First dip seen in Greater Bangkok realty since 1997

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PROPERTY
First dip seen in Greater Bangkok realty since 1997
Somluck Srimalee
The Nation


Pruksa Real Estate Plc's president and CEO Thongma Vijitpongpun

BANGKOK: -- Overall value of the Greater Bangkok property market could see a decline of nearly 2 per cent this year if the political conflict drags on much longer, warns Thongma Vijtipongpun, president and chief executive officer of Pruksa Real Estate.

If he is right, it will be the first such decline since the economic crisis of 1997.

The metro Bangkok property market was worth Bt330 billion last year.

However, while the capital city is hit by the latest round of political chaos, the provincial property market should maintain last year's value of between Bt330 billion and Bt340 billion, Thongma said.

In the metro area, only 30 residential projects totalling 4,438 units worth Bt15.63 billion were launched last month. That was a decline from November of 30 per cent in terms of projects, 73 per cent in terms of units, and 69 per cent in terms of value, according to a survey by the Agency for Real Estate Affairs.

For 2014, AREA forecasts that the value of project launches in Bangkok and its suburbs will drop by 30-40 per cent from last year's Bt385 billion. Thongma said Pruksa's presales last month dropped by 15 per cent from November as the political turmoil escalated.

However, the firm is maintaining its targets this year of presales worth between Bt41 billion and Bt45 billion and revenue of Bt40 billion to Bt42 billion. This performance will be driven by the company's Bt37.83-billion backlog of homes awaiting transfer to customers. Of that figure, Bt20.78 billion worth will be transferred this year, he said.

Pruksa launched 74 residential projects last year, but plans only 40-50 this year worth Bt40 billion to Bt50 billion. Of its 2014 investment budget of Bt20 billion, half will be used to purchase land for next year's developments, and the rest for this year's construction. The investment budget will come from both the company's cash flow and issuance of debentures worth between Bt5 billion and Bt7 billion.

"We have had to reduce our project launches this year, as we cannot estimate what will happen with no sign of the political problems ending," he said.

If there is a political solution, however, the property market could begin recovering as early as next quarter. If not, it could decline by nearly 2 per cent compared with last year, with the only fairly bright spot being upcountry, largely spared the impact of the anti-government movement.

Other property firms also plan fewer launches this year as the political row has directly affected the demand to buy homes in Bangkok and the suburbs for the past two months. Sansiri, which launched 48 projects worth more than Bt50 billion last year, plans only 19 worth Bt33.26 billion this year.

"We revised down our plans for new projects when we saw the slowdown in the economy, along with impacts from the political uncertainty on the market in the first quarter of this year," Sansiri president Srettha Thavisin said. Sena Development will also cut back on new projects and lower its presale and revenue targets, company director Dr Kessara Thanyalakpark said.

She said an earlier plan for at least 10 new projects this year worth Bt7 billion had been reduced to seven launches worth about Bt5 billion. The decision was based not only on the blow to the market from the political crisis but on the expected delay of mega-projects under the government's Bt2-trillion infrastructure programme.


-- The Nation 2014-01-22

[Thai at Heart]

Ouch.......

[ricku]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

Edited January 21, 2014 by ricku

[noitom]

Ouch.......

Long over due Bangkok over inflated real estate. Wait until the government implements a real estate tax to try to gather cash.

[Thai at Heart]

Ouch.......

Long over due Bangkok over inflated real estate. Wait until the government implements a real estate tax to try to gather cash.

All the hot air is being drained from the market. It's actually good for the long run.

[realfunster]

If you read past the headline he actually says 'could' drop 2% this year.

He also says 'could' recover in Q2 2014.

Misleading headline IMHO....just a PR notice for a property developer.

[yourauntbob]

they have been overbuilding condos for years, but now they have an excuse on why the prices are fallng.

[Asiantravel]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

not only that it's actually physically sinking

http://world.time.com/2013/11/15/bangkok-is-literally-sinking-twice-as-fast-as-it-was-before/

Edited January 22, 2014 by Asiantravel

[khunano]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

Ever thought that most of these condos are built for Thai people? Middle class people that live and work in Bangkok and will probably not have much choice to relocate elsewhere, hence buying their own abode makes sense, indeed!

