New High End Condos

[samtam]

I am wondering if others can share some insight into why the rumoured prices for some of the new "super luxury" developments in the condo market are being touted at around THB200,000 psm. I am thinking specifically of The Sukhothai Residences, and 185 Rajadamri. I am wondering who will buy developments at these prices? Assuming 51% are Thai buyers, would the potential 49% of foriegners want to spend USD1m+ on property in a country where this so much uncertainty regarding political developments, (no election date fixed, no certain outcome, marshal law, high value baht, uncertain immigration laws etc). I know that THB200k psm is still a lot less than Hong Kong, Singapore or London, but these cities are in first world countries.

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

This is unless of course there is huge pent-up demand for property, which is waiting to explode upwards once the political situation eases.

[Prakanong]

I am wondering if others can share some insight into why the rumoured prices for some of the new "super luxury" developments in the condo market are being touted at around THB200,000 psm. I am thinking specifically of The Sukhothai Residences, and 185 Rajadamri. I am wondering who will buy developments at these prices? Assuming 51% are Thai buyers, would the potential 49% of foriegners want to spend USD1m+ on property in a country where this so much uncertainty regarding political developments, (no election date fixed, no certain outcome, marshal law, high value baht, uncertain immigration laws etc). I know that THB200k psm is still a lot less than Hong Kong, Singapore or London, but these cities are in first world countries.

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

This is unless of course there is huge pent-up demand for property, which is waiting to explode upwards once the political situation eases.

Just a thought

It might be better to buy in Singapore - rent it out and rent in BKK on the proceeds - you then know you have a resale value which will increase quite a bit and security!

[midas]

Just a thought

It might be better to buy in Singapore - rent it out and rent in BKK on the proceeds - you then know you have a resale value which will increase quite a bit and security!

Yes exactly - particularly with yet again new visa laws as of 1st September - at this rate

the potential market as far farang buyers is concerned is starting to shrink even further

- in any price category

[trajan]

there must be some kind of demand for the top of the lines, because for the Sukhothai, there are paid (Baht 300K each) waiting lists already filling up.....

I am wondering if others can share some insight into why the rumoured prices for some of the new "super luxury" developments in the condo market are being touted at around THB200,000 psm. I am thinking specifically of The Sukhothai Residences, and 185 Rajadamri. I am wondering who will buy developments at these prices? Assuming 51% are Thai buyers, would the potential 49% of foriegners want to spend USD1m+ on property in a country where this so much uncertainty regarding political developments, (no election date fixed, no certain outcome, marshal law, high value baht, uncertain immigration laws etc). I know that THB200k psm is still a lot less than Hong Kong, Singapore or London, but these cities are in first world countries.

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

This is unless of course there is huge pent-up demand for property, which is waiting to explode upwards once the political situation eases.

[think_too_mut]

there must be some kind of demand for the top of the lines, because for the Sukhothai, there are paid (Baht 300K each) waiting lists already filling up.....

Maybe not? They all started building before the turmoil or were so advanced into it they could not stop.

Now they need some fluffies (many have packed up, according to their no-show on this site) to try to sell it.

Along the Suk, there are numerous signs "62,000B sqm". Was it not 80K + baht 1 year ago?

From Ekkamai to On Nut there are at least 20 new developments at various stages of incompleteness - from clean blocks of land (and big sales ad) or at some stage of construction.

[chownah]

Could it be that if you are not going to find any buyers because the market is depressed then you might as well just up the price by some substantial percentage to increase your "exclusivity" level and also to let you give substantial "discounts" to keep potential buyers happy?

[Moonfruit]

I am wondering if others can share some insight into why the rumoured prices for some of the new "super luxury" developments in the condo market are being touted at around THB200,000 psm. I am thinking specifically of The Sukhothai Residences, and 185 Rajadamri. I am wondering who will buy developments at these prices? Assuming 51% are Thai buyers, would the potential 49% of foriegners want to spend USD1m+ on property in a country where this so much uncertainty regarding political developments, (no election date fixed, no certain outcome, marshal law, high value baht, uncertain immigration laws etc). I know that THB200k psm is still a lot less than Hong Kong, Singapore or London, but these cities are in first world countries.

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

This is unless of course there is huge pent-up demand for property, which is waiting to explode upwards once the political situation eases.

Just a thought

It might be better to buy in Singapore - rent it out and rent in BKK on the proceeds - you then know you have a resale value which will increase quite a bit and security!

Exactly what we are doing! Plus, as many Thai friends as i can convince!

