New Condo'S Selling Fast?

[travellife]

I noticed a few new condo complexes going up near Lad Phrao and Ratchadaprisek. Rythem 1 and 2, Life Lad Phrao, Issara, The prices for a one bedroom are around 85,000 to 95,000 a sq. meter. Plus about 1,500 to 2,000 for maintenance each month.

The sales people are indicating that at least 50% of the units are sold for the condos that are opening up late next year. Rythem 1 is opening at the end of this year and is about 80% sold.

Given that people have to start monthly payments once the contract is signed, why are people buying so far in advance? That is about 20,000 to 25,000 baht a month in payments until the unit is opened. And that can be 18 months before the unit is available to live in.

Is the condo market really that hot for these new condos? Maybe a good investment?

[trogers]

Heard of the term 'Flipping'? Do not confuse the word 'Sold' with the word 'Booked'.

[richardt1808]

Hi,

It is common knowledge that there is a huge surplus of housing in Bangkok at the moment; and has been for a while.

Buying a condo is a very risky investment - especially if you are planning to rent it out. There are loads of condos for rent, some at rental prices below what the mortgage repayment would be and also remember that it is very hard to sell a second hand condo because Thais perfer to buy new.

As a general rule, it is fine to buy if you plan to live in it yourself, but there are loads of threads here confirming that property per-se is not a sound investment here.

Regarding the OP's point about monthly payments commencing at the time of contract signing, this is not true. A mortgage becomes payable when the transfer is signed and the owner takes occupation of the unit. Occupation cannot happen until the unit is complete. If there are payments being made before the mortgage commences, they would be part of the deposit paid to the developer as part of the down-payment.

Edited July 30, 2010 by richardt1808

[trogers]

A mortgage becomes payable when the transfer is signed and the owner takes occupation of the unit. Occupation cannot happen until the unit is complete.

The unit is considered sold when there is full payment made, transfer of title and owner takes occupation.

Occupation cannot happen until the unit is complete. If there are payments being made before the mortgage commences, they would be part of the deposit paid to the developer as part of the down-payment.

The unit is only considered booked when monthly payments for the deposit are being made. The unit is not completed and no transfer of title can be made. You can say that at this point, you are paying for the booking papers and some very expensive brochures.

[HampiK]

But if you wait, till the building is complete, probably the best appartments are already gone. I think because of this many people make a booking in advanced, so they can choose.

I just was looking at a condo Breeze, which just start building, and it is not possible to buy (book) anything higher than 8 floor (40 floor at all)... So if you are interested in lets say 20 floor, you need to book early, or you try to find a room, when it is finished from people who only booked this room resale.

But if the location is good and the rooms are sold very easy, maybe the price go up a lot.. On the other hand, maybe after finishing the building the condo can become cheaper...I guess it is a lucky game, if you want to save money you can't know 100% what is better. Normaly it should be cheaper if you booked the condo from begining..

But if you want to stay on safe side, then wait till finish, and you can have a look at the condo. You can see what you are buying.

At the end it is up to the buyer what is more important to him. Good location in the building = book

Safety, then wait till finish.

Edited July 30, 2010 by HampiK

[123ace]

Any negative adjustment in interest rates or new negative influence on this sub-sector of the market would lead to a very significant decline with far reaching consequences.

It's ok to dabble in condo speculating, but does it seem remotely likley that population growth alone is fuelling this demand? obviously not. As foreign tenants are declining the rental return method is boderline obselete.

Its a casino.

[trogers]

Any negative adjustment in interest rates or new negative influence on this sub-sector of the market would lead to a very significant decline with far reaching consequences.

It's ok to dabble in condo speculating, but does it seem remotely likley that population growth alone is fuelling this demand? obviously not. As foreign tenants are declining the rental return method is boderline obselete.

Its a casino.

Condo development in a location like Ratchada-Lard Prao are targeted towards local rather than foreign, both in sales and rental. Young local punters believe profits from flipping are much better than buying physical gold. Take any similar location and put up a condo of 2 and 3 bedroom units, and see if bookings are as furious...

Developers and banks are playing along with these flippers. In the long run, a condo development that caters for young families will hold their value better than those of studios and 1-bedroom.

[hhgz]

"Is the condo market really that hot for these new condos?"

The desirability of housing is dependent on the location. Without providing free advertising, one condo next to a BTS station was booked solid in less than 3 hours - and it won't be completed until 2013. That gives the developer, the real estate market, and buyer a few years to decide what to do. Several TVers have posted that they booked condos, changed their minds a couple of years later, and then wondered (hands slapping the foreheads) what their rights were if they wanted to walk away from the deal. Accordingly, before you sign a purchase contract, you must read and understand it completely. ALL conditions and stipulations must be in writing, and you can't base your decision on verbal promises ("Aw, jeez, 3 years ago the salesperson told me that I'd get all my money back with 10% interest is I changed my mind, and not to worry about it.").

[travellife]

Heard of the term 'Flipping'? Do not confuse the word 'Sold' with the word 'Booked'.

