Failure Rate For Condos Nears 50%

[steveromagnino]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

Ironically I suppose an Innuit could claim the world revolves around them....if they went to the north pole

[TAWP]

the prices for condos here in thailand are based on what foreigners can pay. not what the local thais can pay. in other words, if the foreigners all left, the condos would stay empty. that's a fact.

another crash is coming. I feel it.

Fascinating. Please back that up with data from say /snip/

Good post and thanks for posting it so others didn't have to (and we would probably would put it less eloquent to Mr nick2k).

[nick2k]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

[Prakanong]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

Methinks you forget Asia and its technology just a tad.

Then we have India and China coming up very fast.

As for joining the "West" - do you mean the capitalis economic system, the plural democratic sysem or what?

[nick2k]

the prices for condos here in thailand are based on what foreigners can pay. not what the local thais can pay. in other words, if the foreigners all left, the condos would stay empty. that's a fact.

another crash is coming. I feel it.

Fascinating. Please back that up with data from say, Sansiri and LPN sales; two ends of the market, what percentage of foreigners are buying condos from these developers?

Don't know?

Try 80%+ Thai buyers on average.

In other words.....your 'fact' flies totally in the face of some company's actual experience.

How all the foreigners are going to leave I have no idea. And nor do you.

Your comment about 50%; you actually mean 49% and this is only relevant for freehold property anyhow. In many cases irrelevent (.e.g. Ideo, AP, LPN, Sansiri = no where near 49% in most of their developments). In some cases relevant e.g. Sukhothai, The Met, Raimon Land, etc - coicidentally all effectively foreign companies and they don't really know how to sell to Thais. Right now Sukhothai and The Met then construct and sell on lease basis - they are not 'stuck holding the property' as you claim.

How you can claim a swing in condo prices would cause a massive change in the Thai Baht USD exchange rate is beyond me.

And as for the PAD, if you think we would be better off just keeping quiet and watching idiots like Chalerm, Jakapop, Mingkwan and Samak shoot their mouths off and do nothing constructive while basically continuing the idiocy, well that's up to you. Protests disturb, but welcome to democracy. PAD has as much right to stir up cr&p as anyone else; no it doesn't help stability of the country, but a few jitters is better now than the all out war that could occur were PPP to have changed the constitution to get TRT and Taksin off all their sins.

After all, just because they were elected, using that logic it would be fine for them to say, lock all the ethnic minorities up in happy camps, gas them, maybe slaughter a few other groups and then hold all night drug fueled drum and bass parties until 9am on and on and on for all sheep and children aged under 12. Surely the point of a democracy is that we also have the freedom to express disagreement and get people out of power???? Shades of Korea come to mind here.

But then again, what would I know, I'm just a Thai which means I cannot afford to buy a condo. Strange being that i have/earn enough to easily finance a place worth like 50m baht, but I guess that is chump change for these affluent farangs running around like they own the place

you brought up a number of points..

on the subject of PAD, freedom of speech is important, and should not be prohibited. BUT when it is ABUSED to the point where people cannot work to support themselves, when it is ABUSED to the point where your elected leaders cannot work to maintain the country, provide food, provide energy, etc. to it's people, THEN whoever is doing this abusing should be made to stop.

if PAD doesn't like what the elected officials are doing, then, they should rally behind their elected representatives to protest. BUT they should allow their elected officials to focus their time on activities like negotiating trade with foreign countries for the betterment of the country RATHER then worry about lawsuits, and protest on the streets.

on the subject of thais being able to afford the condos. nobody said that there were no thais that could afford the condos. but lets face it, the bangkokpost reported that the average salary of a thai is less than 200 baht a day. how can a person who makes 200 baht a day afford a condo worth 10 million baht? or for that matter, 2 million baht? perhaps the bangkokpost is reporting lies??? you mention that LPN sells mostly to thais. I am not arguing that point. but this string is about the 50% failure rate for condos. could it be that this 50% failure rate includes condos sold by LPN to thais?

I see some more troubles in the near future here because the cost of food and gasoline has DOUBLED. do you agree?

I know many people don't like criticism. and frankly, I don't either. but if it is constructive criticism, I will tolerate it. I admit that I am not the smartest guy in the world, and realize that someone may have knowledge that can help me improve myself.

[nick2k]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

Methinks you forget Asia and its technology just a tad.

Then we have India and China coming up very fast.

