Average lifespan of a Thai condominium 30-35 years?

[Senechal]

Last night, a friend who is a real-estate developer here in Thailand told me that the average lifespan of a Thai condominium building is around 30-35years. I was very surprised by this number and I've attempted to Google it without much success.

Can anyone confirm this number? What is the average life-span of a Thai condo? Given Thai construction standards I imagine it's probably pretty low, but could it really be 30-35 years?

I asked him if he was including lots of low-cost Thai condos in that assessment and he winked and said, "your condo might last a bit longer".

Anyone seen a condo go down-hill that fast?

It certainly casts an interesting perspective on resale values if half the lifespan of the condo is "used up" after 15-20 years or so. And it also puts quite a different spin on the 30 year lease if this is true.

And second question: What exactly happens when your condo eventually gets torn down? As a farang, do you even own a percentage of the land it sits on? (Or do you only own a percentage of the building.. which is gone?)

Edited May 21, 2014 by Senechal

[Globalist]

Interesting question!

Perhaps nobody really knows how long these "modern" condos will last, since most of them are less than 15-20 years old and a large fraction less than 10 years old due to recent building booms. My guess is that the value vs time curve generally rises for a few years after completion, and what happens after that depends on location, quality, local supply and, not least, maintainence. After a longer time the value would probably start going down though. The question is of course when this happens.. In general, the value should largely reflect the rental attractiveness at any given time (on a free market).

On the second point, I believe that the freehold owner owns a part of the land in proportion to the owned (ex-) condo. Not 100% sure about this though..

[Senechal]

On the second point, I believe that the freehold owner owns a part of the land in proportion to the owned (ex-) condo. Not 100% sure about this though..

That's what I would think, out there in the rest of the world...

But in Thailand, farangs aren't even allowed to have partial-ownership of land. For example, when you build a house on land, you can own the house and not the land under the house.

Which makes me think that when they remove the house (in this case, the condominium building) you might not own anything at all? So on average, 30-35 years and then you've got nothing? Can that be right?

Anyone living in a building that's 40+ years old that's in great shape?

Anyone lived in a building that got torn down?

Edited May 21, 2014 by Senechal

[trogers]

Bought 2 large condo units in the oldest condo building in Thailand (almost 40 years old by now). That was in 2007. Refurbished and rent them out. Got elected into the resident committee and have been successful in convincing the other owners to upgrade the building.

Replaced the lifts, repainted the building and will be installing fire detection into the units this year. Putting a new suspended ceiling and LED lights for the common areas is earmarked for next year.

The age old wisdom for investing in RE is to buy the oldest in the best location, as long as it is structurally sound.

Sent from my C6802 using Thaivisa Connect Thailand mobile app

[Pib]

Bought 2 large condo units in the oldest condo building in Thailand (almost 40 years old by now). That was in 2007. Refurbished and rent them out. Got elected into the resident committee and have been successful in convincing the other owners to upgrade the building.

Replaced the lifts, repainted the building and will be installing fire detection into the units this year. Putting a new suspended ceiling and LED lights for the common areas is earmarked for next year.

The age old wisdom for investing in RE is to buy the oldest in the best location, as long as it is structurally sound.

Sent from my C6802 using Thaivisa Connect Thailand mobile app

Well, your avatar fits because only Superman could get a Thai to repaint a building.

[davejones23]

Interesting question!

Perhaps nobody really knows how long these "modern" condos will last, since most of them are less than 15-20 years old and a large fraction less than 10 years old due to recent building booms. My guess is that the value vs time curve generally rises for a few years after completion, and what happens after that depends on location, quality, local supply and, not least, maintainence. After a longer time the value would probably start going down though. The question is of course when this happens.. In general, the value should largely reflect the rental attractiveness at any given time (on a free market).

On the second point, I believe that the freehold owner owns a part of the land in proportion to the owned (ex-) condo. Not 100% sure about this though..

