New Condo Development In Bangkok.

[haha]

noticed a new sales office for a new condo development in pratunam district. went in to look at the model home, and get their brochure.

get this, the sales office just opened up, yet the sales rep I spoke to tells me that 60 percent of the complex is already sold out.

I asked her what the prices were. she replied from 4 million up. the studio unit goes for 4 million.

anyway, then, she tells me you have to wait 2.5 years before you can move in. that's the planned completion date.

then, I ask her what the deposit is. she replies 30% of the price of the condo.

reminds me of the scams going on back just before the crash of 1997.

what do you guys think? would any of you buy knowing the above information?

[Erwin1011]

noticed a new sales office for a new condo development in pratunam district.  went in to look at the model home, and get their brochure.

get this, the sales office just opened up, yet the sales rep I spoke to tells me that 60 percent of the complex is already sold out.

I asked her what the prices were.  she replied from 4 million up.  the studio unit goes for 4 million.

anyway, then, she tells me you have to wait 2.5 years before you can move in.  that's the planned completion date.

then, I ask her what the deposit is.  she replies 30% of the price of the condo.

reminds me of the scams going on back just before the crash of 1997.

what do you guys think?  would any of you buy knowing the above information?

<{POST_SNAPBACK}>

You have to keep in mind that the market is showing similar patterns as in 1997 and therefore we may be looking at a similar "correction" towards the end of this year, early next year.

The developers know this and therefore apply similar "techniques" to cash in as much as they can now!

Save your hard earned money until the bottom drops out again in about a years time!

[taxexile]

its not a scam.

a lot of condo units are sold off plan to investors , they are sold on again when the building is nearing completion for a healthy profit.

with bank interest rates at only 1 or 2 per cent , this is an easy way to make some baht.

city smart condo on soi 16 sold out off plan within 2 weeks of being first advertised , its just been completed and resellers are making about 10%.

its just a gamble by the investors that the demand for condos in central bangkok will not diminish.

[Khun Jean]

The 30% is probably the costs for the developer to build a condo unit.

Healthy profits. Nothing wrong with that. If there is a demand, sales are earlier in the proces.

I don't know about being in control of this money when the project is somehow stopped. In the west you can give a bank guarantee, the money is released on completion or on a percentage of completion. But here in Thailand with all the unfinished buildings it is a bit of a gamble.

[penelope]

as a general rule, i never buy off plan (here or in the west). I need the "look and feel" of the real thing.

[Beer-diow, khao-neow, mai-an!]

Agree techniques leave something to be desired. However, the 30% deposit is supposed to reduce speculation vs. only a 5% down payment previously. If this is the Manhattan project then I wouldn't worry too much about the project - it's top grade and backed by a firm with deep pockets. It's also possible that 60% have indeed been sold without the showroom having opened - there is strong demand for A+ projects in that area.

Lower grade projects though...watch out!

[OldAsiaHand]

a lot of condo units are sold off plan to investors , they are sold on again when the building is nearing completion for a healthy profit.

<{POST_SNAPBACK}>

The standard practice here is that a great many of the "sold" units are not really sold at all. They have been reserved by the developer for friends and family and so on. Funnily enough, the deposit that is required of the general public is seldom (never) paid by friends-family-and-so-on. Those units are simply set aside to be resold by these insiders for a profit when the building is (possibly) finished. If the market is weak when that time comes and they cannot sell them, they walk away and leave the lender holding the bag. Nice way to make some money, but of course it only works if you are Thai and properly connected.

[PeaceBlondie]

Are modest, new subdivisions in the suburbs (for working class Thais) done similarly? I have been giving my boyfriend a certain amount each month for his down payment, which should be finished now. He reports that the construction probably hasn't started yet. Now, maybe the B/F is scamming me (that's okay; I plan to break up with him). But it boggles my mind that they'll collect a 'deposit' over 6 to 8 months' time and then not have the house ready yet.

A studio apartment/condo for 4 million baht. Isn't that a wee bit high for Thailand, and speculative? But maybe they've got gold-plated faucets that they bought at a garage sale in Brunei....

[haha]

has anybody noticed the old abandoned condo sales office just off the ploenchit BTS? next to the home pro plus?

the story I heard regarding the place was that all these thai people put up money as deposits, and then, the developers skipped town. taking all the deposits with them.

the average daily salary for a thai person in bangkok is about 200 baht. so, I'm wondering who is supposely buying all these condos?