As for joining the "West" - do you mean the capitalis economic system, the plural democratic sysem or what?

I am not forgetting anybody. definitely, china and india are a force. but the technology that is driving most asian countries comes from the west. when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines, perhaps something that can change our dependence on oil? ..THEN, we can say they have contributed in the way of technology.

like I said, look around you. EVEN in china, I see starbucks, mcdonalds, burger king, televisions, internet, movies, dvds, etc. they are everywhere.

you ask, what is the "West"? think of burma, cuba, and north korea, etc. and you don't see the west.

[younghusband]

I know many people don't like criticism. and frankly, I don't either. but if it is constructive criticism, I will tolerate it. I admit that I am not the smartest guy in the world, and realize that someone may have knowledge that can help me improve myself.

Just as an aside I have never known a culture that is less willing to accept constructive criticism than Thailand.Ask any farang manager who has had to perform staff appraisal reviews.Constructive criticism is taken by many Thais, particularly the "educated" ones, as a kind of violent assault on their ego.Most farang managers sell the pass and like Disraeli with Queen Victoria lay on the flattery with a trowel.

If anyone is interested why I place "educated" in inverted commas it is because I am thinking particularly of Thais who have graduated from second tier American universities, most returning home without being able to write a simple letter in grammatical English

[Prakanong]

"when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines"

Well I work for a major vaccine producer and know what our competition may be in the near future from India and China

[ILovedogs]

Can you tell us? And competition for whom?

I bet they are going to copy faster, and cheaper, and set up some call centers in case you have questions.

[Seneque]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

I understand what you mean ...and i appreciate the non-bragging intention, but i have a feeling that all these 'goodies' coming from the 'west' (at large) are in a way getting into the head of most farangs (not you obviously, hopefully) and gives them a right to decide what is good or bad for a population while not really understanding how it functions ... to go back to the subject, thais are the market in thailand, as americans are the market in the US ... why do some think that farangs are the salvation for condos here and without them thailand is doomed... beats me !

[midas]

"when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines"

Well I work for a major vaccine producer and know what our competition may be in the near future from India and China

Surely whatever may be invented in the West now can never be guaranteed

to be made or developed in the West as well ? Why would you need to with

some brilliant but low cost minds in India and a great work ethic in China ?

[nick2k]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

I understand what you mean ...and i appreciate the non-bragging intention, but i have a feeling that all these 'goodies' coming from the 'west' (at large) are in a way getting into the head of most farangs (not you obviously, hopefully) and gives them a right to decide what is good or bad for a population while not really understanding how it functions ... to go back to the subject, thais are the market in thailand, as americans are the market in the US ... why do some think that farangs are the salvation for condos here and without them thailand is doomed... beats me !

first off, let me just point out that - NOBODY said that thailand would be doomed if the condo market were to collapse. the fact that thailand survived the 1997 crash is indicative of their toughness. I think the thai people in general are tougher than me. I could never tolerate working the long hours that I see thais do at the level of wages that they work for.

secondly, when people talk constructively, they are not trying to belittle someone else for pleasure, they are trying to assist someone. personally, I just want to point out the errors in the real estate market here.

..you must agree that there is a problem with the real estate market here, right?

I mean - your very own newspapers are reporting a quote, "50% failure rate in the condos". 50% is not normal for any major country. even with the problems we americans have in the usa, we don't have a 50% failure rate.

let me reiterate.. the condo market here is trying to cater to foreigners - of which a majority consists of westerners. yes, there are some developments that offer condos at prices around 2 million that some thais can afford. but like I said in an earlier post, if the average daily salary of thais is around 200 baht a day, how can you possibly say that these 10 million baht condos are targeting these people?

these 10 million baht condos are priced for the foreign market. pure and simple.

if you have a 50% failure rate, there will be a crash. that doesn't mean that thailand is doomed. it just means there will be a lot of empty condos. like what happened before in 1997.

the solution - LOWER THE PRICES. cater the prices to what the average thai can afford, and you won't have this "50% failure rate". and another thing, get rid of the stupid law requiring that no more than 50% of the units in any complex must be thai-owned. I for a fact know that many condo developments here in bangkok have 25%+ vacancy rates because of this stupid law. and the stories abound of how the developers escape the maintenance fees on these vacate units by stealing the money from the condo reserve funds.

if the price of food and gasoline TRIPLES, my guess is - even the tough thai people will get rattled. and blaming the westerners won't work as an excuse anymore because anybody with even a grade school education can see that the political opposition here in thailand won't allow the elected politicians to do their work. ...and who might I be referring to when I say the "political opposition"? you tell me.

my last thought... oil is to blame for the price of food and gasoline increasing. and who controls the price of oil? ..if the price of oil increases to 200 dollars a barrel, what will happen to the price of food in thailand? TRIPLE? QUADRUPLE?

people need to discuss options CONSTRUCTIVELY. everybody. not just the politicians.

