Twelve Condominium Projects Suspended

[bingobongo]

oh the humanity, so many dreams and deposits about to disappear, well at least the birds will have new homes to move into

i wonder how the RE spin machine will turn this into a positive developement (that was a pun)........let me guess, the market is sill booming, healthy, etc(insert rainbow here)

fools deserve to be separated form their dough

BANGKOK SETBACK

Twelve condominium projects suspended

Normally, the market can absorb unsold residential stock within one-and-a-half years, Samma said, but now that the economy is reeling from the global recession, it will take twice as long.

http://www.nationmultimedia.com/2009/02/05...ss_30095036.php

Edited February 4, 2009 by bingobongo

[UncleFrank]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

[sorensen]

Lets have the full text in case the link goes dead.

BANGKOK SETBACK

Twelve condominium projects suspended

By Somluck Srimalee

The Nation

Published on February 5, 2009

Developers |run out of money, or fall afoul of municipal requirements

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Property developers have suspended work on 12 condominium projects in Bangkok, in some cases because they face financial difficulties in a deteriorating market.

The suspended projects were to provide 209,230 square metres of floor space and were scheduled for construction in 2008 and 2009.

According to a source at the Bangkok Metropolitan Administration (BMA), construction licenses were sought under article 39 (2) of the Building Law for 133 condominium projects in 2007. Of these, 92 are complete, offering 1.3 million square metres of floor space. However, some of them are still waiting for full construction licences and environmental approvals before they can be transferred to customers.

Thirty-six of the projects are still under construction, and five have been suspended. The five suspended projects were to have provided 37,276 square metres of usable living space. The licences for these projects have now expired.

Additionally, five condominium projects out of a total of 23 that applied for full construction licensing after being completed have now been suspended. They were to offer 35,595 square metres of floor space, and their licences have also expired.

Meanwhile, of 156 condominium projects given construction licences under Article 39 (2) in 2008, a further two have been suspended. They were to have offered 138,359 square metres of floor space. Most of the rest are in the process of construction

The BMA source said some condominium projects were suspended because the developers were required to revise them to meet BMA requirements. Others failed when developers were hit by the deteriorating economic situation.

He said about 70 or 80 residential property projects in Bangkok, many of them complete or nearing completion, are waiting in a queue for Environmental Impact Assessment approval and final approval by the BMA.

Without these approvals, the projects cannot be transferred to the ownership of the home-buyers who made down payments to prebuy them from design drawings. Because the full sales cannot be processed, property developers cannot receive payment and new owners cannot move into their homes.

The source said that, in order to presell city condominiums, developers commonly applied for a construction licence under Article 39 (2) of the Building Law. This allowed them to go ahead with presales and construction.

However, before the residences could be transferred to the new owners, the buildings had to have an Environmental Impact Assessment and also had to meet city regulations in order to receive construction approval from the BMA.

He said home-buyers should be aware that they could be buying units in a property development that was not properly licensed for sale and transfer.

If developers apply for all relevant licences before launching presales and beginning construction, then they can guarantee delivery to their customers, the source said. If, on the other hand, projects are completed without full licensing or Environmental Impact Assessment approval, they may face the need for revision to meet the city's regulations before they can be delivered to customers.

Real Estate Information Centre (REIC) director-general Samma Kitsin said that the number of suspended condominium projects reflected the slump in demand for residential projects. This was exacerbated by the fact that unsold inventory in the property market is now high, and will take two to three years to clear.

According to REIC research, 82,387 units worth Bt205.9 billion remained unsold in the third quarter of last year. Another 30,000 to 40,000 new units will be completed this year.

Out of the 82,387 unsold units in greater Bangkok in the third quarter of last year, 62,325 were in low-rise dwellings including single-family homes, townhouses and duplexes. The remaining 20,062 were condominium units.

Normally, the market can absorb unsold residential stock within one-and-a-half years, Samma said, but now that the economy is reeling from the global recession, it will take twice as long.

"Demand for residences is shrinking, so the supply in the market may take a long time to sell out," he said.

The survey found that 1,126 residential projects that had opened pre-sales and begun construction in the third quarter of last year. These consisted of 244,816 units worth Bt612.04 billion, for an average price of about Bt2.5 million.

Breaking down the total of 1,126 projects, 913 projects with 155,819 units were low rises, with 347 low-rise projects containing 48,479 units located in Bangkok, and 566 projects with 107,340 units situated in the suburbs.

Since the survey, 93,494 of the total 155,819 low-rise units have succeeded in finding buyers, leaving 62,325 units still unclaimed.

The remaining 213 residential projects, offering 88,997 units, were condominiums. Bangkok had 194 condo projects with 69,828 units, and the suburbs were home to 19 condo projects with 19,169 units.

Since the survey, 68,935 of the total 88,997 condo units have been sold, while 20,062 are still waiting for owners.