[smutcakes]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

Someones a little bitter they cannot afford a Bangkok Condominium.

[JSixpack]

Ouch.......

Long over due Bangkok over inflated real estate. Wait until the government implements a real estate tax to try to gather cash.

All the hot air is being drained from the market. It's actually good for the long run.

OMG! It's finally HERE: the long-predicted BEGINNING OF THE END!!! This is IT!!!

What a wonderful excuse for our shrewd, all-knowing HATE CONDOS, OVERPRICED CONDOS, CONDO GLUT, and DON'T BUY REAL ESTATE choirs of renters to jump in and sing their songs! YAY! Haven't had a good DOOM thread in a while.

Now if we could just drain the hot air from the forum . . . .

[alex8912]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

I completely disagree. BKK has everything all major large cities in the world have ( minus current political BS) My condo has gone up enough in past 8 years that a 2 percent drop is nothing and I'm here for a long time anyways. Great restaurants, super movie theaters. Amazing sight seeing. the best out door markets. Beautiful hotels every entertainment venue you want or need, people from all over the world, quiet side Sois that are peaceful. Very few soi dogs! Many EDUCATED individuals. If you want 2 rai or more around your house with tennis or pool no problem ( try doing that in London Dublin New York City. or Boston. Some people are just not city people. I meet people who hate Paris and Tokyo too. Probably you. Not me. I don't like suburbs and I could not live in the middle of nowhere for more than a couple days.

[ricku]

Alex, I don't hate cities at all. But to me, Bangkok is a dirty hot stinking mess of metal, concrete, traffic jams, and too darn many shopping centers. There is no beauty and no order. No squares or open public places (except Lumphini Park). Riding a bicykle or rollerskates is "like wishing for death", and pretty much impossible on most places. And you can barely even walk on the side walk, because it is plugged with junk and noodle-carts.

Compare Bangkok to beautiful cities like Rome, Tokyo, Barcelona and San Francisco.. The whole darn place is plain ugly, dirty, cramped and chaotic! Getting from point A to point B is just painful.. Heck, even Hong Kong is better!

I never stay more than a few days.

Edited January 22, 2014 by ricku

[smoochy]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

Shittiest city in the world? You haven't gotten out much I take it. Dhaka. Mumbai. Jakarta. Beijing. To name a few.

[tingtongteesood]

There go the face saving idiots trying to blame the protestors for everything that ever happens, I guess the weather is cold because of them too is it ? The housing market was already heading for a nosedive as they are building too many too fast and there is a large over supply. Laws of supply and demand and all that. Rising supply and declining demand = ......

[Jasun]

Overall value of the Greater Bangkok property market could see a decline of nearly 2 per cent this year

In other words, prices will go up.

[davejones]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

If you don't like it, then just stay away. Sounds more like jealousy because you can't afford to live here.Why else would you be ranting. There are plenty of cities I don't like but I don't join expat forums to rant about them; I just avoid them. Or maybe you're just a troll without a life.

[davejones]

There go the face saving idiots trying to blame the protestors for everything that ever happens, I guess the weather is cold because of them too is it ? The housing market was already heading for a nosedive as they are building too many too fast and there is a large over supply. Laws of supply and demand and all that. Rising supply and declining demand = ......

I don't think it's face saving. Protests like this and a state of emergency are bound to put off some foreign buyers. Might be a good time to buy if things get worse though. You may get some scared and desperate foreign sellers. Might try to pick up a bargain.

[ricku]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

If you don't like it, then just stay away. Sounds more like jealousy because you can't afford to live here.Why else would you be ranting. There are plenty of cities I don't like but I don't join expat forums to rant about them; I just avoid them. Or maybe you're just a troll without a life.

That's hilarious! Yes, I'm so jealous and I don't have a life because I don't like the shithole of SE-Asia. That must be it!

I.m.o, I think you are a bit too emotionally invested in BKK. And perhaps in your overpriced condo as well? Got one? Lucky you, me so jealous!