[Dakhar]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

Methinks you forget Asia and its technology just a tad.

Then we have India and China coming up very fast.

As for joining the "West" - do you mean the capitalis economic system, the plural democratic sysem or what?

I am not forgetting anybody. definitely, china and india are a force. but the technology that is driving most asian countries comes from the west. when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines, perhaps something that can change our dependence on oil? ..THEN, we can say they have contributed in the way of technology.

like I said, look around you. EVEN in china, I see starbucks, mcdonalds, burger king, televisions, internet, movies, dvds, etc. they are everywhere.

you ask, what is the "West"? think of burma, cuba, and north korea, etc. and you don't see the west.

To jump in to this foray.... Study history a little and we can find that China/Asia is created the art of smelting metals etc.

Kind of a pyramid effect. If were not for that, than this type of thing.....

But I think if we were to ask, what has Asia done in modern times.... not much, but with out Asia, there would not have been "modern" time in the first place. I say this without rose tinted glasses, I am just laying out the facts. I also agree, if it were not for westerns ambitious personalaties we would probably not have the modern socitety we have today.

That said.... the earth may have lasted us longer then eh? Double edged sword, this modernations thing is. (I say this while jamming to my tunes on my i-pod, with the AC on and the fan etc)

Good night folks

[JRinger]

I really don't understand the property market here; seems like straightforward supply and demand doesn't kick in to keep the prices realistic, and instead prices seem to rocket for some strange unknown reason?

Actually, not so strange and unknown.

Example: Isaan. For many years, the asking price for 1 Rai of land in a certain area was 50,000 baht.

Then, this fairly young farang who was born with a silver spoon in his mouth paid 150,000 baht per rai and set a new Standard.

Edited June 13, 2008 by JRinger

[grantbkk]

Property speculation is a form of doing business and investing (gambling) on property values increasing in the short or long term. In Thailand is it easy to put Bt100K down on a condominium unit or multiple units in a project, pay a small monthly fee, and wait for the property to increase in value during the construction period. The construction period usually goes long so theoretically you can make even more money by drawing out the cycle and not having to pay for the condo(s) until the project is completed. The problems come when the developer folds either leaving with the cash deposits or lacking funds to complete the project. When the buyer cannot unload his option before millions of Baht are due the developer now has units back on the market and they may or may not sell.

In many countries the rules of supply and demand are effective are an effective tool to regulate the price of a property buy or lease. Well folks, TIT! Often if the unit is not selling the price is raised. If the condo cannot be leased and is empty for a time just raise the monthly lease price to cover the losses. It may have something to do with losing face.

Before the latest coupe I was in the market to but a condo and looked at about 50 all over Bangkok. The September 19th coup saved me from making a foolish mistake. I have lived in three condos since May 2003 and paid the same lease price for each. Currently I live in a 3,000 square foot unit with a beautiful view on the river. The common denominator besides the price is the land owners. None are Thai. All are educated and own multiple properties here in the capital. If a Thai owned any of these properties I would not be able to afford the lease price. There are several units similar to mine owned by Thais but they are Bt20K to Bt50K more expensive to lease per month. They may remain empty forever but no one is going to take advantage of the owner by getting a cheaper price. It is just crazy to leave these spaces empty for years.

I believe if and when condo prices reach Bt300K per square meter it may be time to move on from the LOS. I don't think there are too many working class Thais that are going to be able to fill that 51% ownership law for these projects. I think that for the same price you can live anywhere in the world quite comfortably.

Edited June 13, 2008 by grantbkk

[steveromagnino]

Let me respond point by point

>>>..you must agree that there is a problem with the real estate market here, right? I mean - your very own newspapers are reporting a quote, "50% failure rate in the condos". 50% is not normal for any major country. even with the problems we americans have in the usa, we don't have a 50% failure rate.

