Condos don't appreciate in value

[mike324]

In general pretty much all condos appreciate in value from the presale price

Return on average is 3-4%

Many people don't factor in sinking fee when buying condos for investment

Best condos for investment are two bedroom

Forget about buying a studio or one bed for investment purpose, 3 bed is good if price is low enough.

[wowfactor10]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

[trogers]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

[bazza40]

In Chiang Mai, the going rate for a 30 - 46 sqm is 6500 to 12000 baht/month. There are a few optimists waiting for a falang sucker who want 15,000 baht a month. Going rate for 80-90 sqm is 20,000 - 30,000 baht/month.

[namatjira]

If you had of bought a condo in Thonglor 10 years ago, you would be very happy with today's value, the right location.

Yes you have made a small fortune......so yes, condos do appreciate, production costs go higher and that will never stop, cost of labor and materials keep climbing...........renting is ok short term stays, but if you decide to stay somewhere for 5 years or more best idea is to buy, but do the homework first.

[Anthony5]

If you had of bought a condo in Thonglor 10 years ago, you would be very happy with today's value, the right location.

Yes you have made a small fortune......so yes, condos do appreciate, production costs go higher and that will never stop, cost of labor and materials keep climbing...........renting is ok short term stays, but if you decide to stay somewhere for 5 years or more best idea is to buy, but do the homework first.

If in 1989 you bought a second hand Lancia stratos at the going price, you would get now about 40 times or more the money invested.

If at the same time you bought a BMW M1 you would now also fetch about the same profit.

If instead you bought a BMW Z1, you will now get about half of what you invested.

[CapeCobra]

If you had of bought a condo in Thonglor 10 years ago, you would be very happy with today's value, the right location.

Yes you have made a small fortune......so yes, condos do appreciate, production costs go higher and that will never stop, cost of labor and materials keep climbing...........renting is ok short term stays, but if you decide to stay somewhere for 5 years or more best idea is to buy, but do the homework first.

If in 1989 you bought a second hand Lancia stratos at the going price, you would get now about 40 times or more the money invested.

If at the same time you bought a BMW M1 you would now also fetch about the same profit.

If instead you bought a BMW Z1, you will now get about half of what you invested.

-----

And if your auntie had a knob, she would be your uncle.

-----

[Anthony5]

If you had of bought a condo in Thonglor 10 years ago, you would be very happy with today's value, the right location.

Yes you have made a small fortune......so yes, condos do appreciate, production costs go higher and that will never stop, cost of labor and materials keep climbing...........renting is ok short term stays, but if you decide to stay somewhere for 5 years or more best idea is to buy, but do the homework first.

If in 1989 you bought a second hand Lancia stratos at the going price, you would get now about 40 times or more the money invested.

If at the same time you bought a BMW M1 you would now also fetch about the same profit.

If instead you bought a BMW Z1, you will now get about half of what you invested.

-----

And if your auntie had a knob, she would be your uncle.

-----

I take it that my comparison was too difficult for you to comprehend.

Edited May 25, 2015 by Anthony5

[newnative]

I understand Anthony5's point. In my case, I have no idea what a Lancia Strata even is. Maybe a motorcycle? Haven't googled it so you can see I don't really care what it is. I certainly wouldn't have known to buy one years ago to have it appreciate in value. Never did that well with the stockmarket--though my Dad was a wiz at it. Don't know when to buy and sell gold. Ditto fine art and gems. But, I have had a knack with buying condos and making money on them. It's something I really like and take an interest in and, maybe, that's why I have been a little successful. I think condos can go up in value here but, as several have mentioned, you need to do your homework and buy carefully. If you don't want to do the work, then maybe invest in something else that you interests you more.

