this development is called and it's location?

Low quality condo's in poor locations allways depreciate in Bangkok.

High quality condo's in good locations allways apreciate. These are the facts.

We have asked you many times this same question thingtoomut, but you refuse to tell us.

I think there is an obvious reason your condo has lost money.

[Fred Sanford]

I cant see a 1br 4.6 mil condo being low quality condo in a bad location

[SiamSquare123]

well there are actually 10 mill condos sold in 05 selling for 5 million now, just dont ask me for their name or location so you check if i am just talking out of my anus.

[solo siam]

Maybe, maybe, but don't forget some condos are ridiculously over-priced, especially when they are just being built. Once you've bought the thing you'll have to sit on it for xx amount of years for it to make you any money AND selling it can be problematic especially as condos are fine brand new but once they have a few years on them they become less desirable.

So 5 million baht in the flashy, snazy condo or 5 million baht in the bank printing me money each month in interest??

To the bank at once

Would the interest cover your rent though?

[quiksilva]

Actually I heard it was the Banyan Tree, I dont have full details at the time of writing so cant confirm whether it is gross / net but will do so as soon as I know more.

Oh I think you are referring to conversion of existing rooms in the Banyan Tree hotel in Sathorn's Thai Wah tower into condotel Banyan Tree residences? The brochure states conversion of 4 floors into 24 two bedroom units.....in exchange for your "club" (but not real estate) investment, you can stay in your type of condo for two months out of the year probably during low season days....with exchange stay rights at other resorts around the world PLUS you get a fixed return of 6% per year for 6 years OR a share of the actual room rentals to holiday-makers in Bangkok....

Im sure you will also need to pay annual premium common expenses and management fees so the net return is probably low unless you opt for a share of actual revenue and the vacancy rates are super low...

this sounds good if you want to use your apartment only occasionally and believe returns will be good from operations of the hotel/residence...

the downside is that its not really yours (and you cant "hang your hat", customize it or even leave your extra toothbrush in Bangkok waiting for your next visit)....

The Sukhothai Hotel is planning a brand new residence structure behind the hotel itself....

The St. Regis Hotel Residences are also now building on Rajadamri Road....

the new trend seems to be on the lines of hotel-affiliated residence clubs (like the Four Season Residences, the Ritz-Carlton Residences, etc.) or timeshares or vacation member clubs (like the Marriott Phuket Club)...

Thanks Trajan, yes I believe this is targeted at those who are purely buying as an investment. Frankly I'd rather see pure investors look at something like this rather than the condo market. In fact its healthier for both I think, plus by virtue of its brand it virtually guarantees that it will be well managed.

Ok its not a direct real estate investment, and I would certainly not even suggest timeshares/condotels (call them what you will) as an avenue for investment, but with management firms of this pedigree it could be worth looking into.

[think_too_mut]

A small 1BR condo we are in was 4.6 mil baht 1 year ago.

Then, 3.7 mil.

Now, 3.5 mil. Just about what it was in 2002. when the now building was a flat plot of land.

Tens and tens of thousands of dormant properties around. Need lots of time to reject what I don't want to see.

Can you tell us what this development is called and it's location?

Low quality condo's in poor locations allways depreciate in Bangkok.

High quality condo's in good locations allways apreciate. These are the facts.

We have asked you many times this same question thingtoomut, but you refuse to tell us.

I think there is an obvious reason your condo has lost money.

There is no my condo in BKK. I rent to see how the brand new building turns out. The building is great (as another poster said, 4.6 mil for 1BR condo in 2002. can not be bad), sitting next to BTS.

The reason I am not buying (even condos at reduced price in the building) is something that can hardly be spotted on inspection: the pool does not receive much sun and is ice cold 6 months a year.

Now, 4.6 mil baht in Oz bank pays the rent every month. When the contract expires, I will move on and leave the cold pool to Bangkok ice skaters.

As for the address, if you press harder I may post a link to the building, my family pictures and other details you might want to know.

[SiamSquare123]

bts location of condominium please. is it an 'invisible condominium'.

[Irene]

"I booked one unit two years ago of a five-star condos at the price of Baht 8.8 M and having paid 30% thereof, as advertised in the Post, there have been people trying to sell at a price of 13 M. This is another cause for the high price. "

I am sorry but expecting a 40% return on an real estate investment in 2 years time is pure greed and the clear sign that people in Thailand mistake the real estate business with the casino.

I don't think you get my message. I tried to explain why the condos have shot up so much. It is this sector of the speculators that have forced up the price. I do not belong to this category of going for quick profit but more for rental income and future capital gain which todate has proved to be realistic especially in the proximity of the rail stations. Around that area, in future there will be limited supply of land. With that scenario, the gain in future will be far more than the present gain.

I put in this posting not to boast or to justify the gain but like to let others to have the indepth knowledge of how the market is working. This is a give back to this webboard for what it has given me so much of other people's indepth education.

[trajan]

Thanks Trajan, yes I believe this is targeted at those who are purely buying as an investment. Frankly I'd rather see pure investors look at something like this rather than the condo market. In fact its healthier for both I think, plus by virtue of its brand it virtually guarantees that it will be well managed.

Ok its not a direct real estate investment, and I would certainly not even suggest timeshares/condotels (call them what you will) as an avenue for investment, but with management firms of this pedigree it could be worth looking into.

yes, I agree, if someone is looking for pure investment, this type of product would be a better bet because of the experience and quality level of a manager like Banyan Tree and also the fact that they would take care of all matters, such as fit-out, repairs, day-to-day tenant issues, services, paperwork etc..

However, two main issues would concern me (especially in light of the premium price paid)....(a) the contractual longevity (or locked-in nature) of the manager actually managing the property (is the management term short or is there a walk-away clause in the management contract (between Banyan and the overall real property owner etc.)); and (b ) after such management contract expires or prematurely terminates (10, 20 yrs?) I (as just a residence club member) would have no asset to sell (or enjoy)...

for B200K psm (which is at the top range for condo freehold purchases in Bangkok), I would rather want a condo title deed (plus sign up as a Banyan Tree Residence Club member)...in turn they could take over management with a fee sharing arrangement (on rental income) and limited use right for vacations....after the management agreement (and the Banyan Tree Residence Club contract) terminates or naturally expires...I would still have a condo....

Edited July 10, 2007 by trajan

[think_too_mut]

bts location of condominium please. is it an 'invisible condominium'.

Take a ride and guess....I'll be telling you "hot" ..."cold"