I keep thinking these supposely sold out condo developments are a fabricated story just to get foreigners to buy. (scam)

I had a friend who bought this one condo off sathorn. at the time when he bought, he was told that his unit was one of the last available. when I go to visit him, I always see a whole "section" (yes, section) of the complex empty.

are there laws against fraud here in thailand?

[kreon]

has anybody noticed the old abandoned condo sales office just off the ploenchit BTS?  next to the home pro plus?

the story I heard regarding the place was that all these thai people put up money as deposits, and then, the developers skipped town.  taking all the deposits with them.

the average daily salary for a thai person in bangkok is about 200 baht.  so, I'm wondering who is supposely buying all these condos?

I keep thinking these supposely sold out condo developments are a fabricated story just to get foreigners to buy.  (scam)

I had a friend who bought this one condo off sathorn.  at the time when he bought, he was told that his unit was one of the last available.  when I go to visit him, I always see a whole "section" (yes, section) of the complex empty.

are there laws against fraud here in thailand?

<{POST_SNAPBACK}>

if you want, just string them along, pay a reservation deposit say 10k, then muck about for a few months, if there is some action, pay a little more, but never pay the full deposit up front, only pay-out the full balance when you can see the unit complete, so basicly pay as you see the construction go.

that's how a friend of mine buys/sells his condo's, if the developer won't go along with this...walk!

[The_Other_Mac]

2.5 years is quite a long time... a 19 storey condo development next to me claimed 18 months to move-in date. So far it looks like they're on schedule. An 8 storey development that a friend bought into took 12 months from sale to handing over the keys and apologising for the pool not being finished (it was a month later though). Both of those were 10% deposit.

4m for a studio is a lot but not impossible... Would anyone likely rent it for 40k or even 33k? Does this development have a footbridge to the Paragon centre perhaps? You didn't mention the area, condos are always priced per square metre here (usually including a notional figure for shared areas such as pool). The most I've heard of anywhere in BKK is 80k per sqm, 70k is more normal for good new condos directly on Sathorn/Suk, so you can do your calculations from that...

[taxexile]

The most I've heard of anywhere in BKK is 80k per sqm,

some of the new luxury condos going up on sukhumvit are 90k-100k / sq.m.

as for empty looking condos , well they may be empty but that doesnt always mean they havent been sold. many are bought by wealthy thais as somewhere to put their cash. they will be sold for a profit when they need the cash , or rented when they need some income.

its not unheard of for thai or european investors to buy them three or four at a time.

[cclub75]

the average daily salary for a thai person in bangkok is about 200 baht.  so, I'm wondering who is supposely buying all these condos?

I keep thinking these supposely sold out condo developments are a fabricated story just to get foreigners to buy.  (scam)

<{POST_SNAPBACK}>

You speak about the "minimum wage" ? It is not the average wage in BKK.

Like you, I sometimes wonder how the thais can buy houses at 6 millions, luxury cars etc....

2 thoughts :

- with european backgrounfd (i speak for myself) it is difficult for us to understand the HUGE difference in wage scale that exist in BKK. Because actually, in europe, if you win a lot, the State take a lot from you (taxes). In Thailand, people who are rich can be VERY rich.

-face : they buy with loans.... They will buy a super sexy and expensive new BMW with a loan on 5465654 years. Even if in the same time, they have to eat only rice (well...) to save costs.

Such behaviour is not as common in europe.

[Jeff Jarvis]

I can think of about a million reasons NOT to put money into an unfinished project.

[Beer-diow, khao-neow, mai-an!]

Then don't buy. Simple as that.

Yes, the market here doesn't work like it does overseas. Yes, there are problems. Yes, be careful. I could be wrong, but I do believe there is a lot of sour grapes from folks who can't afford to buy a condo; maybe feathers get ruffled that BKK dares to have condos going for 4m THB plus when they are farang but only earn 30K per month?

If there really was no demand from Thais (and not only hi so) for condos, then the city wouldn't be full of an ever-growing number of them. Over-supply in the short term, sure, but there is also a lot of real demand. Rising population, rising petrol prices, global property boom, low bank interest, better project quality and locations, more willigness to live alone...and large levels of inherited savings (usually land). Most Thai will sell of a portion of their family land assets to fund a purchase like this. Renting out may not be profitable for many units, but on a 20-30-year view one has to be really pessimistic to think it won't appreciate at least in line with inflation - which is more than bank interest rates have done here. Of course there are all kinds of better ways to invest - but you can't live in them in the meantime.