[Heng]

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

A lot of folks like to have a safe place where they can hang out and order in when they roll out the tanks from time to time.

[pkrv]

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

A lot of folks like to have a safe place where they can hang out and order in when they roll out the tanks from time to time.

I hear the double glazing cuts down on the noise of the tank tracks on the road.

Heng - you have a wicked sense of humour.

All fun aside full, fully armed, British army formations were deployed in central London (in the back streets) to back up the police under the poll tax riots (under Thatcher), no superiority from the UK on this issue.

Edited September 3, 2007 by pkrv

[Prakanong]

I am wondering if others can share some insight into why the rumoured prices for some of the new "super luxury" developments in the condo market are being touted at around THB200,000 psm. I am thinking specifically of The Sukhothai Residences, and 185 Rajadamri. I am wondering who will buy developments at these prices? Assuming 51% are Thai buyers, would the potential 49% of foriegners want to spend USD1m+ on property in a country where this so much uncertainty regarding political developments, (no election date fixed, no certain outcome, marshal law, high value baht, uncertain immigration laws etc). I know that THB200k psm is still a lot less than Hong Kong, Singapore or London, but these cities are in first world countries.

For Thais with this sort of money, when there is a limited market for re-sale, what is the attraction for them?

This is unless of course there is huge pent-up demand for property, which is waiting to explode upwards once the political situation eases.

Just a thought

It might be better to buy in Singapore - rent it out and rent in BKK on the proceeds - you then know you have a resale value which will increase quite a bit and security!

Exactly what we are doing! Plus, as many Thai friends as i can convince!

In the condo I rent it was 800SGD a square foot when I moved in - the landlady paid 750 SGD - the last units are now 1300 SGD - this is since last October.

I pay the equivalent of 60k THB a month but if I were to sign a lease now it would be at least 90 K

So buying a condo here last September would have made you a tidy profit plus have 60k to rent in BKK

[tracer5050]

I was looking but may be better to wait . I think over building might find so deals

[UnknownPoster]

Should be able to get a good deal if you go make some low offers.

Places were selling at 50k/meter 6 years ago.

Some sellers would be happy to break even I think.

[tracker]

it is not that difficult; a global recession is looming (my own opinion), so, if you got a lot of usd, which will drop a lot in value in the coming recession, why not put it in something that will hold value better then the money itself?

[backflip]

"I am wondering if others can share some insight into why the rumoured prices for some of the new 'super luxury' developments in the condo market"

Why not go to the sales office, and speak to the condo developer? If you can ask us "Why do you think you can charge 200KTHB/sqm, when there are plenty of codos available for 60KTHB/sqm?", you can certainly ask them. Be sure to tell us what they say.

[quiksilva]

there must be some kind of demand for the top of the lines, because for the Sukhothai, there are paid (Baht 300K each) waiting lists already filling up.....

Maybe not? They all started building before the turmoil or were so advanced into it they could not stop.

Now they need some fluffies (many have packed up, according to their no-show on this site) to try to sell it.

Along the Suk, there are numerous signs "62,000B sqm". Was it not 80K + baht 1 year ago?

Yes the average price of projects being released a year ago was 80K plus, this year many more developers (but not all) have switched tactics and are aiming at the lower income groups that have until recently not really received all that much attention from developers.

So, yes of course you will see lower prices being advertised, perhaps even more projects at lower prices but this is not for the same class of property. Before implying that prices have declined be sure that you have compared apples with apples, because the quality of many of these new projects is relatively poorer too.

This is not a Soviet state, if a developer can sell units at 250,000 psm they will, and why not? Like the good capitalists we all are developers tend to want to maximise profits and undertake many successful projects.

As is so often said on this forum, property is only worth what someone will pay for it. If they are not selling units, developers will change tactics (introduce promotions etc), because after all they must sell units to service their debt and their meet obligations to shareholders. Likewise if they have recorded a reasonable amount of sales at their quoted levels you can be sure that they will stick to their plan and see it through.

The fact that you don't think the properties are worth the quoted prices is inconsequential, just so long as someone else, who perhaps they places more value in the Sukothai brand than you do, does.

You know the types, these are the same people may also prefer to wear Gucci, Armani etc and are very happy about paying through the nose for them too, or perhaps they may believe that they can attract Gucci underpant wearing tenants happy to rent their swish units at what might seem like incredibly high rents (as we might perceive them).

