Unsold Residential Inventories Grow

[clausewitz]

Unsold residential inventories grow | Thailand Real Estate Forum

Unsold residential inventories grow

Posted on 04 June 2010

The inventories of unsold properties held by Thailand’s leading developers has risen by nearly 3 per cent since the end of last year as property firms strive to take advantage of growing demand.

The number of new residential projests launched in the first quarter of this year contributed substantially to the inventory growth.

According to a survey by The Nation,the 25 property firms listed on the Stock Exchange of Thailand reported inventories worth a combined Bt145.1 billion at the end of March-up by 2.9 per cent in just three months,from Bt140.9 billion at the end of December.

Unilisted property companies also have high inventories in Bangkok and its suburbs,worth more than Bt100 billion at the end of March,according to survey by the Real-Estate Information Centre (REIC).

The centre’s director-general Samma Kitsin said the inventories were now of a size that would take more than two years to sell,based on economic growth of 3 to 4 per cent per year.

Normally,between 66,000 and 75,000 residential units are sold in Bangkok and its suburbs every year,with a value between Bt120 billion and Bt150 billion,he said.

According to financial results filed at the end of March,Land&Houses reported an inventory worth Bt24.1 billion,an increase of 5.2 per cent from the end of December,Sansiri reported an inventory worth Bt16.2 billion-a 20-per-cent hike from the end of December-and Asian Property Development said it had an inventory worth Bt16.1 billion,up 2.5 per cent from the end of last year.(see graphic)

The inventory of unsold residences rose during the first quarter of this year because nost property firms launched new projects in the second half of 2009,when they saw strong demand growing in the residential market following the tough period of political uncertainly earlier in the year.

Most developers also sped up their construction of residences in the first three months of this year so they could transfer homes to new owners before the government’s taxation incentives for the property industry expired at the end of March.At the time,they didn’t believe the government would extend the incentives.The outcome of these conditions has been the rising residential inventories.

“We believe that the residential inventories in Bangkok and its suburbs will continue to rise in the second quarter since most home-buyers have delayed their decision to buy a residence because of the political riots”,Samma

[jackdawson]

u mean everything is not 122% peachy w/ thai real estate ?

that can't be right

[Pib]

Realtors will just take this story, put their "Its a great time to buy" spin/hype on it, and continue their age old song of "Now Is The Best Time To Buy (or Sell) a Home."

[123ace]

Realtors love tenants as much as buyers, we equally need those that can't or chose not to buy to establish an effective market Landlord and Tenant system. So JD, please don't buy and please encouarge others not to. Fine by me.

[ESB7]

Realtors love tenants as much as buyers, we equally need those that can't or chose not to buy to establish an effective market Landlord and Tenant system. So JD, please don't buy and please encouarge others not to. Fine by me.

Well said and so true but some posters just dont get it and are blinkered in their vision without looking at the bigger picture. If everody used their way of thinking, we would all rent our cars, bikes, clothes, washing machines, laptops and even toothebrushes as apparently we dont understand the 'real time value of money'

[trogers]

Not an informative report. What is the quantum of the initial inventory as a percentage to total output? Five, ten, fifteen or more percent? If we have this figure, we can then picture the state of the market when we factor in the 3% rise in inventory.

[hhgz]

What a great article! It confuses the "number of unsold condos" with the "value of unsold condos". Regardless, the people who want to buy a condo will buy a condo. The people who don't want to buy a condo won't.

[Pib]

Realtors love tenants as much as buyers, we equally need those that can't or chose not to buy to establish an effective market Landlord and Tenant system. So JD, please don't buy and please encouarge others not to. Fine by me.

