Farang Owned Condos

[bingobongo]

Housing inventories up 10%, leading to oversupply

24 January 2007

The inventories of property companies increased by 10 per cent from 84,058 units in the middle of last year to 92,462 units at year-end due to a sharp drop in housing demand in the final quarter, according to research by property consultant Agency for Real Estate Affairs (AREA).

http://thailand-property-guide.com/?p=news...&NewsID=290

[johnnyk]

real estate stats typically compare month-to-month. sales can be quite different at different times of the year.

more accurate comparison would be end 2005 to end 2006 or middle 2005 to middle 2006 to middle 2007 when it comes.

[bingobongo]

Kitti said the real-estate sector, one of the big advertising spenders over the past three or four years, was reducing their ad budgets this year.

Full artcile: http://nationmultimedia.com/2007/01/30/bus...ss_30025454.php

[Casanundra]

I have bought a Condo in BK off plan that is not due for completion until April 07. Building work is coming along nicely and about 80% of units have been reserved, mainly only the lower floor units and Penthouses remain available

My plan is to sell it at a higher price about 2 months prior to completion. thus avoiding any tax implications.

If I have got it wrong I will take it on the chin and will report back what happened, but I am quite confident I will be OK considering its location, size and what I paid for it

TP

Just out of curiosity, did you buy the Star Estate at Naratiwas near Rama III?

[backflip]

"But what we're all really waiting for now is to see if the whole condo thing collapses"

You read it here first, folks, "the condo thing". Let's not get technical or specific...

[bingobongo]

The average selling price last year also dipped to 2.59 million baht a unit, compared to 3.08 and 3.73 million baht in 2005 and 2004 respectively.

http://thailand-property-guide.com/?p=news...&NewsID=300

[think_too_mut]

"But what we're all really waiting for now is to see if the whole condo thing collapses"

IMO, it won't collapse just like a dead horse.

Retiring baby boomers, keen to finally experience something in their dull lives.

To live in the condos they could only dream of before, at a price unheard in Thailand but much less than cost of a garage in London City or of a parking space in Hong Kong.

Then, once they purchased their units, that's it. Nothing they can do with with them.

IMO, owners of the existing ones, adjust your plans about selling (soon, in 3 years or ever)..even consider how to abandon the brick and mortar you have purchased without getting a stamp in your passport about that.

[thaigene2]

I have bought a Condo in BK off plan that is not due for completion until April 07. Building work is coming along nicely and about 80% of units have been reserved, mainly only the lower floor units and Penthouses remain available

My plan is to sell it at a higher price about 2 months prior to completion. thus avoiding any tax implications.

If I have got it wrong I will take it on the chin and will report back what happened, but I am quite confident I will be OK considering its location, size and what I paid for it

TP

Just out of curiosity, did you buy the Star Estate at Naratiwas near Rama III?

Good luck ThaiPauly. My concern is that when I was really looking around (every weekend for around three months last year), what I noticed was all these Thais snapping up the off-plan units. At first I found that encouraging, but then I began to wonder how many saw this as an investment or as a place to live.

I started asking people..(I can speak Thai - but many of them spoke English anyway), and almost all said they planned to either rent or try to do exactly what you are doing - flip it. I asked "to whom would you flip?" and most said they would aim for farangs or other foreigners (e.g. Japanese).

Given the increasingly tough position on visas here, it seems to me that fewer farangs will be around to buy condos, and that will have a knock-on effect on you and the other Thais out there waiting to flip.

My unanswered question is what happens to those Thais who don;t have the cash to pay the final 85% payment when the building is finished? And more worrysome - how many of them are there out there just waiting to default becuase they couldn't find a second buyer?

[palm]

I am not convinced they are overpriced. I am not that smart to know that, and I don't think anyone else is either. I was shopping in South Florida a while back and thought the condos there were overpriced, and then looked a year later, up another 25 percent.

You are exactly right - take the UK where EIGHT YEARS ago everyone was moaning property prices were way too high and were in for a big fall. The complete opposite has happened. Prices have shot up. Bangkok is a major developing city with enough high quality services available to service a high quality lifestyle.