You wouldn't own a share of the land, but you'd own he condo. And the value of he condo would be related to the land value if a developer wanted t knock down the building and build a new one. So they'd have to buy all the condos and the condo owners would, I assume, want a fair value based on the land. I don't see how anyone can just take the condo from you. Unless it's really deteriorated an more than worthless. e.g. repairs cost more than current value. In that case you'd prefer to give it away for free. When you say they'll only last 30 years or so, what do you mean? That they'll somehow become structurally unsound? As long as hey are structurally sound there shouldn't be a problem at all. Might gte a bit worn, but depends if owners agree to renovate things. In a good area I assume they would. In a bad area they may not.

[KittenKong]

On the second point, I believe that the freehold owner owns a part of the land in proportion to the owned (ex-) condo. Not 100% sure about this though..

That's what I would think, out there in the rest of the world...

But in Thailand, farangs aren't even allowed to have partial-ownership of land. For example, when you build a house on land, you can own the house and not the land under the house.

Not so. As a farang condo-owner you own a proportion of the company (up to 49%) that (in theory) owns the land on which the condo is built. So you do own both your condo and your share of the land (up to 49%), always assuming that the condo building actually owns the land on which it is built.

Not the same situation for houses at all.

[thamteak]

The ones from 1997 are still standing strong and they weren't even finished.

[Senechal]

As a farang condo-owner you own a proportion of the company (up to 49%) that (in theory) owns the land on which the condo is built. So you do own both your condo and your share of the land (up to 49%), always assuming that the condo building actually owns the land on which it is built.

Not the same situation for houses at all.

So there *is* a way to own land!

[trogers]

As a farang condo-owner you own a proportion of the company (up to 49%) that (in theory) owns the land on which the condo is built. So you do own both your condo and your share of the land (up to 49%), always assuming that the condo building actually owns the land on which it is built.

Not the same situation for houses at all.

So there *is* a way to own land!

Yes, the genuine 49% way without the use of nominees.

[Thai Travel Bug]

When Pyrmont Sydney was built up from a derelict port area, and turned into an upmarket desirable section of Sydney, there was much talk about the lifespan of the condo's being built

there as well. Many were touting the 30 to 35 year life span as well. If a condominium is well maintained, there is no reason to put a life span on them. Essentially they are all concrete,

bricks and motor, and the only thing that may be effected, especially in the seaside area's is the rebar that may rust, a common cause of concrete cancer. If this happens, and is caught

and fixed, then maintained, there really is no reason for fearing a short term lifespan. If invested in the right area, and if it did collapse, the 49% company owned land is correct, and the

monies would be paid to the residents by a future developer. A large seaside plot in Wongamat for instance. What would that be worth in 30 - 35 years. Quite an outrages' amount one

would only guess.

[cooked]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

http://www.forbes.com/sites/jessecolombo/2013/11/04/thailands-bubble-economy-is-heading-for-a-1997-style-crash/

link added

Edited May 22, 2014 by cooked

[AyG]

As a farang condo-owner you own a proportion of the company (up to 49%) that (in theory) owns the land on which the condo is built. So you do own both your condo and your share of the land (up to 49%), always assuming that the condo building actually owns the land on which it is built.

Not the same situation for houses at all.

So there *is* a way to own land!

It's no different from owning shares in a Thai property company. It's the company that owns the land, not you. You just own a share of the company.

[trogers]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

I love bubbles. They create opportunities to buy low and sell high... and usually buying from those who bought high in hope that prices will be even higher...

[bkkrun]

Trogers, what is your occupancy rate?

[worgeordie]

The life of anything (even the human body) will depend

on how well it is maintained and looked after,and it will

also depend one how well it was built in the first place,

i think the older condos were built a lot better than what

they are throwing up today.

regards Worgeordie

[TM77]

Bought 2 large condo units in the oldest condo building in Thailand (almost 40 years old by now). That was in 2007. Refurbished and rent them out. Got elected into the resident committee and have been successful in convincing the other owners to upgrade the building.