Then what about those people who travel regularly to Bangkok, and always stay at 5 star hotels. Perhaps they have become accustomed to their service but for the amount of money spent on hotels they could probably afford to buy instead, so why not own a room that friends and family (who may also like Gucci underpants) can use too?

If you are curious about the size of that market consider how many 1 million $ villas have been sold in Phuket, and then consider how many condo projects in Bangkok provide comparable quality.

Edited September 4, 2007 by quiksilva

[Heng]

This is not a Soviet state, if a developer can sell units at 250,000 psm they will, and why not? Like the good capitalists we all are developers tend to want to maximise profits and undertake many successful projects.

The fact that you don't think the properties are worth the quoted prices is inconsequential, just so long as someone else, who perhaps they places more value in the Sukothai brand than you do, does.

Pretty good summary of these types of threads.

Something like the above should be pinned to the top of more than a few sections of TV regarding the economics of home/property purchases, automobiles, food/wine/and of course cheese in the LOS under "There's always a bigger fish, and sometimes/often it isn't you."

[UnknownPoster]

The best units in top of the line projects will always attract buyers.

Some folks have so much money that everything is inexpensive.

[midas]

there must be some kind of demand for the top of the lines, because for the Sukhothai, there are paid (Baht 300K each) waiting lists already filling up.....

Maybe not? They all started building before the turmoil or were so advanced into it they could not stop.

Now they need some fluffies (many have packed up, according to their no-show on this site) to try to sell it.

Along the Suk, there are numerous signs "62,000B sqm". Was it not 80K + baht 1 year ago?

Yes the average price of projects being released a year ago was 80K plus, this year many more developers (but not all) have switched tactics and are aiming at the lower income groups that have until recently not really received all that much attention from developers.

So, yes of course you will see lower prices being advertised, perhaps even more projects at lower prices but this is not for the same class of property. Before implying that prices have declined be sure that you have compared apples with apples, because the quality of many of these new projects is relatively poorer too.

This is not a Soviet state, if a developer can sell units at 250,000 psm they will, and why not? Like the good capitalists we all are developers tend to want to maximise profits and undertake many successful projects.

As is so often said on this forum, property is only worth what someone will pay for it. If they are not selling units, developers will change tactics (introduce promotions etc), because after all they must sell units to service their debt and their meet obligations to shareholders. Likewise if they have recorded a reasonable amount of sales at their quoted levels you can be sure that they will stick to their plan and see it through.

The fact that you don't think the properties are worth the quoted prices is inconsequential, just so long as someone else, who perhaps they places more value in the Sukothai brand than you do, does.

You know the types, these are the same people may also prefer to wear Gucci, Armani etc and are very happy about paying through the nose for them too, or perhaps they may believe that they can attract Gucci underpant wearing tenants happy to rent their swish units at what might seem like incredibly high rents (as we might perceive them).

Then what about those people who travel regularly to Bangkok, and always stay at 5 star hotels. Perhaps they have become accustomed to their service but for the amount of money spent on hotels they could probably afford to buy instead, so why not own a room that friends and family (who may also like Gucci underpants) can use too?

If you are curious about the size of that market consider how many 1 million $ villas have been sold in Phuket, and then consider how many condo projects in Bangkok provide comparable quality.

I think we understand all about paying through the nose for brand products

I think what the OP was getting is that the chances of the number of

potential foreign buyers shrinking significantly is increasing week by week -

i.e. a month ago many unhappy foreign investors wrote on this board how unhappy

they were following an attempt to introduce the Foreign Business Act.

Last weekend it was the shock of hearing about

the significant change to retirement visas's .......... so there is no doubt there will be fewer foreigners

around to buy these properties. Sure the Thai's themselves might prop up the market

on their own but then again when you read some of the headlines in the Bangkok Post

regarding the state of the economy at this point in time, there will only be so many

potential Thai purchasers around at end of the day who " value the Sukothai brand "

- and there will be an awful lot of condo's out there to buy or rent

And when you say " If you are curious about the size of that market consider how many 1 million $ villas have been sold in Phuket, and then consider how many condo projects in Bangkok provide comparable quality "

dont forget the visa and investment landscape in LOS has changed a lot since those days - in fact

just in the last FEW MONTHS

[quiksilva]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

Certainly the number of purely foreign buyers has decreased in recent months, I can't and won't argue with that, but that doesn't mean that everybody has been scared off, far from it.

[palm]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

They haven't. People who can't afford to show 800k in a bank account, are not buying 15m baht condos with cash.

