Developer Says Property Boom Will Come After Election

[george]

Preuksa sees boom

BANGKOK: -- Property developer Preuksa Real Estate has more than 34 residential projects worth Bt20 billion on its drawing boards for next year.

CEO and managing director Thongma Vijitpongpun said there were signs of strong growth coming in the property market.

Its two foreign projects are in India and Vietnam, while the rest are in Bangkok.

It has appointed India's ICICI Bank to research demand in Bangalore and Bombay. This will help the company design and develop projects that meet home-buyer demand.

In Vietnam, the company is looking to win a contract in Ho Chi Minh City that commences next year.

The Indian and Vietnamese projects total about Bt2 billion. Next year's total spending will be Bt12.35 billion.

Thongma said home-buyer confidence would improve following the December 23 election. Many potential buyers have delayed making purchases during the past year.

The company believes residential projects will receive positive feedback in this year's fourth quarter and next year.

Preuksa announced revenue of Bt6.15 billion for a net profit of Bt804 million in the first nine months of this year, up 4 per cent and down 17 per cent, respectively, year on year.

"Our strong sales growth is better than the market, but our net profit is lower, because construction costs increased. But we cannot increase prices, because the market is very competitive," he said.

Thongma said that about 50,000 residential units would be sold this year, roughly the same as last year. But next year will see an increase of 5-10 per cent.

Preuksa builds for middle- to high-income earners, selling single-detached houses for between Bt2.2 million and Bt5 million.

It offers single-detached houses for middle to lower-income earners priced at Bt1.8 million to Bt2.2 million. Units at Preuksa Ville for lower-income earners sell for Bt1 million to Bt1.4 million. Baan Preuksa offers townhouses for under Bt1 million.

It has a condominium unit called The Ivy, with units priced at Bt1.4 million to Bt5 million. New developments to come on stream by the end of next month include The Plant, where inner-city detached houses will be available for Bt2.5 million to Bt5 million.

The Connect estate has centrally located townhouses for Bt1.4 million to Bt2 million, while The Seed condominiums are priced at Bt800,000 to Bt1.4 million per unit.

City Ville condominiums cost less than Bt1 million, while The Tree units are go for between Bt1 million and Bt1.5 million. Thongma said the company now built for all market segments except luxury residential.

"We believe housing priced between Bt1 million and Bt5 million is the largest market, and as a result we are focusing on it this year and next. However, if we see potential in luxury residential, then we might enter that market," he said.

--The Nation 2007-11-13

[cclub75]

"We believe housing priced between Bt1 million and Bt5 million is the largest market, and as a result we are focusing on it this year and next. However, if we see potential in luxury residential, then we might enter that market," he said.

I love those kind of "forecasts" and market studies.

1 to 5 millions ? Yes indeed, it's the largest market... Even a child without a pen could say the same.

It's like to say "After days of hard work and deep analysis, I came to the conclusion that the market for cars is between 0,5 and 15 millions THB".

As for the regular mantra "after the elections... the boom", I think we could have another type of... boom.

The more violent kind.

[norrona]

until the government clarify exactly whether it is illegal or not for a foreigner to own a house through a company, or illegal to put a house in your thai wifes name when it is your money or just relax the whole ownership thing completely there will never be a recovery of the housing market in thailand.

there needs to be guidelines set by the government and announced so they can't back track before proper investment feels secure there, lot of yanks still remember the land grab that happened in mexico and theres a big possibility that could happen again somewhere else.

there's always going to be buyers in thailand whilst theres women there interested in round eyed big walleted farangs, those are lifestyle buyers who are mostly edging towards retirement if not already in it and just want somewhere to rest their <deleted>.

proper investment needs a stable government and proper rules that are recognized globally, not just in the bangkok post or the nation

[pkrv]

until the government clarify exactly whether it is illegal or not for a foreigner to own a house through a company, or illegal to put a house in your thai wifes name when it is your money or just relax the whole ownership thing completely there will never be a recovery of the housing market in thailand.

there needs to be guidelines set by the government and announced so they can't back track before proper investment feels secure there, lot of yanks still remember the land grab that happened in mexico and theres a big possibility that could happen again somewhere else.

there's always going to be buyers in thailand whilst theres women there interested in round eyed big walleted farangs, those are lifestyle buyers who are mostly edging towards retirement if not already in it and just want somewhere to rest their <deleted>.

proper investment needs a stable government and proper rules that are recognized globally, not just in the bangkok post or the nation

I agree, this does need to be resolved - however I hate it when Condominium issues and House issues are mixed, we each have our own problems to deal with.

