Jbr- Bkk Condo Market

[Baaadmutha]

I just returned to my home in Singapore after a one month visit to Bkk. It had been almost two years since I was last there. Im now interested in investing in a condo in the city near a bts because i feel prices peaked and may come down significantly. Perhaps there is value to be had now or in the next 12 months in Bkk real estate?

These are some of my observations in regards to the city and the condo market:

- The city seems to be cleaner than before. I hardly noticed any trash in the streets, and far fewer rats running around.

- the new airport-city train is a nice touch. Makkasan station is ginormous. I wonder why they made it so large? looks like a small airport terminal. Hard to ge a taxi there. It's a giant cavernous waste of money for the most part.

- No other significant changes to the city in the last two years.

- There appears to be one or two new malls since last visit. Not many new commercial/office construction progects to be seen along Sukhumvit.

- There are a number of new Condos along the Suk BTS line.

- There appears to be a buyers market for condos, as there were numerous promotional incentives offerred in newspapers and billboards for ready built protects.

- Developers are quoting prices for the units that are complete. Usually broad publication of prices by developers is a bearish signal for the real estate market.

- There is an enormous potential to build new condos on or near btw lines as there are a number of run down or derelict properties everywhere. This indicates that there is a huge supply of land that could be developed in the future. Large supply typically suggests low prices.

-What are the members thoughts about my observations?

-Do you think the city condo prices can fall significantly further from where they are now?

- are you hearing of allot of distress sales for condos in the city?

[trogers]

I just returned to my home in Singapore after a one month visit to Bkk. It had been almost two years since I was last there. Im now interested in investing in a condo in the city near a bts...

Here is another classic case of being familiar with BKK without sufficient depth.

BKK is not Singapore. Staying 50m from a main road like Sukhumvit means living with traffic noise and air pollution. Not many of us were raised as shophouse kids...

[Baaadmutha]

I just returned to my home in Singapore after a one month visit to Bkk. It had been almost two years since I was last there. Im now interested in investing in a condo in the city near a bts...

Here is another classic case of being familiar with BKK without sufficient depth.

BKK is not Singapore. Staying 50m from a main road like Sukhumvit means living with traffic noise and air pollution. Not many of us were raised as shophouse kids...

What are you trying to say in your post? Are you trying to answer some of the questions in the original post?

[trogers]

I just returned to my home in Singapore after a one month visit to Bkk. It had been almost two years since I was last there. Im now interested in investing in a condo in the city near a bts...

Here is another classic case of being familiar with BKK without sufficient depth.

BKK is not Singapore. Staying 50m from a main road like Sukhumvit means living with traffic noise and air pollution. Not many of us were raised as shophouse kids...

What are you trying to say in your post? Are you trying to answer some of the questions in the original post?

My answers are usually crouched in deeper depths if you care to analyse them. Look at the new condo developments shooting up next to the main road in the longer term. Picture how they are occupied or unoccupied' date=' and how prices can fall or the rising level of distress sales.

Your questions:

-What are the members thoughts about my observations?

-Do you think the city condo prices can fall significantly further from where they are now?

- are you hearing of allot of distress sales for condos in the city?

[Baaadmutha]

Considering Bangkoks miserable traffic problems, proximity to a BTS/mrt station is probably the most important location factor for most condo buyers/investors.

If the price of the unit is reasonable, it will always be a good investment.

Edited April 16, 2011 by Baaadmutha

[hhgz]

"...a one month visit to Bkk"

I think it'll take someone longer than that to get an accurate view of the real estate market in any country.

"The city seems to be cleaner than before. I hardly noticed any trash in the streets, and far fewer rats running around."

Are you sure you were in Bangkok?

"Do you think the city condo prices can fall significantly further from where they are now?"

Can? Of course. Will they? Nope - do not hold your breath. The prices did not tumble during the recession and, since the economy is recovering, I wouldn't expect developers to slash prices now.

"...are you hearing of allot of distress sales for condos in the city"

No. Some developers are offering minor incentives (some TVers believe that the 2-for-1 sales promotions are right around the corner...) but, if you're expecting a "steal", you will be disappointed.

"If the price of the unit is reasonable, it will always be a good investment."

There you go. Too, there's a risk in any investment - Pokeman cards, or diamonds - nothing is guaranteed. You should also familiarize yourself with the method that a developer finances a project, and understand, generally, how many units a developer needs to sell in order to turn a profit. That percentage is actually pretty low, and some posts infer that a developer will panic and sell units at a huge loss, just to unload them. That has not happened in the past, and I bet that it won't in the future.