Well said and so true but some posters just dont get it and are blinkered in their vision without looking at the bigger picture. If everody used their way of thinking, we would all rent our cars, bikes, clothes, washing machines, laptops and even toothebrushes as apparently we dont understand the 'real time value of money'

The "real time value of money" phrase/slogan many times only works when you are in the right investment(s), which will probably require you to jump in and out of the right investment at the right times over an extended period; and in some cases also live long enough for the right investment to gain substantially. Real estate investment is one of those investments where you need to be able to buy and sell at the right time which may not be easy to do depending on the housing market, your job situation, how long you plan to live in the home, your personal situation, etc...etc...etc. As we've seen in the ongoing housing/mortgage problem in many countries, real estate investments have sent many individuals and companies to the poor house regardless of the mortgage tax advantage usually provided.

Now with above being said, I do consider real estate generally a good l...o...n....g term investement if the real estate is in the right location, and if world and personal events works out for a person. The "if's" definitely need to work out for a person.

[Pib]

I think Thailand can reach the 3 to 4% because of the pent up domestic demand assuming civil unrest remains suppressed for the rest of the year. And I do think "suppressed" is the right word based on ongoing govt actions, not to imply the actions are not needed. But as you, it wouldn't surprise me if Thailand comes in under 3%. And such growth combined with the political risk factor is not enough growth from an emerging world market to give potential investors a warm fuzzy.

[thaihome]

Now I'm just a simple old country boy but this is what I think is the key sentence in all that gobble-de-gook in the article.

Quote:

The centre’s director-general Samma Kitsin said the inventories were now of a size that would take more than two years to sell,based on economic growth of 3 to 4 per cent per year.

Unquote

Says it all, doesn't it? My question is: Will Thailand reach that 3 to 4 percent economic growth this year?

Personally, I wouldn't bet money on it.

With what something like 9% in the first quarter, it certainly is on the way, don't you think?

TJ

[Zstarx]

Now I'm just a simple old country boy but this is what I think is the key sentence in all that gobble-de-gook in the article.

Quote:

The centre's director-general Samma Kitsin said the inventories were now of a size that would take more than two years to sell,based on economic growth of 3 to 4 per cent per year.

Unquote

Says it all, doesn't it? My question is: Will Thailand reach that 3 to 4 percent economic growth this year?

Personally, I wouldn't bet money on it.

With what something like 9% in the first quarter, it certainly is on the way, don't you think?

TJ

I'd question the figures, according to the Economist magazine, in the lastest quarter Thailand had GDP growth of 16% ( over the previous quarter ), however apparently there is only 1% unemployment

[Pakboong]

Now I'm just a simple old country boy but this is what I think is the key sentence in all that gobble-de-gook in the article.

Quote:

The centre's director-general Samma Kitsin said the inventories were now of a size that would take more than two years to sell,based on economic growth of 3 to 4 per cent per year.

Unquote

Says it all, doesn't it? My question is: Will Thailand reach that 3 to 4 percent economic growth this year?

Personally, I wouldn't bet money on it.

With what something like 9% in the first quarter, it certainly is on the way, don't you think?

TJ

I'd question the figures, according to the Economist magazine, in the lastest quarter Thailand had GDP growth of 16% ( over the previous quarter ), however apparently there is only 1% unemployment

It is not the 1% unemploylment that really matters, it is rather the 80% underemployment.

[thaibkk]

in a normal economy, prices would go down, but that logic is never followed in Thailand

they will just wait till some people show up ....

remember when decades ago, they started to build big buildings, the crisis came and they were left like that for years .... unfinished...

maybe make it less complicated and give a residence visa to anyone who purchases property here worth more than 5 million baht ?

the whole idea that you work here, for example, or are married... and you either lose your job or your marriage (misses takes you for all you got)

that they kick you out in just 7 days.... even you have condo, car, etc....

[hhgz]

"Inventory" consists of several components, confusing the reporter and TVers alike. A real estate developer's inventory consists of: completed units ready to move in, units in any other stage of construction, and undeveloped land. During the past couple months, there have been several multi-billion THB land sales, and those become part of the developers' "unsold inventory". The article implies that there are 120,000 newly completed homes and condos in the greater Bangkok area, and that's simply foolish.