2nd Hand Bangkok Condo Market

[ray08]

As somebody who is possibly looking to purchase property here , i am very interested in knowledge of the 2nd hand market ,

reading through these forums most of the views are on new projects and future increase in value , which is what we all would like,

What i really want to find out about is the 2nd Market , Speaking to some Thai friend of mind who have some property investments they told me they do not buy a second hand property , unless it is empty land to develop,

Also just last week i was asking about a loan on a Condo / office space the bank were willing to go to 70% value ,when i told them it was 12 years old they basically told me they were not interested in lending on property more than 10 years old , and prefer brand new projects ,only reason i was interested it was dirt cheap since it was empty since being built and still a shell

With these signals and the amount of new stock hitting the market , if i was to purchase a brand new unit today and in say 7 years try to sell , with so much stock allways coming on the market , can i really sell it at a decent profit ?? interested to hear if anyone has who has held property for several years here and sold at a decent profit and how long it took to sell.

Any feedback greatly apprecited

[Irene]

As somebody who is possibly looking to purchase property here , i am very interested in knowledge of the 2nd hand market ,

reading through these forums most of the views are on new projects and future increase in value , which is what we all would like,

What i really want to find out about is the 2nd Market , Speaking to some Thai friend of mind who have some property investments they told me they do not buy a second hand property , unless it is empty land to develop,

Also just last week i was asking about a loan on a Condo / office space the bank were willing to go to 70% value ,when i told them it was 12 years old they basically told me they were not interested in lending on property more than 10 years old , and prefer brand new projects ,only reason i was interested it was dirt cheap since it was empty since being built and still a shell

With these signals and the amount of new stock hitting the market , if i was to purchase a brand new unit today and in say 7 years try to sell , with so much stock allways coming on the market , can i really sell it at a decent profit ?? interested to hear if anyone has who has held property for several years here and sold at a decent profit and how long it took to sell.

Any feedback greatly apprecited

I rarely sell my property. The last time I sold my unit was twenty years ago with two million bahts profit. I do buy a lot of condos, some new and mostly second or third hand. Why so? Because most of my bought property fetch good rental. One unit I bought a long time ago gives me currently a rental return of 30%. The beauty of buying a second hand condo is a proven record of management, location and demand condition and types of people residing. So the risk is less than a new unit.

However, I am not encouraged by your interest in an unoccupied unit since built 12 years ago. That is not likely to pass my check list of buying.

[quiksilva]

As somebody who is possibly looking to purchase property here , i am very interested in knowledge of the 2nd hand market ,

reading through these forums most of the views are on new projects and future increase in value , which is what we all would like,

What i really want to find out about is the 2nd Market , Speaking to some Thai friend of mind who have some property investments they told me they do not buy a second hand property , unless it is empty land to develop,

Also just last week i was asking about a loan on a Condo / office space the bank were willing to go to 70% value ,when i told them it was 12 years old they basically told me they were not interested in lending on property more than 10 years old , and prefer brand new projects ,only reason i was interested it was dirt cheap since it was empty since being built and still a shell

With these signals and the amount of new stock hitting the market , if i was to purchase a brand new unit today and in say 7 years try to sell , with so much stock allways coming on the market , can i really sell it at a decent profit ?? interested to hear if anyone has who has held property for several years here and sold at a decent profit and how long it took to sell.

Any feedback greatly apprecited

I rarely sell my property. The last time I sold my unit was twenty years ago with two million bahts profit. I do buy a lot of condos, some new and mostly second or third hand. Why so? Because most of my bought property fetch good rental. One unit I bought a long time ago gives me currently a rental return of 30%. The beauty of buying a second hand condo is a proven record of management, location and demand condition and types of people residing. So the risk is less than a new unit.

However, I am not encouraged by your interest in an unoccupied unit since built 12 years ago. That is not likely to pass my check list of buying.

Agreed, I would be very wary about that. Old buildings that have an established market presence, responsible management team and have proven to be popular with tenants are definitely worth considerring, I wouldn't look at something thats been empty for 12 years though!