[namatjira]

Buy the right model condo, buy the right model car, if you looked at dwellings in most of the world you would come to the conclusion that, yes, they appreciate, if you bought a dwelling in Australia or New Zealand 10 to 20 years ago it

Would be impossible to lose money....in fact the gains have been sensational, Shanghai, Hong Kong, Singapore, London.........and even Thailand, land has increased in value, as it always has and always will, it's an essential commodity......people on this forum tend to think a few million baht is a big amount to pay for a condo, in Australia today you would be lucky to get a caravan for that kind of money and yes, you would have to keep moving.

we all need a roof over our head, and it makes for a better life when we have our own dwelling, let's be honest,

It's a main ambition for much of the world to secure home ownership, always will be.......

But to each his own I suppose. To the renters, keep on renting, property owners need you......

[Anthony5]

I understand Anthony5's point. In my case, I have no idea what a Lancia Strata even is. Maybe a motorcycle? Haven't googled it so you can see I don't really care what it is. I certainly wouldn't have known to buy one years ago to have it appreciate in value. Never did that well with the stockmarket--though my Dad was a wiz at it. Don't know when to buy and sell gold. Ditto fine art and gems. But, I have had a knack with buying condos and making money on them. It's something I really like and take an interest in and, maybe, that's why I have been a little successful. I think condos can go up in value here but, as several have mentioned, you need to do your homework and buy carefully. If you don't want to do the work, then maybe invest in something else that you interests you more.

All 3 cars mentioned are exclusive cars that were produced in a limited number, and all are cataloged as classic cars now, so poised to increase in value over the years.

My point was that even if you buy something that is supposed to increase in value, be it a car or a condo, it will not always happen.

Edited May 25, 2015 by Anthony5

[KittenKong]

......people on this forum tend to think a few million baht is a big amount to pay for a condo, in Australia today you would be lucky to get a caravan for that kind of money .....

How much do building contractors earn in Australia?

How much do they earn in Thailand?

How much empty land is there in desirable locations in Australia?

How much is there in Thailand?

My condo might be worth a few million GBP if it overlooked the Thames. But it actually overlooks the Gulf of Siam and so is only worth a few million Baht.

[WorkingTourist]

Why can't a project hire the management company of their choosing?

They can. But it requires some motivation and effort on the part of the committee and the JPM.

Also many management companies are not very good, so it may not be very easy to find one that is.

We have the same problem in my home country (many companies employ better sales people than hard workers). We changed management company twice, though I think the third time’s the charm.

But despite having had shorter periods with substandard management, no owner saw their condo price go down.

It must be more than bad management that caused the >50% drop in price that Pinot mentions in their Phuket anecdote. On the surface, it sounds absurd unless half the value of the condos were the common areas, that are now rendered unusable because of complete disrepair, which sounds unlikely.

[WorkingTourist]

One thing I never see discussed regarding owning a condo or house verses renting here is age and finances. If someone has a good retirement income they can rent anywhere and has the ability to go if there is something they don't like, life is already too short for older retirees.

How much moving around do you think older retirees want to do? After 3 years renting, I’m pretty tired of scouting for good condos each time I arrived in Thailand and am very happy that I have finally found something to buy. Should there be something I don’t like about my place, apart from loud bars outside my window, then now I have the ability to change it, which seems easier than moving to a new place (and probably finding something to dislike there as well).

[newnative]

I think we can see that there are definitely two camps here--those that think renting is best and those that prefer to own. It really comes down to personal preference. One of the posters said that life is short for older retirees so they should like renting because they can easily move if they don't like a place. I take just the opposite view, however--I value my remaining years and don't want to spend them sleeping on someone else's bed and living in someone else's condo with all their things instead of mine. So, I like owning my own place. But, to each his own. If you are on the fence, there can be advantages to renting if you are here short-term and advantages to owning if you are planning to live here for years. One nice thing about owning here is the monthly maintenance fees are usually very reasonable for most condos compared to western countries so even if you only come part of the year it doesn't cost a lot to maintain a condo while you are out of the country. My annual maintenance fee on one condo I own is less than the monthly fee I paid on a condo I owned in the USA.