[GAS]

BKK is not without its problems, and it is not the prettiest big city, but it is still pretty liveable and has much going for it. There is MASSIVE over building

of Condos so we are due for a correction but BKK will not get much cheaper, compare it to HKG or SIN or any other major Asian city, still relatively cheap I think!

[BlackJack]

8 years ago i bought in BKK

in a good area

I think i would be struggling to get what i paid for it

the figures these guys are referring to are the new 300,000 baht plus per SQM properties

once you buy its hard to sell them

just my 2 cents worth

[Jonmarleesco]

Reality in the Bangkok realty market. Way past time, with prices that seem to have long owed more to estate agents' talk than to realistic property values.

[Thai at Heart]

Ouch.......

Long over due Bangkok over inflated real estate. Wait until the government implements a real estate tax to try to gather cash.

All the hot air is being drained from the market. It's actually good for the long run.

OMG! It's finally HERE: the long-predicted BEGINNING OF THE END!!! This is IT!!!

What a wonderful excuse for our shrewd, all-knowing HATE CONDOS, OVERPRICED CONDOS, CONDO GLUT, and DON'T BUY REAL ESTATE choirs of renters to jump in and sing their songs! YAY! Haven't had a good DOOM thread in a while.

Now if we could just drain the hot air from the forum . . . .

Well I moved from up country a while ago and still have my house on the market. Everything has come to a screeching halt up there.

[HerbalEd]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

You forgot to say "In my opinion ...." Also, you should check out cities like Calcutta, Jakarta and Bagdad before declaring BKK the worst city.

Edited January 22, 2014 by HerbalEd

[laocowboy2]

Makes sense. I can't imagine who would want to buy a house or condo in Bangkok now.. I wouldn't want to buy anything there, even if there were no political chaos.

Bangkok is a place for short entertainment trips, and a few nights of clubbing and drinking. Not a place to live if you can avoid it. Shittiest city in the world!

Hardly the 'Shittiest city in the world!'. Try Khartoum or Mogadishu. Or most places in West Africa. And many cities in India let alone Pakistan or Bangladesh.

[rotary]

I remember the "good old days" in 1997 when condos were selling for 25 cents on the dollar if you took into account the discount you could get and the fact the exchange rate went from $1=B25 to $1=>B50 in a few hours. I still have my condo bought at 25 cents on the dollar.

I predict a repeat of this but on a smaller scale. 2% ain't a good start yet

Edited January 22, 2014 by rotary

[focus27]

Those talking up Bangkok are picking some really nasty cities in comparison.

There's a TAT campaign coming up:

Bangkok, The Best Shit City In The World!

btw Bangkok has no culture apart from shopping - my daughter wanted to go to a museum, she's seen them in documentaries... and that's as far as she's going to get in this city. Oh yeah, on topic, I haven't bought a place precisely as it looks difficult to resell as competing with all the sweeteners from another batch of new-builds.

[Phil Water]

Ouch.......

Long over due Bangkok over inflated real estate. Wait until the government implements a real estate tax to try to gather cash.

I agree. This number won't be right until it is a 20% correction. 30% in Condo prices. 15% in home prices.

[kirk0233]

Alex, I don't hate cities at all. But to me, Bangkok is a dirty hot stinking mess of metal, concrete, traffic jams, and too darn many shopping centers. There is no beauty and no order. No squares or open public places (except Lumphini Park). Riding a bicykle or rollerskates is "like wishing for death", and pretty much impossible on most places. And you can barely even walk on the side walk, because it is plugged with junk and noodle-carts.

Compare Bangkok to beautiful cities like Rome, Tokyo, Barcelona and San Francisco.. The whole darn place is plain ugly, dirty, cramped and chaotic! Getting from point A to point B is just painful.. Heck, even Hong Kong is better!

I never stay more than a few days.

Walking on the foot paths is almost impossible in Bangkok if you are taller than 5 feet with all the umbrellas place over noodles or whatever someone wants to sell that day. At six feet tall I am constantly stooping to avoid hitting my head while also looking down to avoid stumbling over a vat of boiling oil or some other crap placed on the walk way. The city really is not pedestrian friendly, but driving about in a car has numerous disadvantages as well.