Replaced the lifts, repainted the building and will be installing fire detection into the units this year. Putting a new suspended ceiling and LED lights for the common areas is earmarked for next year.

The age old wisdom for investing in RE is to buy the oldest in the best location, as long as it is structurally sound.

Sent from my C6802 using Thaivisa Connect Thailand mobile app

Well, your avatar fits because only Superman could get a Thai to repaint a building.

Where i live they are painting all the time to cover (repair) the cracks in the wall and humidity running down the walls.

[Rupert2]

I could be some of the older ones were built better - german help ? I"m not sure.

[trogers]

Trogers, what is your occupancy rate?

Both units have been rented out to Japanese tenants who stayed for at least 2 years. Units vacant for a month for repainting between tenants. The 2-bedroom unit has lease just extended for the third year.

Sent from my C6802 using Thaivisa Connect Thailand mobile app

[MMarlow]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

"...and ragamuffin thais are driving brand new 4x4's."

As do many 'ragamuffin' Americans, as you so nicely put it.

[noodle]

One issue with older condo/apartments is undersized waste pipes buried in concrete.

[noodle]

One issue with older condo/apartments is undersized waste pipes buried in concrete.

[Senechal]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

"...and ragamuffin thais are driving brand new 4x4's."

As do many 'ragamuffin' Americans, as you so nicely put it.

This is very true. There's no shortage of credit abuse in the West.

I have been a real estate investor (and watcher) for a very long time. And I've seen markets rise and fall. I've watched all kinds of bubbles, and every time there are the same justifications, explanations ... and flippers. Some will make a lot of money. Most will lose their shirts shortly after the music stops. (And it has already stopped, btw)

When a shoebox size 29sqm "room" in a hastily constructed Isaan condominium costs more than a nice 3 bedroom house with a big backyard in an American suburb with good public schools (where you can actually OWN land regardless of nationality), you know something is rather hilariously wrong.

At the end of the day, value is value. And there's not much meat on the bone in Thailand IMHO.

[Senechal]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

"...and ragamuffin thais are driving brand new 4x4's."

As do many 'ragamuffin' Americans, as you so nicely put it.

This is very true. There's no shortage of credit abuse in the West.

I have been a real estate investor (and watcher) for a very long time. And I've seen markets rise and fall. I've watched all kinds of bubbles, and every time there are the same justifications, explanations ... and flippers. Some will make a lot of money. Most will lose their shirts shortly after the music stops. (And it has already stopped, btw)

When a shoebox size 29sqm "room" in a hastily constructed Isaan condominium costs more than a nice 3 bedroom house with a big backyard in an American suburb with good public schools (where you can actually OWN land regardless of nationality), you know something is rather hilariously wrong.

At the end of the day, value is value. And there's not much meat on the bone in Thailand IMHO.

[davejones23]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

I sense a little jealousy - a ragamuffin Thai can afford a 4x4, but you can't. But you deserve one and they don't. So funny. They know how to make money and you don't. Most people run away if they hear of a bubble forming, while a few making a killing. Then the ones that didn't buy get all jealous when they see others making money.

[Senechal]

Many Thais buy condos and rent them out, selling out after 10 years for a big profit. These days may well be coming to an end, a burst of the bubble has been forecast by several finance gurus.

Da#n right...you know you are in a bubble when a piece of land in Nakhon Nowhere is as expensive as a similar piece in L.A...

...and ragamuffin thais are driving brand new 4x4's.

I sense a little jealousy - a ragamuffin Thai can afford a 4x4, but you can't. But you deserve one and they don't. So funny. They know how to make money and you don't. Most people run away if they hear of a bubble forming, while a few making a killing. Then the ones that didn't buy get all jealous when they see others making money.

They can "afford" a 4x4??? Uh.. welcome to Thailand. They were giving out "no money down" 4x4's to anyone who could fog a mirror a short while back. It had absolutely nothing to do with "affording" anything.