Not really, it is a biased PR piece from a mid end developer and the reality is that this so called 50% failure rate is unsold inventory; very different to never being sold:

"Of the 50,000 units that are expected to be launched this year, about 46 per cent won't be sold," he deduced from recent statistics. "One out of every two developments could fail."

That's like saying since 50% of the inventory of a building that takes 4 years to build is unsold after the end of year 1, it is a 50% failure - it makes no sense! There is, I agree, going to be a correction to sectors of the market; these will not include the high end of the high quality or the value for money; it will include the dross that has been sold e.g. The Regent, The Trendy which are indeed failures in many senses of the word.

>>let me reiterate.. the condo market here is trying to cater to foreigners - of which a majority consists of westerners. yes, there are some developments that offer condos at prices around 2 million that some thais can afford. but like I said in an earlier post, if the average daily salary of thais is around 200 baht a day, how can you possibly say that these 10 million baht condos are targeting these people? these 10 million baht condos are priced for the foreign market. pure and simple.

Which bit did you not understand? Sansiri is one of the largest players in the condo market; 80% of their units sell to Thais. Specific projects such as Infinity, The Park, Sala Daeng Legend, Sala Daeng Royal - these are all running around 40-70% Thai buyers and are all starting pricing for a 1 bedroom pretty much close to 10m. The 200b you keep spouting is somehow supposed to cancel out the fact FACT fact that there are a bunch of Thai Bangkokians earning 70,000b or more a month household income; sufficient to buy a 10m baht condo (NESDB data the last I saw, 1 million people in this situation/300,000+ households and that was back in 2003; probably 50% more than that by now). Only the foreign developers (HPL, Raimon Land, HKR) have failed to get Thai buyers mostly because they have no idea of how Thai buyers think and more importantly, in some cases they are starting to try pretty hard to learn from their past practises to start getting the marketing right to get Thais buying. How many of those 50m baht homes in say Crystal Park do you think Thais have bought (AFAIK most or almost all are Thai, pure Thai buyers).

>>>if you have a 50% failure rate, there will be a crash. that doesn't mean that thailand is doomed. it just means there will be a lot of empty condos. like what happened before in 1997.

No it doesn't. It means some buildings won't get built. it means some buildings will get built but the developer will take longer to sell through his inventory. Don't read too much into this 50%; it is just a pointless statistic.

>>>>the solution - LOWER THE PRICES. cater the prices to what the average thai can afford, and you won't have this "50% failure rate". and another thing, get rid of the stupid law requiring that no more than 50% of the units in any complex must be thai-owned. I for a fact know that many condo developments here in bangkok have 25%+ vacancy rates because of this stupid law. and the stories abound of how the developers escape the maintenance fees on these vacate units by stealing the money from the condo reserve funds.

Not really possible with the new green area laws; the fact that a building that cost 20,000b to build per sqm 3 years ago now costs something like 35,000b. Other than the players like LPN almost no one can build for what they used to. And also the increasing affluence means people want to spend more.

In Lard Prao there have been 6 projects in the last 3 years I can think of that have sold out in less than a month; all priced around 50,000b per sqm. Inifinity was priced at 120,000b per sqm and sold out, mostly to Thais, in I think 3 months. Sukhothai is 80% sold out. There are plenty of properties in great locations that people are still lining up to buy.

Why is it everyone always thinks that market intervention is the way to go? If people don't want to buy, then there is usually a reason; a bunch of that unsold inventory is because the developments are bad quality, bad location and overpriced. But plenty are not and sell just fine.

BTW if you want to see prices shoot up about 10-20%, get rid of the 50% foreigner law. (actually 49%).

As for all your westerner claptrap, leave that by the door alongside your McDs and Starbucks coffee. I'll stick to driving my Toyota while i write on my Acer computer eating Kao Mun Gai for lunch and drinking some Asahi tonight while watching my favourite Korean soap opera. hel_l, I remember at school; the Chinese won all the science and math prizes; the Indians and Jewish the english; all sports stars were Pacific Islanders and most of the musicians were also Chinese. But yeah.....all them white people at that school (all 75% of them) yeah they were the real acheivers True story :-)

[A_Traveller]

Hi Steve,

Apologies for the hit and run, but I'm going out the door and saw your above post as I was shutting down. A, probably dumb question, but how does a 70,000 THB per month income qualify for a 10million THB property, presumably funded by mortage? Maybe I misread in the rush.