[trogers]

Considering Bangkoks miserable traffic problems, proximity to a BTS/mrt station is probably the most important location factor for most condo buyers/investors.

If the price of the unit is reasonable, it will always be a good investment.

Proximity to BTS is most important location factor? Disagree. Compare a condo unit 1 km inside Soi Thonglor (Soi 55) to one behind Lotus Onnut. Which has more value, and which will give better rental yield?

What is reasonable price? New developments are being priced Bt90k/sqm upwards - see Skywalk at Phrakanong.

[Baaadmutha]

Considering Bangkoks miserable traffic problems, proximity to a BTS/mrt station is probably the most important location factor for most condo buyers/investors.

If the price of the unit is reasonable, it will always be a good investment.

Proximity to BTS is most important location factor? Disagree. Compare a condo unit 1 km inside Soi Thonglor (Soi 55) to one behind Lotus Onnut. Which has more value, and which will give better rental yield?

What is reasonable price? New developments are being priced Bt90k/sqm upwards - see Skywalk at Phrakanong.

Comparing apples to apples.....If you hypothetically consider two excatly identical condos, then place one witihin a 5 minute walk to the Thonglor BTS station, and place the other 1km inside Thonglor Soi 55, I would highly suspect that the one nearest to the BTS station would have a very significant price premium vs the other.

Reasonable prices are probably somewhere near where the demand line crosses the suppply line. Since there appears to be such a huge oversupply of units currently for sale, this would suggest that prices are indeed unreasonable.

Edited April 17, 2011 by Baaadmutha

[trogers]

Comparing apples to apples.....If you hypothetically consider two excatly identical condos, then place one witihin a 5 minute walk to the Thonglor BTS station, and place the other 1km inside Thonglor Soi 55, I would highly suspect that the one nearest to the BTS station would have a very significant price premium vs the other.

Wrong again. See this post:

[Baaadmutha]

Comparing apples to apples.....If you hypothetically consider two excatly identical condos, then place one witihin a 5 minute walk to the Thonglor BTS station, and place the other 1km inside Thonglor Soi 55, I would highly suspect that the one nearest to the BTS station would have a very significant price premium vs the other.

Wrong again. See this post:

I fully appreciate the concerns about noise. I've had the same issues here in singapore and in KL when I lived there.

Obviously this is one of the things to consider in terms of the build quality.

However, as mentioned in my previous post, if you compare apples to apples and difference in the street noise reaching the units is not significantly large, most investors will prefer the unit closest to BTS.

[trogers]

Comparing apples to apples.....If you hypothetically consider two excatly identical condos, then place one witihin a 5 minute walk to the Thonglor BTS station, and place the other 1km inside Thonglor Soi 55, I would highly suspect that the one nearest to the BTS station would have a very significant price premium vs the other.

Wrong again. See this post: http://www.thaivisa....75#entry4345775

I fully appreciate the concerns about noise. I've had the same issues here in singapore and in KL when I lived there.

Obviously this is one of the things to consider in terms of the build quality.

However, as mentioned in my previous post, if you compare apples to apples and difference in the street noise reaching the units is not significantly large, most investors will prefer the unit closest to BTS.

I doubt KL and Singapore have motor shops that cater to vehicle owners seeking to modify their exhaust systems to create sounds like in a motorcross or formula one racetrack. Nor do I see buses and trucks on the roads of KL and Singapore spewing thick black exhaust without consequences.

[powderpuff]

The only standard that has any meaning is how many baht per square meter. Once you have your budget you have to look at properties that match.

Maintenance & community property upkeep vary wildly.

Tell me how many baht per sq meter & we'll tell you if it's a good deal or not.

btw. Thai's won't buy second hand condos.

[trogers]

btw. Thai's won't buy second hand condos.

And that is the investment opportunity for long term investors. If you only buy into projects off plan, and planned to keep them for 5 years, the property will still be 2nd hand when it is time to sell

[Baaadmutha]

The only standard that has any meaning is how many baht per square meter. Once you have your budget you have to look at properties that match.

Maintenance & community property upkeep vary wildly.

Tell me how many baht per sq meter & we'll tell you if it's a good deal or not.

btw. Thai's won't buy second hand condos.