[ray08]

As somebody who is possibly looking to purchase property here , i am very interested in knowledge of the 2nd hand market ,

reading through these forums most of the views are on new projects and future increase in value , which is what we all would like,

What i really want to find out about is the 2nd Market , Speaking to some Thai friend of mind who have some property investments they told me they do not buy a second hand property , unless it is empty land to develop,

Also just last week i was asking about a loan on a Condo / office space the bank were willing to go to 70% value ,when i told them it was 12 years old they basically told me they were not interested in lending on property more than 10 years old , and prefer brand new projects ,only reason i was interested it was dirt cheap since it was empty since being built and still a shell

With these signals and the amount of new stock hitting the market , if i was to purchase a brand new unit today and in say 7 years try to sell , with so much stock allways coming on the market , can i really sell it at a decent profit ?? interested to hear if anyone has who has held property for several years here and sold at a decent profit and how long it took to sell.

Any feedback greatly apprecited

I rarely sell my property. The last time I sold my unit was twenty years ago with two million bahts profit. I do buy a lot of condos, some new and mostly second or third hand. Why so? Because most of my bought property fetch good rental. One unit I bought a long time ago gives me currently a rental return of 30%. The beauty of buying a second hand condo is a proven record of management, location and demand condition and types of people residing. So the risk is less than a new unit.

However, I am not encouraged by your interest in an unoccupied unit since built 12 years ago. That is not likely to pass my check list of buying.

So my understanding is that they fetch a good rental return makes sense and is one critiria for investing in property ,but in these properties do you also expect them, as they get older to give a good capital gain profit , or are they more of a good income stream ,

This is where i cannot come to grips with the second hand condo market , In the past ( overseas ) i have even sacrifised the rent eg 3-4 % return because of the prospect of a large capital profit , can this also happen here , again with pressure from new developments hampering the second hand market.

Edited November 22, 2007 by ray08

[TonyLeung]

i thought farang couldnt get mortgages from thai banks ?

[samtam]

The simple answer is "no" there is no established and mature secondary condo market in Bangkok. Prices are 50%+ less than adjacent properties that are new. Thais tend not to sell their condos, even if they do not live in them. There is a foreigner to foreigner market, but obviously it is small and illiquid. If you buy, buy it to live in, and don't expect it to sell easily. The current conditions are dire with new builds in great oversupply. The new mega expensive projects are testing the norms, with prices at THB225,000 psm (The Sukhothai Residences) which is "very interesting" indeed. I can't quite see how this will pan out, however.

Edited November 23, 2007 by samtam

[quiksilva]

i thought farang couldnt get mortgages from thai banks ?

Search this forum for UOB

[Irene]

[

No, I don't think so. The rental and capital gain go hand in hand. If you can rent out at a high price, then the chance of capital gain would also be high.

[buddhafly]

ray08

i am very curious as well.

i am considering buying in a 15 year old building! but i have lived here for 3 years and am happy with the management.

some parts of the public areas are a bit out of style, but i believe they will update as time goes on. theyve already rennovated the lobby and its nice.

so why am i considering this older building? well, it doesnt seem that old really. and the location is fantastic. perfect really.

it also is a smaller building, not a mega building, which seems more personal and private. the views are great too.

so i'm wondering if 79,000 per sq meter sounds right for this? the place is on a high floor and has views from 3 sides. walking distance to skytrain and walk to my office.

i'd probably rennovate it, live in it for 3 to 5 more years then rent out of sell.

irene i'd appreciate your thoughts too if youre reading. if i sold it in 10 years itd be 25 years old! is that possible?

thanks

b

[Alboy301]

I would say that you will have serious difficulty shifting a 25 year old property and would suggest it is a very unwise idea.

I bought a condo at Waterford Diamond on Sukhumwit 30/1 for 4.5 million nearly two years ago. Now it's price would work out at about 81/82k a sq.m. It's a very reasonable building and only 8 years old. It also generates a pretty good rent of 32k a month.

I would suggest to you that you could buy much younger property for much the same money so I think you would be mad to buy something so old. I know it's easy to get fond of a place you live in but don't let this cloud your judgement. Be realistic about the future. There's currently a big over supply of new condos which makes the task of selling older ones generally more difficult. What will it be like in 10 years?

[buddhafly]

appreciate that alboy. you've got some good points there. i guess if the price of it were lower it'd be an easier decision.

it's just tough to find something younger with as good a location, views and privacy without spending 110-150k.