[haha]

the average daily salary for a thai person in bangkok is about 200 baht.  so, I'm wondering who is supposely buying all these condos?

I keep thinking these supposely sold out condo developments are a fabricated story just to get foreigners to buy.  (scam)

<{POST_SNAPBACK}>

You speak about the "minimum wage" ? It is not the average wage in BKK.

Like you, I sometimes wonder how the thais can buy houses at 6 millions, luxury cars etc....

2 thoughts :

- with european backgrounfd (i speak for myself) it is difficult for us to understand the HUGE difference in wage scale that exist in BKK. Because actually, in europe, if you win a lot, the State take a lot from you (taxes). In Thailand, people who are rich can be VERY rich.

-face : they buy with loans.... They will buy a super sexy and expensive new BMW with a loan on 5465654 years. Even if in the same time, they have to eat only rice (well...) to save costs.

Such behaviour is not as common in europe.

<{POST_SNAPBACK}>

no. I'm not talking about "minimum wage". my information comes from the bangkok post which is one of the local newspapers. the average daily salary in bangkok is about 189 baht. for outside of bangkok, it is about 139 baht.

it seems about once a year, the bangkok post will come out with these figures for people to read. sort of like what the time magazine does in regards to people in the united states.

since you don't know... let me educate you a little more. a person working at one of the fast food places like kfc, subway, mcdonalds, burger king, etc all make about 25 baht an hour.

maids make about 1500 to 5000 baht a month depending on whether they are live-in or parttime.

according to one issue of the bangkok post that I read, only about 20% of the people in thailand have a high school degree or above. the 80% who don't have a higher degree make from 3000 to 6000 baht a month. the 20% who do have a higher degree usually start working at salaries around 7k baht a month, and work their way up to the teens after a few years - if they are lucky.

teachers at public schools make about 5k to 7k a month.

[baht&sold]

I used to have a thai website bookmarked for the central bank property foreclosures up for bid, anyone have that link? If you're a 'need to feel/see' type, maybe this is a way to go.

Also, just how many condo units are on tap for Suk/Silom in this year and next?? Seems like they're pouring forms all over Suk especially and those are just the one's we see! Banks (CAR's) and Co's seem better capitalised than last time round - that 'should' bode better for new developments and off plan buyers???

[haha]

Then don't buy. Simple as that.

Yes, the market here doesn't work like it does overseas. Yes, there are problems. Yes, be careful. I could be wrong, but I do believe there is a lot of sour grapes from folks who can't afford to buy a condo; maybe feathers get ruffled that BKK dares to have condos going for 4m THB plus when they are farang but only earn 30K per month? 

If there really was no demand from Thais (and not only hi so) for condos, then the city wouldn't be full of an ever-growing number of them. Over-supply in the short term, sure, but there is also a lot of real demand. Rising population, rising petrol prices, global property boom, low bank interest, better project quality and locations, more willigness to live alone...and large levels of inherited savings (usually land). Most Thai will sell of a portion of their family land assets to fund a purchase like this. Renting out may not be profitable for many units, but on a 20-30-year view one has to be really pessimistic to think it won't appreciate at least in line with inflation - which is more than bank interest rates have done here. Of course there are all kinds of better ways to invest - but you can't live in them in the meantime.

<{POST_SNAPBACK}>

I can buy a condo. but I won't because I believe there is a impending crash about to occur within the next couple of years. so, why buy now when I can buy later? wouldn't you agree?

if I was about to buy a condo in a city that I knew nothing about, I would really appreciate somebody giving me the scoop. wouldn't you?

take for example the property crash of 1997. prices for many units dropped at least 50%. if someone knew this, they could benefit from this information immensely.

I'm sure many people would welcome this knowledge.

the only people who I see who wouldn't like this information out is the condo developers or owners.

and evidently, you are one or the other, right?

[taxexile]

but I won't because I believe there is a impending crash about to occur within the next couple of years.

what makes you think there will be a property crash within the next couple of years.