Regards

[steveromagnino]

Hi Steve,

Apologies for the hit and run, but I'm going out the door and saw your above post as I was shutting down. A, probably dumb question, but how does a 70,000 THB per month income qualify for a 10million THB property, presumably funded by mortage? Maybe I misread in the rush.

Regards

yeah, around 70,000k based on 50% financing and a 30 year mortage leaves a payment of something like <35,000b a month which is very high but not unacheiveable - typically a bank would prefer to run around 35% maximum for debt servicing for a mortage as % of monthly income; however typically Bangkokians also receive bonuses, other income and so on; meaning that 70k reported income nett in the old NESDB data I have probably in today's terms would be more like 35% of whatever they earn now. I only provide that as it is a number i know off the top of my head; I would have to spend some time determining weath distribution in today's environment to answer in greater detail; the 1m at 70k a month is something requiring no work at all but it is out of date.

Additionally, for many buyers, discounted financing is available early on, plus they have 3 years from buying until settlement to save hard and that's how they can get to 50% financing. When you look at these numbers, it isn't hard to see why someone earning say 25k a month can easily afford to buy a condo with LPN/Ideo/etc - as I said earlier, there are VERY FEW bangkokians earning 200b a day; those are all upcountry labourer types without any education or access to better work. And even then, there aren't that many of those who are genuinely only making 200b a day anyhow. The cost of living in BKK almost requires more than that.

Lest we think that there are not too many people able to afford 10m baht condos; reality is that a few Thai people, like for example families that own Banpu, Precious Shipping, LPN, TCC etc could afford to probably buy a fair chunk of that inventory of unsold units (and in some cases already own quite a few units themselves) with their own cash at hand in total.

6% rental yield for many is better than what they can get in the banks and some have an aversion to the stock market or may want diversity.

Even in a really lousy market, there is always room for quality product - e.g. The Spire in Chicago despite the whole sub prime thinging stateside.

Good on Ideo though; seems like they have got a few people talking about how good their business plan is compared to the upmarket developers ;-)

[Prakanong]

That still leaves 5 million THB a 70k earner has to raise - thats a lot unless family chip in

People in other markets earning approx 1000 GBP would find it hard to buy the equivalent 150,000 GBP home - even if they would lend you 5 times income that is 60,000 only?

[quiksilva]

Thats the point I think Prakanong, family here usually help out.

There is a duplicate thread on this in the real estate section, so I won't bother to repeat what I have said there, well having said that its probably worth reiterating that stating "Failure Rate for Condos Nears 50%" is irresponsible alarmist journalism.

Stevero's makes some great points, especially about the take up rate 50% sold in the first year is really not too bad. Most condos will not sell out within a year, so what if it takes two?

The only other thing worth adding here is a response to the comment I read about how important foreigners are to this market, and yes I suppose they are, 20% of all condominium transfers is not insignificant, but its not THAT much either.

Yes some condo's will fail. Those with low price points will see their margins disappear, so some will never even get off the ground, but only some.

To state 50% is going too far, unless they have proof, and if they do they should disclose it.

Edited June 13, 2008 by quiksilva

[steveromagnino]

That still leaves 5 million THB a 70k earner has to raise - thats a lot unless family chip in

People in other markets earning approx 1000 GBP would find it hard to buy the equivalent 150,000 GBP home - even if they would lend you 5 times income that is 60,000 only?

true, but yes, families often chip in; especially being that the majority of Thais moving into condos are a little different to farangs; they are oftne moving straight from living with their parents until say age 30 even when married, and then into a condo; the cost of living etc often would mean that 35% of income for financing could be as high as 60%.

One of my staff at my last job was 28, and owned 2 condos and was looking at buying a 3rd; her income was more like 40,000b a month. Agreed none were a 10m baht condo but she stayed living at home, didn't own a car and rented them out.

The other thing was she had her parents to act as gaurantors.

At the end of it all, a couple of key driving factors is that many Thai people only want to be the first person to live somewhere (which is why there is often a benefit to not renting it out, but waiting to sell, and any decent developments are currently something between 25-60% higher now than when sold 5 years ago e.g. Domus, Ficus Lane, Infinity, Park, Legend, Royal but you might not get that if the place is stunk up by a bad tenant); access to more financing from the development when it is brand new and the fairly easy payment schedule while being built; kind of like an enforced saving plan to get the 25% or so that is usually required both by the developer and the bank.

