Jomtien condos:floodings ahead?

[mike111]

Jomtien 2nd road seems to be dotted with new condo projects. My guess is that about 3k-4k units are being built. Is there really such a big demand or will the market be flooded and these projects will become ghost residences?

Cheers

[KittenKong]

There are a lot more than 4k units in the pipeline in Pattaya. Multiply it by 10 and then you can probably add some more as well. Most are in or around Pratumnak/Jomtien/NaJomtien.

Many of these units that have been sold off-plan have been bought by people who either hope to "flip" them on to other buyers before completion, or who intend renting them out once completed. Given that many existing units that are for sale or rent cant find takers, it does make one wonder what is going to happen when several tens of thousands more come online.

[jack1964]

The Jomtien area is in a situation where oversupply will create major problems for anyone who thinks they can flip a condo for a profit. With 1000 to 1500 condo's per site in various developments, priced at under or just on one million baht, if you buy in that area, you will be buying to own, and use as your own holiday or retirement property. Resale will be near impossible unless you are prepared to take a loss of 25 to 30% in the near future. It is not an area to now invest in, once you buy it, you will own it for a long time. And who will you rent it to? With so many on the market to rent at 10 to 12,000 baht per month, you will have to lower your price to 7500 to 8000 baht to get someone to come and have a look.

The first of the mega developments in Jomtien started back in 2008, and were marketed at I,000,000 baht. In 2013, new developments in that area are still marketing at 1,000,000 baht. So what does that make the one built in 2008 worth? It is unsaleable, unless you are prepared to take a loss of 30 to 40%. If one is buying to flip, or rent out, you have to choose a good area, in a development with 100 to 150 units on the site, or buy into a high-rise development of which many are coming on board, with unobstructed sea views, and resort facilities. And you need to choose the right area.

Wongamat is currently going through a transformation, and there are still some value buys in the area, but they wont last forever. It is an area that the Thai and Farang population like, and yes, it is at a premium price, but resale and rental should be attractive. I would not be prepared to buy into the 1,000,000 baht shoebox brigade unless I was prepared to have it sit empty, and be used soley by myself or friends for the next 15 years. And what will those buildings be like in 15 years, and how will they stand the test of time? Well, that's anyone's guess.

[charlesfrith]

Surely inexpensive property is a good thing if one is seeking a home and a bad thing if chasing money?

[PattayaPhom]

The Jomtien area is in a situation where oversupply will create major problems for anyone who thinks they can flip a condo for a profit. With 1000 to 1500 condo's per site in various developments, priced at under or just on one million baht, if you buy in that area, you will be buying to own, and use as your own holiday or retirement property. Resale will be near impossible unless you are prepared to take a loss of 25 to 30% in the near future. It is not an area to now invest in, once you buy it, you will own it for a long time. And who will you rent it to? With so many on the market to rent at 10 to 12,000 baht per month, you will have to lower your price to 7500 to 8000 baht to get someone to come and have a look.

The first of the mega developments in Jomtien started back in 2008, and were marketed at I,000,000 baht. In 2013, new developments in that area are still marketing at 1,000,000 baht. So what does that make the one built in 2008 worth? It is unsaleable, unless you are prepared to take a loss of 30 to 40%. If one is buying to flip, or rent out, you have to choose a good area, in a development with 100 to 150 units on the site, or buy into a high-rise development of which many are coming on board, with unobstructed sea views, and resort facilities. And you need to choose the right area.

Wongamat is currently going through a transformation, and there are still some value buys in the area, but they wont last forever. It is an area that the Thai and Farang population like, and yes, it is at a premium price, but resale and rental should be attractive. I would not be prepared to buy into the 1,000,000 baht shoebox brigade unless I was prepared to have it sit empty, and be used soley by myself or friends for the next 15 years. And what will those buildings be like in 15 years, and how will they stand the test of time? Well, that's anyone's guess.

The ones in 2008 at 1Mil were 32 sqm or there abouts, 2013 you only get 26 sqm or there abouts. No 40% loss. Talk to those buyers of VT 1/2 and see what their opinion is. No capitol loss, in fact a capitol gain and almost consistently having a rent paying tenant.

[Suradit69]

Remember the Ocean One project for which a hole in the ground was supposedly dug to kick off the whole deal about 7 or 8 years ago ... and not much more ever happened?

Ocean One is a skyscraper proposed for construction at Jomtien Beach, close to Pattaya, Thailand. The planned structure will be 367 metres (1,204 ft) tall, with 91 floors and 587 rooms. The proposed building site is 250 metres from one of Asia's most popular beaches. When completed, Ocean One will be the tallest building in Thailand. It is planned mainly for residential use, but will also have a conference centre. Using the traditional (Thai ไร่) unit of area, the rai, the area of the property is 12 rai.,^[1] and is equivalent to 19,200 square metres (207,000 sq ft).

The architects are Woods Bagot, who designed Q1 on Australia's Gold Coast which used to be the tallest residential building in the world. Construction has not yet begun, but is expected to take approximately four years from commencement to completion. There are important wind engineering and earthquake engineering problems that must be addressed by structural engineers (current contractor is Connell Wagner) prior to proceeding with construction. The construction contract is planned to be awarded to K-TECH.^[1]

The building is planned to include the latest in luxury and technology with a special focus on environmental aspects. Other features are the high security, a 24-hour medical clinic and 13 high speed lifts with a maximum waiting time of just 18 seconds. The entire 9th floor will be devoted to recreation with swimming pools, saunas, spas, gymnasiums and a running track. The building will have a two-level shopping plaza at the rear.^[1]

And the joke lives on:

Ocean 1 is alive!