[cclub75]

no.  I'm not talking about "minimum wage".  my information comes from the bangkok post which is one of the local newspapers.  the average daily salary in bangkok is about 189 baht.  for outside of bangkok, it is about 139 baht.

it seems about once a year, the bangkok post will come out with these figures for people to read.  sort of like what the time magazine does in regards to people in the united states.

since you don't know...  let me educate you a little more.  a person working at one of the fast food places like kfc, subway, mcdonalds, burger king, etc all make about 25 baht an hour.

Well, let me complete your education ALSO : the minimum wage in BKK is

170 THB (update 2004)

http://www.boi.go.th/english/how/labor_costs.asp

A student for instance who work in internet cafe is paid 25 bath per hour. For 8 hours, do the math.

Now, it is unlikely from my point of view that the "average wage" (170) should be only 10 % more that the "minimum wage" you stated (189 THB). Bangkok concentrates all the wealth of the country.

The proof :

A study from Labour Studies and Planning Division , Department of Labour Protection and Welfare shows that in "Bangkok metropolis" the AVERAGE WAGE (for privates companies) in 2001 was 10066 THB, well beyond the "minimum wage".

You will find the Excel file here :

www.thailandoutlook.com/NR/rdonlyres/ 74F3AA29-E915-44D8-93A6-66E347BF9DB4/0/table.xls

Of course, we have to take in account, all the public sector... where people are paid less. But still at the end, your figure of 189 THB/day for "average wage" doesn't make sense.

Cheers,

Chris

[The_Other_Mac]

Of course, we have to take in account, all the public sector... where people are paid less.

<{POST_SNAPBACK}>

My heart bleeds for all those poor workers in the police, Customs, Land Dept, etc.

But then again, even the Prime Minister's salary is a measly 70,000 baht. Using Western assumptions, that should allow him to get a mortgage for around 2.5 million. No wonder he plans to hold onto the position for 20 years.

[cclub75]

[My heart bleeds for all those poor workers in the police, Customs, Land Dept, etc.

But then again, even the Prime Minister's salary is a measly 70,000 baht. Using Western assumptions, that should allow him to get a mortgage for around 2.5 million. No wonder he plans to hold onto the position for 20 years.

<{POST_SNAPBACK}>

You've got a point indeed !

That's why beside the "average wage" with official figures we should speak about the "total income" (including all the gray and black economy) !

And know we can understand actually how they can buy BMW, Mercedes etc....

;-)

[PeaceBlondie]

Most of haha's wages for Bangkok sounded in line, until he ended it with,

"teachers at public schools make about 5k to 7k a month."

Starting out of rajabat or teacher's college, 7K might be right. My boss makes 30K (she's Thai, age 49); I know other provincial matayom teachers who make 19K and 27K. So, there's a broad range.

There are some high wage earners out there; some independent businesss owners that are doing very well. Big range. But the hotel workers you see (below managerial level), 3000 to 6500/month.

As for condos - cheap, small condos for 2 or more working class Thais - you might make a better return on your investment renting out 4K apartments than trying to find rich folks who pay 18K-24K/month rent. In that higher range, I think that most rich Thais would buy, not rent.

[Heng]

Save your hard earned money until the bottom drops out again in about a years time! 

I don't know about that. Even in 1998 and beyond, there was never really a time for "bargain" basement sales (so it's important to remember that "bargain" and "market bottoming out" are also relative terms). I knew of one case of an individual buying an empty piece of land for 5 million and selling it for 100 million. After the "crash," the property merely went back to the 5 million selling price.

As for the original poster.... you might want to research some of AP Citismart's other 10-12 projects around town, some still under construction, several already completed. For example: their Baan Klang Muang Srinakarin property, about 400 town homes. Completely sold out at 3-5 million a piece. The sales office is no longer there... I doubt it's a "scam." Drove around in there the other day, the cheapest offering out of maybe half a dozen of those homes for sale (owner to owner... NOT from the developer) is 6 million and a couple asking 7.5 million.

[Heng]

Starting out of rajabat or teacher's college, 7K might be right.  My boss makes 30K (she's Thai, age 49); I know other provincial matayom teachers who make 19K and 27K.  So, there's a broad range.

There are some high wage earners out there; some independent businesss owners that are doing very well.  Big range.  But the hotel workers you see (below managerial level), 3000 to 6500/month.