The market leader in condominium projects in Bangkok and its suburbs is LPN Development, whose managing director Opas Sripayak said demand for city condominiums continued to grow. However, the speed at which projects are sold is slower than last year because home-buyers remain concerned about their future earnings. This has forced developers to turn to smaller projects that will sell quickly, he said.

Opas said some condominium projects that had contributed to the unsold inventory were located far from mass-transit services and could take a long time to sell. His company's new residential projects this year will all be located close to mass-transit systems.

[MeetJohnDoe]

Too bad for all those who bought into the bubble prices of 150,000+ baht psm...for that kind of money, I would rather live in Singapore.

[donx]

I'm very interested in knowing the names of the 12 suspended condominium projects. Anyone willing to venture a guess as to which ones they are? I bet one of them is The Regent Bangkok.

[dave9988]

Too bad for all those who bought into the bubble prices of 150,000+ baht psm...for that kind of money, I would rather live in Singapore.

in a card box in Singapore? Thatd still be more than that.

[think_too_mut]

Too bad for all those who bought into the bubble prices of 150,000+ baht psm...for that kind of money, I would rather live in Singapore.

in a card box in Singapore? Thatd still be more than that.

About 80-90% of Singapore's population are currently living in HDB flats, with high-density housing being a solution to the problem of overcrowding. There are a number of eligibility conditions in order for a flat to be purchased. A buyer must be a Singaporean citizen, and be 21 years of age and have a "proper family nucleus". Singles and unmarried parents are not allowed to purchase new HDB flats. Other requirements concern household status, time requirements, income and other special requirements.[2]

Ownership in public housing is limited to a 99-year lease.

Singapore Housing Development Board

[DonTron]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

Uhhhh! nothing turns me on more than a nice fat pricedrop

I'm ready to shop - bring it on!

[thaihome]

I’m having some trouble following the math in the article but as near as I can tell it is saying that for 289 projects given permits in 2007/8 a total of 12 have been suspended, which amounts to about 4%.

TH

[quiksilva]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

Uhhhh! nothing turns me on more than a nice fat pricedrop

I'm ready to shop - bring it on!

Careful how you step DonTron, Midas et al may spirit you away for scientific experimentation.

They don't believe anyone will buy condo's even when the price drops.

[UncleFrank]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

Uhhhh! nothing turns me on more than a nice fat pricedrop

I'm ready to shop - bring it on!

Careful how you step DonTron, Midas et al may spirit you away for scientific experimentation.

They don't believe anyone will buy condo's even when the price drops.

True. The flock mentality tends to make buyers get in the market after 80% of the gains are had. Top of the bubble purchases like the last few years.

I recall the last correction. Prices were low but buyers were timid. Many big condos had just a few percent occupancy. Afraid the lights might not stay on or maintenance would not be done.

[midas]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

Uhhhh! nothing turns me on more than a nice fat pricedrop

I'm ready to shop - bring it on!

Careful how you step DonTron, Midas et al may spirit you away for scientific experimentation.

They don't believe anyone will buy condo's even when the price drops.

quicksilva I promise not to spirit anyone away for experimentation

I never said people wouldn't buy because they DONT WANT TO- I said

maybe they won't be able to buy because they will not be able to raise the money

-big difference

But let me ask your question- how do you know or anyone how many

' Don Tron's ' there are out there -because when he says he's ready to shop

it suggests he has all the money in cash?

But don't you consider for one moment there is at least the possibility

with all the job losses around the world and considerable depletion of

pension funds and currency exchange rate imbalances

that there won't be quite as many ' Don Tron's ' around

even if prices do drop by 50 percent and if they did drop by that amount

how do you know they won't stay at that level for a very long time?

[dotcom]

it's dejavu all over again

MTT 1997

[midas]

it's dejavu all over again

MTT 1997

David Simister and his team at Richard Ellis ( now CBRE ) advised these

people at the time and I think was very poor advice and showed

an extreme lack of imagination and lateral thinking as to how

they could get their clients out of that mess

[ray08]

Lets have the full text in case the link goes dead.

BANGKOK SETBACK

Twelve condominium projects suspended

By Somluck Srimalee

The Nation

The market leader in condominium projects in Bangkok and its suburbs is LPN Development, whose managing director Opas Sripayak said _{demand for city condominiums continued to grow}. However, the speed at which projects are sold is slower than last year because home-buyers remain concerned about their future earnings. This has forced developers to turn to smaller projects that will sell quickly, he said.

"Demand for city Condominiums Continued to Grow" How can they even print such rubbish , surely if demand was growing ,so would sales ,

Edited February 5, 2009 by ray08

[bingobongo]

so what is the rush to buy? oh yes, that's right, there is none.........

like a bargirl, let it come to you

Asian investment property market turns down

While valuations in Thailand have not fallen at the rate seen in other Asian markets, few transactions were concluded during this period, as buyers and sellers opted to remain on the sidelines in view of global financial worries and local political uncertainty.

http://www.propertywire.com/news/company-n...0902052548.html

[hhgz]

Reading the article which bingobongo referenced:

"The situation in Thailand is very different to many other Asian countries, and cannot be compared to the difficulties we faced in 1997. The debt levels on existing, completed buildings are much lower this time. In the office and retail sectors, there is limited future supply under construction."