[ray08]

Thb 79,000 psm for a 15 year old building sounds very high , have there been other sales in the building anywhere near that rate ?, or are owners just comparing to new market price to work out the value , in regards to trying sell when 25 years old , how many 25 year properties are on the market and what are they selling for ??, i think it would be hard to move ,especially with the amount of stock already on the market and 25 years down the line who knows ,

One thing i noticed is there is plenty of room to build in bangkok , even excluding the empty lots , there are plenty places ,old shops etc to knock down and build so there will be lots of newer units in the future even in Central Bangkok,

[quiksilva]

Ray there does seem to be a lot of room for development doesn't there? The problem is that many of these empty lots may in fact consist of many title deeds each with a different owner.

Consolidated purchases are quite common in more developed markets, but here in Bangkok its a nightmare trying to put these things together. Then you have the problem on the owners view on value, because planning laws have changed and its no longer possible to build the same product on a land parcel today hence its not worth as much to a new buyer = problem.

Tearing them down and building new is easy to say but in practice, here, it is very difficult indeed. It can be hard enough to establish who owns the site in question! This is why developers have been focussed on large titles with a single owner, only when these are exhausted and when values rise even further will it become feasible to spend the time and money on consolidated purchases like we see in Singapore for example.

Edited November 26, 2007 by quiksilva

[ray08]

Ray there does seem to be a lot of room for development doesn't there? The problem is that many of these empty lots may in fact consist of many title deeds each with a different owner.

Consolidated purchases are quite common in more developed markets, but here in Bangkok its a nightmare trying to put these things together. Then you have the problem on the owners view on value, because planning laws have changed and its no longer possible to build the same product on a land parcel today hence its not worth as much to a new buyer = problem.

Tearing them down and building new is easy to say but in practice, here, it is very difficult indeed. It can be hard enough to establish who owns the site in question! This is why developers have been focussed on large titles with a single owner, only when these are exhausted and when values rise even further will it become feasible to spend the time and money on consolidated purchases like we see in Singapore for example.

I see your point ,and i know nothing is easy here , but i think the main issue is that in Bangkok there is no shortage of space to build , where there is a will there is a way , compared to say Central london or Hong Kong where even if you want to it would be very very hard to find room to build , that being the case i think the pressure on 2nd hand unit resale values would be down , due to the opportunity and preference of a lot of people in Thailand to buy new

[thaigene2]

As somebody who is possibly looking to purchase property here , i am very interested in knowledge of the 2nd hand market ,

reading through these forums most of the views are on new projects and future increase in value , which is what we all would like,

What i really want to find out about is the 2nd Market , Speaking to some Thai friend of mind who have some property investments they told me they do not buy a second hand property , unless it is empty land to develop,

Also just last week i was asking about a loan on a Condo / office space the bank were willing to go to 70% value ,when i told them it was 12 years old they basically told me they were not interested in lending on property more than 10 years old , and prefer brand new projects ,only reason i was interested it was dirt cheap since it was empty since being built and still a shell

With these signals and the amount of new stock hitting the market , if i was to purchase a brand new unit today and in say 7 years try to sell , with so much stock allways coming on the market , can i really sell it at a decent profit ?? interested to hear if anyone has who has held property for several years here and sold at a decent profit and how long it took to sell.

Any feedback greatly apprecited

I rarely sell my property. The last time I sold my unit was twenty years ago with two million bahts profit. I do buy a lot of condos, some new and mostly second or third hand. Why so? Because most of my bought property fetch good rental. One unit I bought a long time ago gives me currently a rental return of 30%. The beauty of buying a second hand condo is a proven record of management, location and demand condition and types of people residing. So the risk is less than a new unit.

However, I am not encouraged by your interest in an unoccupied unit since built 12 years ago. That is not likely to pass my check list of buying.

Irene

To whom do you rent most of your condos? Farang/Foreigners or Thai?

[Gary A]

If you really want to know, just try to buy one. Prices are kind of crazy in Bangkok. WAY too high.

[dotcom]

Been more expensive than Waikiki Beach for years. Nothing new.

[Irene]

Irene

To whom do you rent most of your condos? Farang/Foreigners or Thai?

No Thai. All are to foreigners, American, Japanese, and Korean.