Bangkok Condo Prices Surging

[Gary A]

Just remember when you read a thread like this that the first liar never has a chance. Another liar can easily top the first one.

[pampal]

I bought 4X27 sq meter condos from Aspace at 1,036,000 baht a piece and they have appreciated over the last year to 1,436,000 each. It's much better to buy the smaller units, and contrary to popular opinion, they appreciate just as well if not better than the larger units. 40 percent a year is a good return on investment. I don't plan to live in them, but rent or sell them.

[thaihome]

You mean the one's that have finished or the one's that have stopped construction (see The Regent)?

As for Grade A office space, true not much currently available at the sizes you mention but then again, not much demand unless you can give me examples of companies who are looking but can't find any.

So you mention one development by an under capitalized developer and an overextended contractor and call it a crash? I don’t disagree that there are going to be some other casualties in the future, but that is mostly going to be because cost is rising too fast on property already sold and they are not going to make any money; not due to being able to sell the units. It's going to get rough and I know you all will enjoy it immensely. I just don’t think it has happened yet or will be as severe as you hope.

There is a large demand for class A space of that size. I know os many companies looking right now. A lot is being driven by a certain office complex not renewing leases on something like 100k sq meter in space that is causing many companies to go looking. I do know one company that is going to need something like 30k sq meters (yes 30k) in 3 years as their lease is not going to be renewed and they are going to consolidate in one location. In addition many companies are rapidly expanding as their business picks up and they hire more people so they are looking for space. The space is there, but it is going fast and the new buildings are filling up multiple floors at a time.

TH

[lardy]

I bought 4X27 sq meter condos from Aspace at 1,036,000 baht a piece and they have appreciated over the last year to 1,436,000 each. It's much better to buy the smaller units, and contrary to popular opinion, they appreciate just as well if not better than the larger units. 40 percent a year is a good return on investment. I don't plan to live in them, but rent or sell them.

spot on

[bingobongo]

PROPERTY

Residential, resort oversupply seen

Robert Collins, managing director of the property agency Savills Thailand, said that some aspects of the residential and resort sectors now show similarities to Thailand's pre-1997 office market. He notes the sheer volume of residential supply, particularly condominiums, not just in Bangkok but in key resorts as well, which is being brought into the market by big, experienced developers plus some newcomers.

:ohmy: Fast-forward to today's residential and resort markets, and signs that there could potentially be a downturn in certain sectors if the volume of the new supply entering the market continues at the current level.

The risk that new brokerages now face is greatly magnified by their dependence on foreign buying which, Mr Collins pointed out, is losing steam amid the current global slowdown.

http://www.bangkokpost.com/310708_Business...l2008_biz47.php

[quiksilva]

As far as class A office space, suggest someone try and find 3k+ sq meters right now and see how little is actually available.

I can find you some but yes there are far fewer options today than there were five years ago. BKK James To say there's no demand is simply not true. We have a several transactions going on at 3,000 sqm right now, and larger. In fact I know of two office transactions larger than 50,000 square meters, that are active as I type.

Vacancy rates are fairly healthy at ~10% in Grade A and Grade C but much tighter in the middle band which many perceive as representing best value for money.

This though will change over the coming 18 months, with the completion of the 450,000 square meter government center, we expect as much as 200,000 square meters to become available in the CBD from existing stock as government offices relocate to ChaengWattana from the private sector. This coupled with 300,000 sqm of new / recent supply could lead to a softening in the market, despite the size of some deals that are happening right now.

If we took just private sector stock, then I'd agree with you TH, but the government center will cause an impact, unless demand can recover to levels seen before the coup, and even if that did happen, it would still mean limited rental growth for a year. (which is not a bad thing, if you are an occupier!).

For anyone interested, in learning more we (Knight Frank) have just produced our Half Year office market research report, which is free and can be supplied upon request. Drop me a PM with your email address and I'll send it along.

Edited August 1, 2008 by quiksilva

[Livinginexile]

PROPERTY

Residential, resort oversupply seen

Robert Collins, managing director of the property agency Savills Thailand, said that some aspects of the residential and resort sectors now show similarities to Thailand's pre-1997 office market. He notes the sheer volume of residential supply, particularly condominiums, not just in Bangkok but in key resorts as well, which is being brought into the market by big, experienced developers plus some newcomers.

:ohmy: Fast-forward to today's residential and resort markets, and signs that there could potentially be a downturn in certain sectors if the volume of the new supply entering the market continues at the current level.

The risk that new brokerages now face is greatly magnified by their dependence on foreign buying which, Mr Collins pointed out, is losing steam amid the current global slowdown.

http://www.bangkokpost.com/310708_Business...l2008_biz47.php

Poor old Bongo...still trying down ramp the condo market is see

Following below is taken from the same link you posted from the Bangkok Post;

Read it and weap Bongo.