It’s about three years since the project to build Thailand’s tallest residential building, the 91 floor Ocean 1, was announced. Since the announcement, nothing much has happened and most people, including myself, assumed that the project was dead. Indeed, I was rather rude about the development more than a year ago, and it looks like I owe Bruno ###### and his team an apology. Because construction is about to commence!!

We know this, because someone has published a mail from Rob Astbury, the sales manager, where he said (in December 2009) “Last week we signed a contract with one of the largest construction companies in China and it is planned for construction to start in February 2010. It is anticipated the building will be compete in four years.” Excellent news indeed!

http://www.pattayadays.com/2010/03/ocean-1-is-alive/

Edited September 10, 2013 by Suradit69

[KittenKong]

Remember the Ocean One project ...

Whenever I feel the need for a reality check I glance out of my window at the hole that one day will be Ocean One.

[Rupert2]

The Jomtien area is in a situation where oversupply will create major problems for anyone who thinks they can flip a condo for a profit. With 1000 to 1500 condo's per site in various developments, priced at under or just on one million baht, if you buy in that area, you will be buying to own, and use as your own holiday or retirement property. Resale will be near impossible unless you are prepared to take a loss of 25 to 30% in the near future. It is not an area to now invest in, once you buy it, you will own it for a long time. And who will you rent it to? With so many on the market to rent at 10 to 12,000 baht per month, you will have to lower your price to 7500 to 8000 baht to get someone to come and have a look.

The first of the mega developments in Jomtien started back in 2008, and were marketed at I,000,000 baht. In 2013, new developments in that area are still marketing at 1,000,000 baht. So what does that make the one built in 2008 worth? It is unsaleable, unless you are prepared to take a loss of 30 to 40%. If one is buying to flip, or rent out, you have to choose a good area, in a development with 100 to 150 units on the site, or buy into a high-rise development of which many are coming on board, with unobstructed sea views, and resort facilities. And you need to choose the right area.

Wongamat is currently going through a transformation, and there are still some value buys in the area, but they wont last forever. It is an area that the Thai and Farang population like, and yes, it is at a premium price, but resale and rental should be attractive. I would not be prepared to buy into the 1,000,000 baht shoebox brigade unless I was prepared to have it sit empty, and be used soley by myself or friends for the next 15 years. And what will those buildings be like in 15 years, and how will they stand the test of time? Well, that's anyone's guess.

The ones in 2008 at 1Mil were 32 sqm or there abouts, 2013 you only get 26 sqm or there abouts. No 40% loss. Talk to those buyers of VT 1/2 and see what their opinion is. No capitol loss, in fact a capitol gain and almost consistently having a rent paying tenant.

I bought at VT1 in 2006 - not for investment. Pretty easy to rent out long term when I'm not there. It's worth a little more than I paid maybe. Not going to sell anyway. It's just really affordable and pretty comfortable place on a budget.

[TommyUK1960]

Most of these units being built are to small starting from 25sqm going to 36sqm average.

The problem is that most people will be looking for long term rentals and these sizes are to small for that.

The investor in for a quick turn around will get burnt as in the next two years I have estimated along the Jomtien second road/ Thapharaya Rd there must be nearly 10,000 small dinky units to be sold.

So it does look like saturation point will be reached in the condo market.

[vtjforyou]

Older buildings as VT 1 or VT 2 are safer...

[wpcoe]

Safer, how? Safer from value fluctuation? Safer from criminal activity? Safer from construction flaws/deficiencies? All of the above? None of the above?

[OnMyWay2]

Where are these 1million bhat condos in Jomtien? I went looking the other day, The Gallery on soin8 wants 2.5m for a 40sqm shoebox.

might explain why the entire place looked empty with a for rent/sale sign on just about every window.

Edited September 15, 2013 by OnMyWay2

[KittenKong]

Where are these 1million bhat condos in Jomtien?

Many of the new multi-building developments around 2nd Road/Watboon etc seem to be advertising units "from" 999,000B. I think that if you buy a unit on the ground floor with no view and in Thai name you can indeed get this price. I was at a sales promotion the other day where they had several units reduced from 1.3M to 1M.

More interesting was the quarterly property auction yesterday. That's where you see the real prices that real people are prepared to actually pay. "This was previously advertised at 24M Baht. Those days are gone." said the auctioneer as he asked for a bid at 14MB for a house.

Condos did a bit better (in that they got some bids near the reserve) but even so it wasn't exactly vibrant. If I was a "flipper" I would be thinking of changing my underwear about now.

[OnMyWay2]

It's a good time to be a buyer. Thailand is in a recession, massive property overbuilding plus the bhat is expected to fall. If your buying now definitely consider this before paying full price for anything,

[topt]

Where are these 1million bhat condos in Jomtien?

Many of the new multi-building developments around 2nd Road/Watboon etc seem to be advertising units "from" 999,000B. I think that if you buy a unit on the ground floor with no view and in Thai name you can indeed get this price. I was at a sales promotion the other day where they had several units reduced from 1.3M to 1M.

More interesting was the quarterly property auction yesterday. That's where you see the real prices that real people are prepared to actually pay. "This was previously advertised at 24M Baht. Those days are gone." said the auctioneer as he asked for a bid at 14MB for a house.

Condos did a bit better (in that they got some bids near the reserve) but even so it wasn't exactly vibrant. If I was a "flipper" I would be thinking of changing my underwear about now.

KK can you say where these ("quarterly property auction") are held and how you get notice of them?

Thanks

[KittenKong]

Collingbourne auction house did it. Widely advertised on local radio and in the local press.

[OnMyWay2]

I guess I always assumes that the flippers were farangs. Now Im learning that many of them are Thai people even real estate agents buying up the foreign quota and trying to flip them for a profit.