I recently bought another condo in lower Suk. It appears most of the foreign buyers in that new development (completion is in about 18 months) are Chinese, Thai/Chinese, Indians and Japanese. Another one I am looking at (Narai's new huge condo near Lumphini) has apparently the same sales demographics (Asians).

No old, fat Western sex-pats at all (thank goodness).

[Prakanong]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

They haven't. People who can't afford to show 800k in a bank account, are not buying 15m baht condos with cash.

I recently bought another condo in lower Suk. It appears most of the foreign buyers in that new development (completion is in about 18 months) are Chinese, Thai/Chinese, Indians and Japanese. Another one I am looking at (Narai's new huge condo near Lumphini) has apparently the same sales demographics (Asians).

No old, fat Western sex-pats at all (thank goodness).

If you are such a smart hard nosed businessman like you like to shout about on an anonymous forum why are you buying multiple condo's in Thailand when spending say 70-100 million THB on a single HK or Singapore condo would bring you better returns on both rental and capital gain?

Irrational exuberance perhaps?

[midas]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

Certainly the number of purely foreign buyers has decreased in recent months, I can't and won't argue with that, but that doesn't mean that everybody has been scared off, far from it.

Ok just one example came up this afternoon - a 59-year-old well-off American

married to a 46 year old Japanese wife - she cannot qualify for a retirement visa

whereas before they both lived here comfortably under his retirement visa.

They have already decided to sell up and move from Thailand not only because

getting the visa for the wife is now very difficult if not impossible but this is not the point

! There seem to be many people in this category so not only is this category of

expat being forced out meaning they will not be buying anymore condos

in Bangkok ( in fact they will be selling !!! ) but more than anything there

is now a very negative sentiment creeping in. likes the The Water Torture -

drip, drip, drip .........

[midas]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

They haven't. People who can't afford to show 800k in a bank account, are not buying 15m baht condos with cash.

I recently bought another condo in lower Suk. It appears most of the foreign buyers in that new development (completion is in about 18 months) are Chinese, Thai/Chinese, Indians and Japanese. Another one I am looking at (Narai's new huge condo near Lumphini) has apparently the same sales demographics (Asians).

No old, fat Western sex-pats at all (thank goodness).

If you are such a smart hard nosed businessman like you like to shout about on an anonymous forum why are you buying multiple condo's in Thailand when spending say 70-100 million THB on a single HK or Singapore condo would bring you better returns on both rental and capital gain?

Irrational exuberance perhaps?

Yes that is an interesting question

[Gary A]

I guess I associate with the wrong crowd. I know many farangs who either have a difficult time putting 800,000 baht in a Thai bank or if they have it, being comfortable actually doing it. I don't know a single one who would even consider buying an 8 million baht condo. That said, I doubt that the Thai elite make up more than a 1/10 of 1 percent of the population and I really can't see those people living in a condo. It will be interesting to see just how many of those complexes are ever even finished. If I did have mega money and wanted an expensive condo, no way would I buy pre construction. I'd guess that most of the people who actually earned their money and didn't steal or inherit it are pretty savvy. I just don't see them taking too many chances with hard earned cash.

[ThaiWanderer68]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

They haven't. People who can't afford to show 800k in a bank account, are not buying 15m baht condos with cash.

I recently bought another condo in lower Suk. It appears most of the foreign buyers in that new development (completion is in about 18 months) are Chinese, Thai/Chinese, Indians and Japanese. Another one I am looking at (Narai's new huge condo near Lumphini) has apparently the same sales demographics (Asians).

No old, fat Western sex-pats at all (thank goodness).

800k is for retirement visas. Not all HNWI are retired.

Would agree with Prakanong that real HNWI aren't buying heavily into Thailand at the moment. Generally off the radar screen and much better on offer elsewhere. Wannabe's maybe...

i.e Smart money is not in Thai Real Estate at the moment. It hasn't been there in the last year or so either. eg 40%+ returns have been available in Singapore Real Estate. That's before even considering other asset classes. eg Chinese stockmarket funds, some 100%+ over 1 year. Even SET has outstripped property returns.

I very much doubt anyone has been getting a decent return in Thailand property in the last year. So anyone putting money into Thai property has effectively been missing out elsewhere in terms of market timing on investments. You won't be seeing significant property rises or a property boom in the next year or so either, so there'll be plenty of time to buy Thai.

[jonniebkk]

Last weekend it was the shock of hearing about

the significant change to retirement visas's .......... so there is no doubt there will be fewer foreigners

around to buy these properties.

Changes, what changes...did I fall asleep for a few moments and miss something important???