Quiksilver; if you added on the ethnicity of the foreigners buying condos, I think you'd find even less white western faces; much of the buying market here in Thailand are Singaporeans, Hong Kong Chinese and now more than ever, Russians and a few Indians and Middle Easterners.

But then again, we cannot forget that none of these people have ever contributed McDs and Starbucks or other western creations of the rest of the world, so they are, to use local palance, pretty c&*p

[Prakanong]

Guy on my course in Singapore under 30 has six condo's all rented out - he lives with his parents in a HDB flat.

There are a lot of Singaporeans owning property but still live in the HDB - a colleagues HDB flat has porsches, Merc's and Beamers in the car park

[wintermute]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

Methinks you forget Asia and its technology just a tad.

Then we have India and China coming up very fast.

As for joining the "West" - do you mean the capitalis economic system, the plural democratic sysem or what?

I am not forgetting anybody. definitely, china and india are a force. but the technology that is driving most asian countries comes from the west. when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines, perhaps something that can change our dependence on oil? ..THEN, we can say they have contributed in the way of technology.

like I said, look around you. EVEN in china, I see starbucks, mcdonalds, burger king, televisions, internet, movies, dvds, etc. they are everywhere.

you ask, what is the "West"? think of burma, cuba, and north korea, etc. and you don't see the west.

What does this ... "the technology that is driving most asian countries comes from the west" mean? It's a meaningless ethnocentric statement especially considering that most of the highly competitive and dominant electronics companies out there are Asian name brands like Sony, Samsung, etc. Go look on store shelves sometime and see what the top sellers are.

Not to mention the vaunted western consumer vehicle industry is pretty tepid and also dominated by those "asians" that you seem to belittle at every turn. Ever hear of Toyota and Honda? Hmmm.

It doesn't matter if the original modern inventions were western. The dead inventors certainly aren't collecting royalty checks anymore and neither are their founding companies. The original inventions have moved way past their era.

[steveromagnino]

Guy on my course in Singapore under 30 has six condo's all rented out - he lives with his parents in a HDB flat.

There are a lot of Singaporeans owning property but still live in the HDB - a colleagues HDB flat has porsches, Merc's and Beamers in the car park

They say the reasons for Singapore's success are the port, the HDBs and probably no mention of your 'HDB' the 4 floors aye Prakanong??!

[palm]

Quiksilver; if you added on the ethnicity of the foreigners buying condos, I think you'd find even less white western faces; much of the buying market here in Thailand are Singaporeans, Hong Kong Chinese and now more than ever, Russians and a few Indians and Middle Easterners.

That's certainly what I saw at the presentation I went to for the Prime 11 in Suk 11. One 'obvious westerner' there out of maybe 200 people. The rest were all Asian.

[wintermute]

Quiksilver; if you added on the ethnicity of the foreigners buying condos, I think you'd find even less white western faces; much of the buying market here in Thailand are Singaporeans, Hong Kong Chinese and now more than ever, Russians and a few Indians and Middle Easterners.

That's certainly what I saw at the presentation I went to for the Prime 11 in Suk 11. One 'obvious westerner' there out of maybe 200 people. The rest were all Asian.

I wouldn't be surprised if quite a few of the buyers from asian countries have relatives to broker the deal or other business connections to hedge their investment a bit. They have the advantage of knowing this market better.

[Johpa]

There are several units similar to mine owned by Thais but they are Bt20K to Bt50K more expensive to lease per month. They may remain empty forever but no one is going to take advantage of the owner by getting a cheaper price. It is just crazy to leave these spaces empty for years.

Not so crazy if the unit is being used to launder money. That giant gray market described in Achaan Pasuk's classic book Guns, Girls, Gambling, Ganja: Thailand's Illegal Economy and Public Policy has never gone away and all that cash needs to get a washing before it is wired abroad. Whether it be condos in Bangkok, resorts up north, or restaurants in the provincial towns, the story remains the same.

[Prakanong]

Guy on my course in Singapore under 30 has six condo's all rented out - he lives with his parents in a HDB flat.

There are a lot of Singaporeans owning property but still live in the HDB - a colleagues HDB flat has porsches, Merc's and Beamers in the car park

They say the reasons for Singapore's success are the port, the HDBs and probably no mention of your 'HDB' the 4 floors aye Prakanong??!