I note that the comment

"It has a condominium unit called The Ivy, with units priced at Bt1.4 million to Bt5 million" would be of interest to some posters, but have no idea where it is nor find a web site - not exactly good marketing.

India - NO - big time

Edited November 13, 2007 by pkrv

[TonyLeung]

i think a property boom is very unlikely given the global economies current problems.

[johnnyk]

For real estate developers/sellers its always "ä great time to buy".

Market going off the cliff? Buy now, there are great deals out there!

Market skyrocketing? Buy now, it'll be much more expensive next week!

norrona, I think Thai developers mainly care about the much larger and permanent Thai market than the falang.

[PadThaiGuy]

"Developer Says Property Boom Will Come After Election"

Yea...and I had a whore house owner tell me their is no AIDS in Thailand....

[Beardog]

For real estate developers/sellers its always "ä great time to buy".

Market going off the cliff? Buy now, there are great deals out there!

Market skyrocketing? Buy now, it'll be much more expensive next week!

norrona, I think Thai developers mainly care about the much larger and permanent Thai market than the falang.

Yes johnny isn't that always the truth , in sales you always want to create urgency AS THE PRICE WILL BE SKYROCKETING TOMORROW!

If this were true no one would even want to take a chance in the stock market or the Casino's & be selling property!

We all wish it were true.....Things that make you go Hmm

Beardog

[quiksilva]

An election should at least go some way towards clearing up some of the uncertainty and so it will help the move forwards as this would be a big step towards the restoration of confidence in the market.

However, an elected government in place will not automatically mean that everyone will be satisfied on December 24th. Once in, whoever is in charge will have to prove their worth on the national and crucially the international stage before confidence starts to seep back.

It will undoubtedly take time to heal the wounds this nation has suffered over the past year, so whilst there is still a while to go, the election should be the start of this healing process.

Im not certain how much of an impact the housing woes in the west will have in Thailand, but I can certainly see some people looking to shift holidays houses going forward, especially those which have financed by second mortgages back home.

Norrona, PKRV, I don't understand all this fuss over ownership laws, they are very clear.

You can own condos freehold.

If you are a BOI promoted firm, the company can own an office building, factory, warehouse and can even own the residences (including housing) of the your management team. Non BOI promoted foreign manufacturers can also own factories in IEAT registered estates too not that there many, pretty much every manufacturer gets BOI promotion.

The Thai company route towards house ownership using nominees is, and has always been, illegal, even if it hasn't always been enforced. I doubt that anything will happen retrospectively with that, but it will be difficult, if not impossible, to go down that in the future without a legitimate Thai partner who is financially capable to purchase 51% of the asset under consideration.

There is also a rather clunky residential land ownership route available if you invest THB 40Mn for 5 years available too, but I have never heard of anyone actually doing it.

Then you have the other interests in land such as leasing, and easements (i.e. usufructs and superficies) and various combinations thereof open to you too.

Given that freehold foreign ownership of land is difficult in many of Thailand's regional neighbours is difficult or impossible too I dont see this changing anytime soon.

What am I missing, oh yes, if you buy a home with your Thai wife, you must sign a document that waives any interest in that house.

I think thats it, so what else does the government have left to clarify?

Edited November 14, 2007 by quiksilva

[london]

A BOOM after the election???

This guy just wants to talk up his project.

I'd rather sit back and watch a steady increase in prices.....I'm not at all interested in a boom. Boom equates with bust. Never a good scenario! Never a good marketing line either !

[pkrv]

hi quksilva - great post as usual - My chief concern is that a very simple freehold option on condominiums (ok 49% stuff) is a completly different kettle of fish to 'land/house ownership'. This confuses some posters who sometimes cannot seem to differentiate.

[norrona]

agreed quicksilva about the company thing, but for years when I was selling real estate out there the guide lines were not really clear or available, what I was pointing out is whatever government that gets in needs to clarify exactly what we as foreigners can and cant do, can and can't buy or invest in?

theres been too much grey areas and contradiction, so much in fact I walked away from there full time 2 1/2 years ago and chose to do business in more welcoming countries. still love the place and miss living there, just don't miss doing business there

[JimmyTheMook]

I often wonder when the the government is going to start pulling the chanoots on all the foreigners who own houses via the Thai Company farce many were led to believe was a somewhat legal.

Will the market ever return in Thailand, yes but not for another few years.

Buy now if you can

[norrona]

I often wonder when the the government is going to start pulling the chanoots on all the foreigners who own houses via the Thai Company farce many were led to believe was a somewhat legal.

Will the market ever return in Thailand, yes but not for another few years.