Most Bangkok condos are still dirt cheap compared to most major cities in Asia. Just look at condo prices in Shanghai now.

I think the people dead against buying in Thailand just can't afford to buy them, or keep their savings tucked into their mattress.

[thaigene2]

I am not convinced they are overpriced. I am not that smart to know that, and I don't think anyone else is either. I was shopping in South Florida a while back and thought the condos there were overpriced, and then looked a year later, up another 25 percent.

You are exactly right - take the UK where EIGHT YEARS ago everyone was moaning property prices were way too high and were in for a big fall. The complete opposite has happened. Prices have shot up. Bangkok is a major developing city with enough high quality services available to service a high quality lifestyle.

Most Bangkok condos are still dirt cheap compared to most major cities in Asia. Just look at condo prices in Shanghai now.

I think the people dead against buying in Thailand just can't afford to buy them, or keep their savings tucked into their mattress.

Yes true Palm - I did ok - and if had held onto my UK property would have done even better. But I don't think you can compare London to Bangkok. As I said above, who is going to rent/buy these places? If foreigners were the target here then there will be fewer of them as buyers/renters given visa rules. And let me guess your response - a growing asian economy means more Thais in a position to buy. Again I doubt it. Western economics don't wash here. Thai (Chinese) families control the business sector here among themselves. There is no rapidly growing movement of lower-to-middle-class Thais happening as in the UK. There is a finite number of Thais here who can buy and more to the point would actually want to LIVE in these places. They think they are buying to flip or rent to farangs - which as we know is a dwindling market.

[SeanBangkok]

What about the farang dominated areas of sukhumwit? ive never been inside those condos, but i imagine they are owned heavily by farang. they are going to be forced to sell - what happens if thai people start the bidding at one-half the condo's true worth?

[SeanBangkok]

I might get some slack for saying this, but it should be said, sometimes I think the Thai property market is being held together by Soi Cowboy, Nana, and Pat Pong. Who are buying all of these condos but middle aged single men? Of course these guys are going to continue coming to bangkok. a coup? what do they care as long as the entertainment districts stay open...

I am not saying that is the only reason anyone lives in Thailand, but that is what I see before my eyes.

Take a look at real estate prices in places where there arent alot of farang. It is farang driving the market imho.

[SeanBangkok]

"Given the increasingly tough position on visas here, it seems to me that fewer farangs will be around to buy condos"

Id think youd be surprised how many farang are completely clueless about thai laws and thai current events. some guy comes here and falls inlove with #35 at hollywood and he is going to buy a condo regardless. why do you think so many farang bought condos with illegal companies in the first place? they didnt care enough then to research their investment. i doubt these visa laws will prevent people from buying. one of the attractions for alot of guys, good or bad, is that they can always pay someone to think for them in thailand, whether it is someone filling out their visa extension or marriage license forms or purchasing a condo in their name.

[adaedone]

This is my take. First off the The new visa laws that are becoming more disheartening by so many farang is because Thai Government is attempting to keep the riff raff out. They want true investment that helps the Thai people and economy. Personally I do not live in Thailand yet because my retirement here in the USA is not for 7 years but when I do my Thai Wife and I will return to our (her farm). near Khon Kaen. I bought a condo right near the Rachetewi BTS stop, about 50 meters away, 55 sq meters on the 23rd floor. I paid 3.7M $B about two years ago. The project has been sold out and both Acute Realty and the AP Thai company said there has been inquiries on this sold old project. Even a Thai woman named Pele who owns a massage shop wanted to buy but she said sold out. and now too expensive. The realty price my unit add about 80K per sq meter or 4.4 M$B and the developer said 85K per sq meter or 4.675 M$B. The people who want to sell are asking way over that 90K per sq meter. I guess their idea is that since Sukumvit and Chit Lom are priced over 100K per sq meter that it is okay to price there new condo too high. The project I am referring to is the New York Style Condos on Petchburi Road right across from the Asia Hotel. My wife want to develop property near her home for rent to factory workers so I put my condo up for sale. So I do not know whether it will sell or not but I have until July 2007 to find a buyer or finish paying for which of course I will, then I will rent as a serviced apartment too business travelers. BKK is a big city and I still think that the condo market has a way to go (UP). For the price of a condo in BKK, you cannot touch any property in the world for that price in cities the same size or 1/2 the size. An old 50 sq meter one bedroom apartment in San Francisco is 250,000. The same apartment in New York or London are a million plus US dollars. Singapore, Hong Kong are at least $500,000. Even here in Detroit, for a 80 sq meter loft start at 150K and go way up from there. And everyone knows what happened in the Miami condo market, sky high. I read an article today about the Pattaya and Phuket property markets, doubled and tripled in the past few years. I think buying a small premium condo in Bangkok for under 100,000 is a gift. And in a few years people will understand that.