In summary, things are much worse in Singapore, South Korea, and Hong Kong.

[dotcom]

Yeah so CBRE are agents for units sitting empty for 12 years. Great sales pitch for their expertise huh?

When in Rome ..........

When the developer runs away maybe CBRE will give you your deposit back ....... NOT.

[midas]

Reading the article which bingobongo referenced:

"The situation in Thailand is very different to many other Asian countries, and cannot be compared to the difficulties we faced in 1997. The debt levels on existing, completed buildings are much lower this time. In the office and retail sectors, there is limited future supply under construction."

In summary, things are much worse in Singapore, South Korea, and Hong Kong.

Even if " The debt levels on existing, completed buildings are much lower this time-

what about the other side of the equation now compared to 1997 ?

i.e. The potential local buyers and renters - how is their debt level now -many have credit

card debt and loans on all manner of consumer goods up to their necks -

were they so stretched in 1997 ?

[midas]

Yeah so CBRE are agents for units sitting empty for 12 years. Great sales pitch for their expertise huh?

When in Rome ..........

When the developer runs away maybe CBRE will give you your deposit back ....... NOT.

I know someone who approached Richard Ellis many years ago with an innovative

idea to suggest adding technology features to all those concrete skeletons that have been lying

there for years and the reaction was the owners were not worried about

losing money on the towers because they were reaping their rewards

on the convention center. But what a dreadful waste of money.

And you would think that you would not build -what is it - 11 towers when you hadn't

even sold the first one-irresponsible and crazy

[dotcom]

They had big dreams & horrible timing.

If the skytrain ran up there it would be a success.

[Gravelrash]

oh the humanity, so many dreams and deposits about to disappear, well at least the birds will have new homes to move into

i wonder how the RE spin machine will turn this into a positive developement (that was a pun)........let me guess, the market is sill booming, healthy, etc(insert rainbow here)

fools deserve to be separated form their dough

BANGKOK SETBACK

Twelve condominium projects suspended

Normally, the market can absorb unsold residential stock within one-and-a-half years, Samma said, but now that the economy is reeling from the global recession, it will take twice as long.

http://www.nationmultimedia.com/2009/02/05...ss_30095036.php

"fools deserve to be separated form their dough". Do they, why is that? They have probably worked long and hard for that money. What sort of <deleted> are you gloating over others misfortune? No doubt someone with nothing yourself, except a bar bill.

[chivo]

i too am curious which 12 projects are being scrapped....

[mmushr00m]

Environmental Assesment is done after the building is completed?? Isnt that ass backwards?? I mean the project is already up and completed so isnt it too late then to say its bad for the area???

Also curious as to which projects as well. I have seen that property plus one on ratchada near ladprao, they had to dismantle an upper floor 'cos it was too high. Now its still sitting empty eventhought the building is finished

As to 50% drop in prices....I definitely will be doing some shopping.

[quiksilva]

I know someone who approached Richard Ellis many years ago with an innovative

idea to suggest adding technology features to all those concrete skeletons that have been lying

there for years and the reaction was the owners were not worried about

losing money on the towers because they were reaping their rewards

on the convention center. But what a dreadful waste of money.

And you would think that you would not build -what is it - 11 towers when you hadn't

even sold the first one-irresponsible and crazy

The developers at MTT are interesting chaps. Very confident. I once saw their plan to turn the estate into a Japanese retirement town, replete with fake volcano!

Need I say more?

Edited February 6, 2009 by quiksilva

[dotcom]

My point was that we have seen this all before; a mere 11 years ago.

I don't care if prices fall or not.

What was that defination of insanity again?

[PattayaParent]

Real Estate companies can no longer cover this up.

50% drop in prices on the way.

Or alternatively a restricted supply will lead to an increase in prices of existing stock???

[rixalex]

oh the humanity, so many dreams

fools deserve to be separated form their dough

"fools deserve to be separated form their dough". Do they, why is that? They have probably worked long and hard for that money. What sort of <deleted> are you gloating over others misfortune? No doubt someone with nothing yourself, except a bar bill.

Sad fact of life that there are plenty of people out there that love nothing more than seeing other people run into problems. It's usually a self-esteem issue.

[tangoll]

There's a German word, schadenfreud, meaning finding pleasure at the misfortune of others, that expresses perfectly the attitutde of the OP here. Hard to see anything of value or constructive that they contribute here. All of us are quite capable to make our own decision as to what to do with our money, and nothing they say can influence us.

[rixalex]

There's a German word, schadenfreud, meaning finding pleasure at the misfortune of others, that expresses perfectly the attitutde of the OP here. Hard to see anything of value or constructive that they contribute here. All of us are quite capable to make our own decision as to what to do with our money, and nothing they say can influence us.

So to answer Gravelrash's question then, he's a schadenfreud <deleted>.