Buy now if you can

buy what now? condos? or land/houses and put it in the wifes name? as you say the company way is a farce!

if they did pull all the chanoots on the foreigners with company ownership it would not do the country any favours at all, and the media in the U.K not to mention anywhere else would have a field day on what is already a disliked place by them!

clarity is all people need to make their decisions and no contradictions on the rules, but proper investment in Thailand it is purely a lifestyle choice and all the speculators had it good for a few years but the ones who got greedy are still there trying to flip their apartments and failing miserably so I am told by an estate agent in pattaya who says it as it is.

buy to let market is terrible, buy to flip market is worse and whilst the hotels are relatively cheap who wants to rent any apartment for a 2 week to 1 month break.....not the masses!

[Kf6vci]

Developers are mainly into marketing and talking up their projects. Who ever heard one spread doom and gloom?

There are many risks, the overvalued Baht, the political risk and the legal issues with land ownership. not to mention the "relationship risk" when one has to rely on a Thai spouse.

some folks I know rent nice but humble places for like 6 grand a month. And when something breaks, they call a landlord. Leaky roofs and all, there can be a lot of deferred maintenance so buyer beware!

[GuestHouse]

What else would you expect a property develper to say?

He's trying to shift stock.

[pkrv]

Developers are mainly into marketing and talking up their projects. Who ever heard one spread doom and gloom?

There are many risks, the overvalued Baht, the political risk and the legal issues with land ownership. not to mention the "relationship risk" when one has to rely on a Thai spouse.

some folks I know rent nice but humble places for like 6 grand a month. And when something breaks, they call a landlord. Leaky roofs and all, there can be a lot of deferred maintenance so buyer beware!

overvalued THB??????????? I'm sorry it is as cheap as chips unless you are from the US in which case it is expensive along with just about every other currency - World Stage is where we are.

[quiksilva]

There are many risks, the overvalued Baht, the political risk and the legal issues with land ownership. not to mention the "relationship risk" when one has to rely on a Thai spouse.

At the risk of repeating myself, what legal issues?

Sure there is a relationship risk, but that's easy to solve if you don't trust her, don't be err I mean buy with her....

[englishoak]

wishful thinking IMO

[think_too_mut]

"We believe housing priced between Bt1 million and Bt5 million is the largest market, and as a result we are focusing on it this year and next. However, if we see potential in luxury residential, then we might enter that market," he said.

Means, luxury properties are worthless junk now, they are not wasting time and money on them.

Laughed at 1-5 mil properties are the lifeline for drowning developers.

Wait until after elections and Thaksinites victory, the brand new coup after that will destroy even that market.

And see many foreigners having trouble abandoning their properties and fleeing the country.

Edited November 16, 2007 by think_too_mut

[norrona]

if they did pull all the chanoots on the foreigners with company ownership it would not do the country any favours at all, and the media in the U.K not to mention anywhere else would have a field day on what is already a disliked place by them!

I think they could not care less how they are portrayed in the media in the West. Also I doubt anyone in the UK would be bothered unless they owned property themselves. It would be a non-story as far as Western media is concerned.

It's not going to stop the tourists arriving, especially from the emerging markets of China and Russia.

I don't think the backlash would be too great as they have the excuse of enforcing a law which many foreigners seem to think doesn't apply to them or will never be enforced!

Never say never in LOS!

care less or not we know they don't mind shooting themselves in the foot, that would be shooting themselves in the nuts with one in the chamber ready for between the eyes.

Thailand needs the world to business with more than the world needs Thailand....

still like you say never say never.....logic of the LOS and all that.

just glad i've sold up and got the majority of my lifes work out of there.

they shouldn't have let it happen in the first place will be the cry....meaning let foreigners bring money in the country, buy properties illegally as in company names and not regulate things from the start.

all food for thought!

[think_too_mut]

care less or not we know they don't mind shooting themselves in the foot, that would be shooting themselves in the nuts with one in the chamber ready for between the eyes.

Thailand needs the world to business with more than the world needs Thailand....

IMO, it's quite oposite. World (the developed world) needs Thailand to make things for them at low price.

As long as the Thais provide for factories to be set up and cheap labor, harbours, infrastructure and reasonable law and order, real estate is a small fry.

The backbone is export-oriented economy and I can't see what will make Toyota, Nissan, Bayer....to pull out.

Junta or not, property ownership and farangs' desires regarding real estate won't make them go out of their way.

[pkrv]

There are many risks, the overvalued Baht, the political risk and the legal issues with land ownership. not to mention the "relationship risk" when one has to rely on a Thai spouse.

At the risk of repeating myself, what legal issues?

Sure there is a relationship risk, but that's easy to solve if you don't trust her, don't be err I mean buy with her....