[Henryford]

Just to add my view. Condos in the main probably don't increase in value (there are exceptions of course). I bought mine for 3.4 m in 2008 and i would struggle to sell it for that now. But to me that's not important. I bought it to live in, hopefully for 20 years+. The rent i would have paid for a comparable condo over 20 years (with a much lower value Pound) would be far above 3.4 m. Plus i have the benefit and security of owning my own place which maybe i can pass on when i die. Anyone buying a condo now though (at inflated prices and low western currencies) is probably taking a very big risk.

[wowfactor10]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

to be honest for an investment property it should be 50% of what you are asking...I need have ROI within ten years time..

[trogers]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

to be honest for an investment property it should be 50% of what you are asking...I need have ROI within ten years time..

Then the financial market is the place to invest.

My property investment here since 2007 returns only in the range of 12-15% pa.

[rijit]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

to be honest for an investment property it should be 50% of what you are asking...I need have ROI within ten years time..

Then the financial market is the place to invest.

My property investment here since 2007 returns only in the range of 12-15% pa.

thats a good return

[WorkingTourist]

This article looks at land prices in central Bangkok.

A prime site on Sukhumvit Road is said to be 375,000 THB/sqm.

Let’s assume we build 600% sellable square meters on the site and our expenses are 15,000 THB/sqm. for labour and 50,000 THB/sqm. for materials.

Our expenses per sqm. then comes down to 127,500 THB.

What does a new apartment cost in a lowrise building on a prime location on Sukhumvit? I see condos at 300,000 THB/sqm.

If the cost of buying land and developing it increase by 10% each year then it will take 9 years before the fundamental value of our condo has reached 300,000 THB/sqm.

[trogers]

This article looks at land prices in central Bangkok.

A prime site on Sukhumvit Road is said to be 375,000 THB/sqm.

Lets assume we build 600% sellable square meters on the site and our expenses are 15,000 THB/sqm. for labour and 50,000 THB/sqm. for materials.

Our expenses per sqm. then comes down to 127,500 THB.

What does a new apartment cost in a lowrise building on a prime location on Sukhumvit? I see condos at 300,000 THB/sqm.

If the cost of buying land and developing it increase by 10% each year then it will take 9 years before the fundamental value of our condo has reached 300,000 THB/sqm.

Why buy new near the peak of a property cycle? Should the market turn down, add a further 8-10 years to your calculations.

[wowfactor10]

This article looks at land prices in central Bangkok.

A prime site on Sukhumvit Road is said to be 375,000 THB/sqm.

Let’s assume we build 600% sellable square meters on the site and our expenses are 15,000 THB/sqm. for labour and 50,000 THB/sqm. for materials.

Our expenses per sqm. then comes down to 127,500 THB.

What does a new apartment cost in a lowrise building on a prime location on Sukhumvit? I see condos at 300,000 THB/sqm.

If the cost of buying land and developing it increase by 10% each year then it will take 9 years before the fundamental value of our condo has reached 300,000 THB/sqm.

No one will ever buy your low and or high rise condo at 300,000 BHT the sqm ...

Sounds insane...12 M bht for a 40 sqm studio...

[wowfactor10]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

to be honest for an investment property it should be 50% of what you are asking...I need have ROI within ten years time..

Then the financial market is the place to invest.

My property investment here since 2007 returns only in the range of 12-15% pa.

thats a good return

Sorry i do not fully understand u ...

If i like ROI within ten years then it means i be happy to make 10% return of investment on each year...

if you got property investments of 12-15% pa then tell me more about it.

financial market never give these gains unless being prepared to accept simular losses.

[blackcab]

This article looks at land prices in central Bangkok.

A prime site on Sukhumvit Road is said to be 375,000 THB/sqm.

Lets assume we build 600% sellable square meters on the site and our expenses are 15,000 THB/sqm. for labour and 50,000 THB/sqm. for materials.

Our expenses per sqm. then comes down to 127,500 THB.

What does a new apartment cost in a lowrise building on a prime location on Sukhumvit? I see condos at 300,000 THB/sqm.

If the cost of buying land and developing it increase by 10% each year then it will take 9 years before the fundamental value of our condo has reached 300,000 THB/sqm.