[dsfbrit]

This is what I think will happen

The supply side - condo inventory will go up, along with the price in only short term. But ofcourse this is Thailand where people will just keep raising the price no matter what.

The demand side – the number will increase only slightly but not much. Here are some reasons.

People who want a house will continue to do so (thru the wife this time around) because they don’t like the condo living in the first place. Most expats who’re staying in Thailand have a wife and children, all are demanding their own diff. spaces (quiet, relaxing, sleep, entertainment, yard / play area for kids, yard of cats/dogs, parking etc.), in addition many of them just absolutely love gardening and home improvement (western mentaliy?). These expats with children will focus most on the development and well being of their children. Their demand for diversity of spaces, is the foremost reason why they would continue living in a home not a condo, because for them the place has to be large enough to accommodate their growing family and needs. So condo is out for them.

Spot on BKK - its just not the same renting something like this either - out with the painbrush this weekend - lovely!

As for condo prices, the condos in the 49 percent should sell quicker than the others if not at a massively greater price.

The 15000 baht ? that needs to be paid for the annual company balance sheet should force up this differential premium slightly as well.

The thing is though - when someone sees that perfect little condo they really really want - they will just throw logic out of the window and buy it - company or not. Let's face it, those of us who have land via the company route are the real 'villains' - the condo ownership company 'thing' is a long way down the pecking order - well under the radar in my opinion.

[bingobongo]

will be interesting to see the YOY comparisons given this does not inlcude capital controls/bombings/junta and overbuilding

[Khun Bob]

Could anyone tell me if it is possible for me to hold the freehold on a condo unit purchased from a thai bank (reposession) in a predominantly Thai occupied building, within greater bangkok ?

The units I am looking at are below 500K baht.

Thanks in advance...

[teej]

Could anyone tell me if it is possible for me to hold the freehold on a condo unit purchased from a thai bank (reposession) in a predominantly Thai occupied building, within greater bangkok ?

The units I am looking at are below 500K baht.

Thanks in advance...

If the details are as you've mentioned, it should not be a problem.

[Khun Bob]

Could anyone tell me if it is possible for me to hold the freehold on a condo unit purchased from a thai bank (reposession) in a predominantly Thai occupied building, within greater bangkok ?

The units I am looking at are below 500K baht.

Thanks in advance...

If the details are as you've mentioned, it should not be a problem.

teej - thanks for your reply

Could you let me know when i would get problems ?

Also, have you bought a low priced reposessed condo (single room, balcony and toilet) from a Thai bank ?

Cheers

[yoshiwara]

At the moment, I'd guess that there is practically nobody looking at forming a company to buy a place and quite a few that have these companies wanting to sell.

The prices will drop, the laws will get clarified and the market will then roar ahead.

This is the opportunity some have been waiting for.

I really don't get your point.

If a farang owner holds a condo by a company, chances are he is in a condo fully sold out for 49 percent farang, so he could not sell to farangs. Since most of our members here are farang, in what way is this any kind of opportunity for people to buy cheaper condos, EXCEPTING Thai people?

So, back to my question, given this, wouldn't the farang owned condos (not by company) be worth more because they would be the only class of condo a farang can buy now?

Are you saying some farangs would take the chance to take over a company owned condo cheaply on spec hoping they don't get screwed later down the pike?

IMHO the company owned condo can now realistically only be sold to a Thai person. For prime properties that is probably not a big problem. For sub-prime I think they are now stickies. For new developments the demand for condos should be reduced if falang ownership is not guaranteed ie within the 49% umbrella.