Yes, I think flipping is occurring from what I am seeing. One condo that won't be available until August 2011 is almost sold out. And I don't think it is young people buying these because you need a 10% downpayment (like 400,000 to 600,000 baht). Thai people can invest in the stock market but that has scared a lot of people. Normally, people would buy a house and rent it out, but that is not popular here. So the only alternative (with little overhead), is to buy a condo. And owning property has a higher status than owning gold. I think these are the main driving force behind the speculation. There is no where else to easily invest without the overhead.

Occupation cannot happen until the unit is complete. If there are payments being made before the mortgage commences, they would be part of the deposit paid to the developer as part of the down-payment.

The unit is only considered booked when monthly payments for the deposit are being made. The unit is not completed and no transfer of title can be made. You can say that at this point, you are paying for the booking papers and some very expensive brochures.

As an example, lets say a condo cost 4.3M baht. Reserve = 50k. Contract signing = 100k. Down payment over 9 months = 200k. Special Installment = 80k. So before someone moves into the condo, a total of 430k baht is spent. During the 9 monthly payments the unit is considered booked.

So a speculator cannot sell the condo until after the unit is completed (no transfer of title)? I thought it might be an advantage to sell before a bank loan is needed.

[trogers]

Heard of the term 'Flipping'? Do not confuse the word 'Sold' with the word 'Booked'.

Yes, I think flipping is occurring from what I am seeing. One condo that won't be available until August 2011 is almost sold out. And I don't think it is young people buying these because you need a 10% downpayment (like 400,000 to 600,000 baht). Thai people can invest in the stock market but that has scared a lot of people. Normally, people would buy a house and rent it out, but that is not popular here. So the only alternative (with little overhead), is to buy a condo. And owning property has a higher status than owning gold. I think these are the main driving force behind the speculation. There is no where else to easily invest without the overhead.

Occupation cannot happen until the unit is complete. If there are payments being made before the mortgage commences, they would be part of the deposit paid to the developer as part of the down-payment.

The unit is only considered booked when monthly payments for the deposit are being made. The unit is not completed and no transfer of title can be made. You can say that at this point, you are paying for the booking papers and some very expensive brochures.

As an example, lets say a condo cost 4.3M baht. Reserve = 50k. Contract signing = 100k. Down payment over 9 months = 200k. Special Installment = 80k. So before someone moves into the condo, a total of 430k baht is spent. During the 9 monthly payments the unit is considered booked.

So a speculator cannot sell the condo until after the unit is completed (no transfer of title)? I thought it might be an advantage to sell before a bank loan is needed.

Browse around Prakard.com and you will see flippers selling their bookings within a week a new project is launched...

Which flipper will wait out for title transfer?

[yabaaaa]

The unit is only considered booked when monthly payments for the deposit are being made. The unit is not completed and no transfer of title can be made. You can say that at this point, you are paying for the booking papers and some very expensive brochures.

As an example, lets say a condo cost 4.3M baht. Reserve = 50k. Contract signing = 100k. Down payment over 9 months = 200k. Special Installment = 80k. So before someone moves into the condo, a total of 430k baht is spent. During the 9 monthly payments the unit is considered booked.

So a speculator cannot sell the condo until after the unit is completed (no transfer of title)? I thought it might be an advantage to sell before a bank loan is needed.

Browse around Prakard.com and you will see flippers selling their bookings within a week a new project is launched...

Which flipper will wait out for title transfer?

Ones with "flippin " small brains or "flippin" big ba**s!!

[trogers]

The Thai govt should slap on a tax on the transfer of booking ownerships, say 5% of the price of the unit, to prevent flipping bubbles from forming. Have they not learn from the USA sub-prime mess?

Without such bubbles skewing the demand curve, developers and financing banks will face more realistic demand of owner-occupiers and build condo units desired by them, and not dormitory types of studio and 1-bedroom units, that presently are being overbuilt.

[HampiK]

As an example, lets say a condo cost 4.3M baht. Reserve = 50k. Contract signing = 100k. Down payment over 9 months = 200k. Special Installment = 80k. So before someone moves into the condo, a total of 430k baht is spent. During the 9 monthly payments the unit is considered booked.

So a speculator cannot sell the condo until after the unit is completed (no transfer of title)? I thought it might be an advantage to sell before a bank loan is needed.

I know many more condos where you have a down paymanet over 30 month (just started ones). And yes, threre are payments of about 400'000 to 1'000'000 Baht prior completion.

I think you are right about the person who buy this for make a fast profit. It can become difficult. Especially, when after the completion no new buyer is found. Then you have to made the final payment.. and this is can be a hughe amount. I am guessing, if you can sell the condo, then yes you can make a profit of it.

But i don't belive that this will happen always. My guess is that about 50% of this people can't sell. And if you buy the condo after completion, and then sell, you have to pay a lot more taxes on transfer..

In about 2-3 years you can see if this is worth it. I never would book a condo for investment in thailand. I think the risk are to big. Maybe there are some people who have experience with this and they know how everything is working.. but for me.. to big risk. Only for own use

[travellife]

Browse around Prakard.com and you will see flippers selling their bookings within a week a new project is launched...

Which flipper will wait out for title transfer?

So it seems the flipper can sell the booking before the project is complete. I misread that a transfer of ownership cannot happen until the unit is completed. But I guess this is the transfer of ownership from the condo developer to the person holding the booking.

So the flipper is just selling his booking to another potential owner.