[Gary A]

Yes but how have recent visa changes affected a high net worth foreigner's ability to acquire a condominium?

They haven't. People who can't afford to show 800k in a bank account, are not buying 15m baht condos with cash.

I recently bought another condo in lower Suk. It appears most of the foreign buyers in that new development (completion is in about 18 months) are Chinese, Thai/Chinese, Indians and Japanese. Another one I am looking at (Narai's new huge condo near Lumphini) has apparently the same sales demographics (Asians).

No old, fat Western sex-pats at all (thank goodness).

800k is for retirement visas. Not all HNWI are retired.

Would agree with Prakanong that real HNWI aren't buying heavily into Thailand at the moment. Generally off the radar screen and much better on offer elsewhere. Wannabe's maybe...

i.e Smart money is not in Thai Real Estate at the moment. It hasn't been there in the last year or so either. eg 40%+ returns have been available in Singapore Real Estate. That's before even considering other asset classes. eg Chinese stockmarket funds, some 100%+ over 1 year. Even SET has outstripped property returns.

I very much doubt anyone has been getting a decent return in Thailand property in the last year. So anyone putting money into Thai property has effectively been missing out elsewhere in terms of market timing on investments. You won't be seeing significant property rises or a property boom in the next year or so either, so there'll be plenty of time to buy Thai.

How many people who can afford an eight million baht condo are under fifty? How many VERY wealthy people do you know who are under fifty. (Not counting drug dealers who haven't been caught yet).

[ThaiWanderer68]

How many people who can afford an eight million baht condo are under fifty? How many VERY wealthy people do you know who are under fifty. (Not counting drug dealers who haven't been caught yet).

Don't want to go into my own finances, as I prefer a more modest approach than someone like Palm. But to try and answer:

1) Check out how many under 50's there are in the world's richest 500. You'll find the answer is in 3 digits. This extends all the way down any wealth list. Sure there are more HNWI over 50 than under 50 in almost every country. The point made was simply that not all HNWI are retired, (nor over 50 for that matter).

2) Assuming we're talking about Thailand only. Personally I know quite a lot of people under 50 with THB 8mio+ condos. That said I know even more people that don't have. If I count friends in Singapore who have bought a condo, virtually all are over THB8mio. You can't buy a decent condo in Singapore for less than THB 8mio.

BTW check out the TV forum carefully in more detail and you'll see a lot of people under 50 who paid 8mio+. There's also a survey on one of the threads of how much people spent.

Edited September 4, 2007 by ThaiWanderer68

[samtam]

Would agree with Prakanong that real HNWI aren't buying heavily into Thailand at the moment. Generally off the radar screen and much better on offer elsewhere. Wannabe's maybe...

i.e Smart money is not in Thai Real Estate at the moment. It hasn't been there in the last year or so either. eg 40%+ returns have been available in Singapore Real Estate. That's before even considering other asset classes. eg Chinese stockmarket funds, some 100%+ over 1 year. Even SET has outstripped property returns.

I very much doubt anyone has been getting a decent return in Thailand property in the last year. So anyone putting money into Thai property has effectively been missing out elsewhere in terms of market timing on investments. You won't be seeing significant property rises or a property boom in the next year or so either, so there'll be plenty of time to buy Thai.

Thanks. This is really my point. I don't question that there are people who can afford to spend USD1-2million on a condo in Bangkok, but what I do question is whether this is the right time to be doing it, given the returns elsewhere, with more mature markets where a "secondary market" is the norm. Also, spending USD2m in Bangkok is quite different from Phuket, where this is amount is quite small fry. This level (of THB200k psm) )is totally new in Bangkok. I was personally interested in the Sukhothai Residences, (I like the brand very well), but I worry exactly what I'm getting into in terms of return/resale, (and I'm not talking about flipping).

Edited September 4, 2007 by samtam

[Moonfruit]

My answer is that yes, they (Sukhothai, maybe Raimon Land with The River) are trying to raise the bar. Exactly how far they can raise the bar i dont know, but 200,000/sqm is a 33% rise over the cost of the nearest priced Grade A development. My gut feeling is that they are just trying it out. Its Marketing, but i guess we wont know until we can all see the finished product.

Im really not sure that they can make the boat float with those prices, but it sure will be interesting to see.

Bangkok/Thailand used to offer value for money, and that wass much of the attraction to foreign buyers. At those prices, with the local infrastructure, that value for money has long disappeared. Comparable property in many other markets offers comparable prices without all the headaches of other worries in Thailand.