Why wont they buy second hand condos? Does that apply to brand new completed resell units that have never been lived in?

Does this also apply to landed homes?

[Baaadmutha]

Comparing apples to apples.....If you hypothetically consider two excatly identical condos, then place one witihin a 5 minute walk to the Thonglor BTS station, and place the other 1km inside Thonglor Soi 55, I would highly suspect that the one nearest to the BTS station would have a very significant price premium vs the other.

Wrong again. See this post: http://www.thaivisa....75#entry4345775

I fully appreciate the concerns about noise. I've had the same issues here in singapore and in KL when I lived there.

Obviously this is one of the things to consider in terms of the build quality.

However, as mentioned in my previous post, if you compare apples to apples and difference in the street noise reaching the units is not significantly large, most investors will prefer the unit closest to BTS.

I doubt KL and Singapore have motor shops that cater to vehicle owners seeking to modify their exhaust systems to create sounds like in a motorcross or formula one racetrack. Nor do I see buses and trucks on the roads of KL and Singapore spewing thick black exhaust without consequences.

Granted...road noise in SG and KL is not as bad as BKK...but it is bad enough if you live near a main arterry.

[MaiChai]

I personally think Sukhumwit has become rather cold and heartless. It has no soul any more. Probably because regular Thais don't live there anymore and it has become a foreigner ghetto. I think it proves the point: buying property in Bangkok is a very risky business. Planning laws seem non existant, and there is no zoning. There are too many things that can go wrong and you never know what is going to happen with the area you live in.

I live in a very nice condo in Huay Kwang. The area around the condo is undeveloped and we wake up to the noise of birds, etc. However I don't expect it to stay that way, and I am sure the views we enjoy at the moment will disappear as more condos are built around us. The price of renting versus buying are hugely out of sync; I see no point in buying when renting is so cheap.

Just my experience. Lived in Bangkok since 2003 and in Thailand since 1995. On day I will move out of Bangkok, simply because I cannot see the city ever becoming a great city to live in. It will just get more crowded/polluted/dirtier/less friendly/more expensive/etc. That is it will get worse.

[trogers]

The price of renting versus buying are hugely out of sync; I see no point in buying when renting is so cheap.

This is the average rental yield for Bangkok: http://www.globalpropertyguide.com/Asia/Thailand/Rental-Yields

If you think these figures are hugely out of sync, try this country: http://www.globalpropertyguide.com/Asia/Singapore/Rental-Yields

[travelmann]

The only standard that has any meaning is how many baht per square meter. Once you have your budget you have to look at properties that match.

Maintenance & community property upkeep vary wildly.

Tell me how many baht per sq meter & we'll tell you if it's a good deal or not.

btw. Thai's won't buy second hand condos.

My wife sells "secondhand" condos all the time to..........................THAIS.

[jolo]

The price of renting versus buying are hugely out of sync; I see no point in buying when renting is so cheap.

This is the average rental yield for Bangkok: http://www.globalpro...d/Rental-Yields

If you think these figures are hugely out of sync, try this country: http://www.globalpro...e/Rental-Yields

That's exactly what I was thinking when I first saw the post "I see no point in buying when renting is so cheap". In my opinion Bangkok rental yields are attractive which means that the price of renting is not that cheap.

However we must also remember the facts that makes Bangkok different from another more mature markets (e.g. Singapore). In Bangkok there can be long void periods when the property is vacant between tenants and that will drop the average net yield significantly.

[trogers]

The price of renting versus buying are hugely out of sync; I see no point in buying when renting is so cheap.

This is the average rental yield for Bangkok: http://www.globalpro...d/Rental-Yields

If you think these figures are hugely out of sync, try this country: http://www.globalpro...e/Rental-Yields

That's exactly what I was thinking when I first saw the post "I see no point in buying when renting is so cheap". In my opinion Bangkok rental yields are attractive which means that the price of renting is not that cheap.

However we must also remember the facts that makes Bangkok different from another more mature markets (e.g. Singapore). In Bangkok there can be long void periods when the property is vacant between tenants and that will drop the average net yield significantly.

Those two reports are almost a year old. My gut feeling is rental yields in Bangkok have probably fell a further 1% across the board, with new stocks coming into the market. Location and the quality of living that the space and its communal area provide will become more important criteria in ease of securing tenants. Rental units poor in both these aspects will face possible long periods of vacancy.