Given current conditions, there is likely to be pressure on high-end property in Thailand in the medium term. ''It's fair to say, though, that the market domestically still has a few bright spots, particularly well-planned and well-executed developments in good locations conceived by financially strong developers. Those projects that fall into this grouping are still performing very well.''

Another area that should thrive is property with equally good demand from both domestic and international buyers. ''Condominiums that appeal to Thais and foreigners really outperform the market trend. Where there is equal demand, the projects are very healthy.''

Where individual owners are concerned, Mr Collins says that those owning a completed unit are unlikely to see prices go down because construction costs have risen considerably.

[scottyscott]

I bought into a condo a couple of years back. A project called the Regent Residences on Sukhumvit Road near Ambassador hotel. I don't know what's happening with it. In theory, another company took it over and it will be completed at the end of 2009 (2 years late). However, it's been about a year since this happened and as far as I know, there's been no further construction.

I bought for about B11,700,000. I paid 25% down payment for it.

If it ever gets built, I'll be satisfied with it. It's a great location. I'm past the point of being concerned now. I just think of it as a bonus if I get my money back or the condo.

Anyone have any advice on what I should do further?

Your sales contract has a termination clause in it. The american company that took it over should honor it it if all you want is your deposit money back. Contact them directly.

[pkrv]

Really well at 1.4 million each I would love to meet those westerners earning that in a couple of months? Doctors in the Uk maybe on this sort of money at a push.

Bar girls eh sheeeeeeeesh you sure know your stuff dont you!!

Step 1: there are at least 5 people on this board that earn that kind of money in BKK. OK, maybe 3 months salary, not everyone can make it in 2. And not everyone would trash 1.4 mil baht on 34sqm room.

Step 2: when we are talking real estate in BKK, how many have 34 sqm rooms as their ideal of property?

Not only here, but in real life, in general?

Step 1: learn to quote.

Your implication is that MANY westerners can afford this amount in 2 months which is clearly wrong even in the west people earning this sort of money in 2 months would be very very small. Now your saying 3 keep moving the goal posts.

So you're telling me many westerners earn about 700000 baht per month??? I dont think so.

I dont think this board is representative of "many wetserners" typical salaries even if you know of 5 here that still leaves another 62000 members that dont, some may earn more but the majority will be earning a lot less.

Step 3 learn to get step 1 and 2 first then put step 3 not step 1 again .... bit silly this nitpicking isnt it? (re your learn to quote comment)

I know many earning that much, and more. Frankly, I have never thought Thaivisa a very good representative sample of farang in Thailand. It is representative of teachers, retirees etc but very few expat salary types post here. There are 30 apartments in my building. Everyone of them has a farang family or farang family in it, and virtually all of them are working as diplomats or senior execs in international companies. I doubt if any of them have ever heard of TV, let alone post on it.

More fool them

[dotcom]

I know many earning that much, and more. Frankly, I have never thought Thaivisa a very good representative sample of farang in Thailand. It is representative of teachers, retirees etc but very few expat salary types post here. There are 30 apartments in my building. Everyone of them has a farang family or farang family in it, and virtually all of them are working as diplomats or senior execs in international companies. I doubt if any of them have ever heard of TV, let alone post on it.

So every one of them is renting & they have zero incentive to haggle over price. Reason? Cuz the company is picking up the tab. Ditto the best & most expensive International schools, Benz with driver, memberships to sports clubs etc.

Salary = 200,000 baht a month? Absolutely. Bangkok is a hardship area.

[thaihome]

...Salary = 200,000 baht a month? Absolutely. Bangkok is a hardship area.

Actually that is more like just the housing allowance. Salary is the same as in home country plus 25% (or so) for overseas assignment.

TH

[dotcom]

What kind of salaries are they pulling down?

[Livinginexile]

...Salary = 200,000 baht a month? Absolutely. Bangkok is a hardship area.

Actually that is more like just the housing allowance. Salary is the same as in home country plus 25% (or so) for overseas assignment.

TH

Correct

I pull 400K+ per month (excluding all allowances) working in Dubai.

If I worked in Thailand for the same company my salary+allowances would be the same.

[thaihome]

We get a 15% uplift for working overseas. There are additional uplifts for “unique aspects of the location” ranging from 10% to 35%. Amazingly, we get 10% for Thailand (total 25%) and Dubai doesn’t get anything (total 15%). Dubai does have more work hours per week so that pay is still more. This excludes allowances which cover housing, cost of living adjustment for locations, home leave, education, etc.

Here is a pretty good graph showing base salary ranges in my industry.

Design Engineer - US

TH