Done

[norrona]

care less or not we know they don't mind shooting themselves in the foot, that would be shooting themselves in the nuts with one in the chamber ready for between the eyes.

Thailand needs the world to business with more than the world needs Thailand....

IMO, it's quite oposite. World (the developed world) needs Thailand to make things for them at low price.

As long as the Thais provide for factories to be set up and cheap labor, harbours, infrastructure and reasonable law and order, real estate is a small fry.

The backbone is export-oriented economy and I can't see what will make Toyota, Nissan, Bayer....to pull out.

Junta or not, property ownership and farangs' desires regarding real estate won't make them go out of their way.

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

mid 90's to early 2000's I was renting lots of property to corporate types like GM and BMW....it all stopped once China opened up it's floodgates, even the copied goods are brought in from China, India now has lots of benefits for foreign companies to open up factories there, thailand does have some export business left but over the past 20 years has lost out big time.

They have been spoilt, simple end of! bit like the women over there....

Think Too Mut, you need to have a sit down and think a bit more, sorry to burst your bubble!

[think_too_mut]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing.

[norrona]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing. manufacturing for thailand and only small percentage for export compared to 10 years ago.

off subject now so no point going on, we have slightly different views, I just know i am right

[JimsKnight]

care less or not we know they don't mind shooting themselves in the foot, that would be shooting themselves in the nuts with one in the chamber ready for between the eyes.

Thailand needs the world to business with more than the world needs Thailand....

IMO, it's quite oposite. World (the developed world) needs Thailand to make things for them at low price.

As long as the Thais provide for factories to be set up and cheap labor, harbours, infrastructure and reasonable law and order, real estate is a small fry.

The backbone is export-oriented economy and I can't see what will make Toyota, Nissan, Bayer....to pull out.

Junta or not, property ownership and farangs' desires regarding real estate won't make them go out of their way.

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

mid 90's to early 2000's I was renting lots of property to corporate types like GM and BMW....it all stopped once China opened up it's floodgates, even the copied goods are brought in from China, India now has lots of benefits for foreign companies to open up factories there, thailand does have some export business left but over the past 20 years has lost out big time.

They have been spoilt, simple end of! bit like the women over there....

Think Too Mut, you need to have a sit down and think a bit more, sorry to burst your bubble!

Agreed, I was speaking to a guy who lets his condo out. It cost him 800,000 baht and he can only get 4500 baht per month for it. His ROI is likely going to be fifteen years (assuming he's got a client for those fifteen years non-stop).

Rent Rent Rent I say. Buying property is almost always a mugs game out in LOS.

Edited November 19, 2007 by JimsKnight

[xyborg]

<br />

if they did pull all the chanoots on the foreigners with company ownership it would not do the country any favours at all, and the media in the U.K not to mention anywhere else would have a field day on what is already a disliked place by them!

<br /><br />I think they could not care less how they are portrayed in the media in the West. Also I doubt anyone in the UK would be bothered unless they owned property themselves. It would be a non-story as far as Western media is concerned.<br /><br />It's not going to stop the tourists arriving, especially from the emerging markets of China and Russia.<br /><br />I don't think the backlash would be too great as they have the excuse of enforcing a law which many foreigners seem to think doesn't apply to them or will never be enforced!<br /><br />Never say never in LOS!<br />

<br /><br /><br />

Land grab in Spain was quite a big story here in the UK.

[distortedlink]

My Thai wife informs me every day that after the election Thailand is going to boom, interest rates for investors is going to increase, our property is going to treble in value, maybe get 90 baht to the pound, everything is going to be marvellous.

I ask her how does she know this. Oh, they say it on the news so it must be fact, she tells me.

Don’t believe it. This is another ploy by big business to panic people into buying now because they are kidded into thinking by the real estate companies and banks that property and the cost price of bank loans will soar after the election and if they cash up at this time, big profits for all later on next year, by curtisy of the new wonderful successor government.

Believe me it wont happen.

[think_too_mut]

really??? I thought thats where China and India are excelling in and had taken over from what Thailand used to offer....

Japanese won't keep all their eggs in Chinese basket and will always have Thai factories.

There are 4000 foreign companies (not PO Box) in Bangkok. Most manufacturing. manufacturing for thailand and only small percentage for export compared to 10 years ago.

off subject now so no point going on, we have slightly different views, I just know i am right

Of course, you can think the earth is flat and resting on the back of 4 elephants.

Even slightest check of numbers shows structure of GDP: agriculture (10%), industry (44.9%), services (45.2%) (2006 est.)

In 1988. industry was 30%, now is almost 45%.

Going deeper, you will see that only car manufacturing makes twice as much as tourism.