Broad range indeed, PB. I'm not sure why people like to take the 170 Baht a day wage rate or 9,000 a month teacher salary and assume that this is the target market for 4 million Baht homes. No duh?

That independent business owner range is broad in itself. It's easy to overlook Chatuchak or MBK market stall sellers or even many open air market vendors. However many of these folks are working 350+ days a year, selling 2,000 to 200,000 Baht A DAY, likely paying ZERO in taxes, and living frugally (at least until they buy that BMW, build that apartment complex, send their children to school abroad, or whatever). I know more than a few of these first generation city merchants who have their upper X millions within a couple years of doing business.... nevermind those whose families have been in business for generations.

[Beer-diow, khao-neow, mai-an!]

Thanks Heng, I was going to underline the business owner story that these posters always overlook, but you saved me the effort.

Btw, I am sceptical about the GLOBAL property market and its outlook, not just in LoS. However, I buy to live in not make a short-term profit, although long term profits (25 years) are looking good - and I've always got in very early in cycles.

I like the idea of trading up in a falling market IF we see one, but in Thailand this is very unlikely to happen, sadly. For those of us who were here in/after 97, there were relatively few real bargains for all kinds of reasons. By all means refrain from buying right now if you feel nervous, but don't presume everyone in the market is a sucker.

[Jeff Jarvis]

Prices can go down.

In 1996 I was looking at a piece of land for $40k usd.

After the devaluation of the baht and drop in prices, I bought the piece for $10k usd.

I doubt we will see an opportunity like that again.

[bambob]

if you have been following the property market analysts articles in the papers , they seem to see problems with the high end of the condo market which is practically dead .

they are all building for the mid range and bottom of the market but there are too many fly by night operators building for a quick buck and then they get out when things look

dodgy .

so if you buy off plan for years in advance thats a risky proposition in LOS when things are dicey.

all the articles i have read lately in the thai press advise against buying off plan for the foreseeable future .

If you are buying off plan then you need to make absolutely sure that the developer has a very good track record especially in respect of the last property crunch .

and not a get rich quick con artist of which there are many in the property game.

may farangs and thais lost a bundle at the asian crash on pie in the sky condos .

they never saw their money again .

[bambob]

noticed a new sales office for a new condo development in pratunam district.  went in to look at the model home, and get their brochure.

get this, the sales office just opened up, yet the sales rep I spoke to tells me that 60 percent of the complex is already sold out.

I asked her what the prices were.  she replied from 4 million up.  the studio unit goes for 4 million.

anyway, then, she tells me you have to wait 2.5 years before you can move in.  that's the planned completion date.

then, I ask her what the deposit is.  she replies 30% of the price of the condo.

reminds me of the scams going on back just before the crash of 1997.

what do you guys think?  would any of you buy knowing the above information?

<{POST_SNAPBACK}>

is it possible considering the area has plenty of empty condos ?

just look at that condo opposite the amari hotel just along from pantip plaza .

its empty and always has been .

worst of all is the mall going up right in front that will block the views and make them unsalable . pity the poor sucker who bought one there .

property developers have to keep building come what may otherwise they go bust -

there cant be any slack spells . whether they sell those condos is erelavent .

the companies balance sheet still looks good until the crash comes along .

[charles]

they are all building for the mid range and bottom of the market but there are too many fly by night  operators  building for a quick buck and then they get out when things look

dodgy .

so if you buy off plan for years in advance thats a risky proposition in LOS when things are dicey.

all the articles i have read lately in the thai press advise against buying off plan for the foreseeable future .

If you are buying off plan then you need to make absolutely sure that the developer has a very good track record especially in respect of the last property crunch .

30% is a pretty hefty deposit especially for something that will not be completed (hopefully) in 2.5 years.

However, for the "mid-market" I'm not sure deposits are so hefty. L.P.N., who are something of a mid-market condo factory, charge just 10% for off-plan and much of that is paid in installments going right up to the time of building completion/unit transfer. So given the price of their units you are looking at eventually paying from 100,000-250,000 baht in advance of your unit being ready for transfer. Not too bad really.

Project completion times for L.P.N. are about a year to a year and a half. Many of their projects seem to be fully or virtually sold-out by the time of completion. You'd probably be able to get a unit one way or another but probably not one of the more choice ones. Buying off-plan has many obvious disadvantages, but on the other side you do get the possibility of a well appointed unit at a decent price. That's the risk you take.