Spent a lot of time in there the past 2 week - my pal just split with his Thai gf and needed to get back on his feet

Last night I said he had to go himself and I stayed in Harry's over the road while he went over alone - the therapy has worked.

Might have to go tomorrow though to finish a bottle in the Top 5 bar as there is one left on our 1000 SGD membership - its nearly all Thai's in there though

[Prakanong]

There are several units similar to mine owned by Thais but they are Bt20K to Bt50K more expensive to lease per month. They may remain empty forever but no one is going to take advantage of the owner by getting a cheaper price. It is just crazy to leave these spaces empty for years.

Not so crazy if the unit is being used to launder money. That giant gray market described in Achaan Pasuk's classic book Guns, Girls, Gambling, Ganja: Thailand's Illegal Economy and Public Policy has never gone away and all that cash needs to get a washing before it is wired abroad. Whether it be condos in Bangkok, resorts up north, or restaurants in the provincial towns, the story remains the same.

Exactly - Bangkok buildings are awash with black money.

Was Bangkok Bank not built on the back of the heroin trade too?

[nick2k]

That is the main problem with most farangs here (u.s. & brits) ... they think the world revolve around them ... and they are way wrong !

since you brought it up... my 2 cents.

I think the west (including the usa and britain) contribute a lot to the lifes of people around the world. and it doesn't take a genius to figure that out.

all you need to do is .. look around you.

when I go walk down the streets in MOST cities in thailand, (hel_l, in most CITIES IN THE WORLD), I see... stores from western countries, factories from western countries, technology that came from western countries, movies from western countries, cars from western countries, etc.

the technology around you from refrigerators, televisions, computers, plastics, gasoline, atms, telephones, lightbulbs, airplanes, cable tv, internet, etc. comes from western countries.

look at what happened to the countries that have not joined the west, and see where they stand in economic status.

when you think about it.. in a way, the world does revolve around the west. and I say this in a humble way not wishing to belittle others.

a fact - no bragging intented.

Methinks you forget Asia and its technology just a tad.

Then we have India and China coming up very fast.

As for joining the "West" - do you mean the capitalis economic system, the plural democratic sysem or what?

I am not forgetting anybody. definitely, china and india are a force. but the technology that is driving most asian countries comes from the west. when china and india start coming up with some MAJOR inventions to improve the human race, like some new vaccines, perhaps something that can change our dependence on oil? ..THEN, we can say they have contributed in the way of technology.

like I said, look around you. EVEN in china, I see starbucks, mcdonalds, burger king, televisions, internet, movies, dvds, etc. they are everywhere.

you ask, what is the "West"? think of burma, cuba, and north korea, etc. and you don't see the west.

What does this ... "the technology that is driving most asian countries comes from the west" mean? It's a meaningless ethnocentric statement especially considering that most of the highly competitive and dominant electronics companies out there are Asian name brands like Sony, Samsung, etc. Go look on store shelves sometime and see what the top sellers are.

Not to mention the vaunted western consumer vehicle industry is pretty tepid and also dominated by those "asians" that you seem to belittle at every turn. Ever hear of Toyota and Honda? Hmmm.

It doesn't matter if the original modern inventions were western. The dead inventors certainly aren't collecting royalty checks anymore and neither are their founding companies. The original inventions have moved way past their era.

I get this feeling you are trying to turn this discussion into a racist thing rather than an intellectual endeavor? tell me if I'm wrong?

like I earlier posted, my feedback was not intented to be insulting. it is constructive criticism meant to find a solution to the 50% failure rate of condos.

and in return for my suggestions, I get your "insults". and yes, they are insults. is your ego so fragile that you cannot accept constructive criticism?

your failure to realize that the world revolves around the west is a total denial of the truth. if it wasn't for all these great inventions that came from the west, you wouldn't have your ipods, and pretty much MOST electrical gadgets and devices we all use on an everyday basis.

I think china and india are a force and I welcome their future contributions to the human race. I think that is part of the reason why the west shared all their technology with the rest of the world. I mean, when you have over 3 billion people not inventing things, wouldn't you call that a waste?

as for your mention of samsung, and sony... I think many people would look at south korea and japan as part of the west. hel_l, they sure aren't communist.

before I end this post, let me just point out one last bit of information.... I get this feeling you think I'm "white"? am I correct? well, the truth of the matter is - I'm 100% asian. born and raised in america. my father and mother are both originally from china.

do you think all people in the "west" are white?