With high rise the cost goes way past 15k per square meter. To put it in perspective, very large companies do not normally make over 30% profit when all is said and done on a condo development. Smaller companies make less.

[blackcab]

This article looks at land prices in central Bangkok.

A prime site on Sukhumvit Road is said to be 375,000 THB/sqm.

Lets assume we build 600% sellable square meters on the site and our expenses are 15,000 THB/sqm. for labour and 50,000 THB/sqm. for materials.

Our expenses per sqm. then comes down to 127,500 THB.

What does a new apartment cost in a lowrise building on a prime location on Sukhumvit? I see condos at 300,000 THB/sqm.

If the cost of buying land and developing it increase by 10% each year then it will take 9 years before the fundamental value of our condo has reached 300,000 THB/sqm.

No one will ever buy your low and or high rise condo at 300,000 BHT the sqm ...

Sounds insane...12 M bht for a 40 sqm studio...

39 by Sansiri sold out in presales and was priced at 300k per square meter upwards. But then Sukhumvit 39 is a particularly expensive soi.

Would a second hand condo somewhere less desirable reach that sort of price?

Only in the rarest of cases, in my opinion.

[WorkingTourist]

With high rise the cost goes way past 15k per square meter. To put it in perspective, very large companies do not normally make over 30% profit when all is said and done on a condo development. Smaller companies make less.

I put down 15k for labour and 50k for materials, so 65k total to develop each square meter.

I implied low rise, but perhaps its then more realistic with 300% as sellable square meters.

[blackcab]

With high rise the cost goes way past 15k per square meter. To put it in perspective, very large companies do not normally make over 30% profit when all is said and done on a condo development. Smaller companies make less.

I put down 15k for labour and 50k for materials, so 65k total to develop each square meter.

I implied low rise, but perhaps its then more realistic with 300% as sellable square meters.

Apologies, I misread what you posted.

Roughly speaking however, you will want 40 to 50k per square meter to finish the project after the main concrete structure has been completed.

Edited May 27, 2015 by blackcab

[trogers]

Yes Bangkok from all cities is the worst to invest for condos in Thailand ..

Problem there is too many thais who hardly buy ur resale condo....Thais only buy new condos off plan with payment plan..

then like the guy said its normal to pay 4 M BHT for 40 sqm and fetch 19 K on monthly rent..if ur lucky to rent it out...

Then they just keep building so rental prices only going down

U can forget about the one procent rule in BKK

Why buy a 40 sqm for 4m baht when you can get a 72 sqm for 3.8m baht?

It fetches 20 K monthly is it?

Yes, a 2-bedroom can fetch 20k. Doubt a 1-bedrom can get this in the same locality.

to be honest for an investment property it should be 50% of what you are asking...I need have ROI within ten years time..

Then the financial market is the place to invest.

My property investment here since 2007 returns only in the range of 12-15% pa.

thats a good return

Sorry i do not fully understand u ...

If i like ROI within ten years then it means i be happy to make 10% return of investment on each year...

if you got property investments of 12-15% pa then tell me more about it.

financial market never give these gains unless being prepared to accept simular losses.

I am able to get 12-15% pa return because I bought in 2007. This return is the total of rental yield plus capital gain.

It is not possible to get more than 8% pa if you buy now due to the increase in prices over the past 7-8 years.

Like I have said, buying at the appropriate point in the property cycle is a major part of returns. Similar to prices of stocks and their dividends.

Edited May 27, 2015 by trogers

[bazza40]

Buy the right model condo, buy the right model car, if you looked at dwellings in most of the world you would come to the conclusion that, yes, they appreciate, if you bought a dwelling in Australia or New Zealand 10 to 20 years ago it

Would be impossible to lose money....in fact the gains have been sensational, Shanghai, Hong Kong, Singapore, London.........and even Thailand, land has increased in value, as it always has and always will, it's an essential commodity......people on this forum tend to think a few million baht is a big amount to pay for a condo, in Australia today you would be lucky to get a caravan for that kind of money and yes, you would have to keep moving.

we all need a roof over our head, and it makes for a better life when we have our own dwelling, let's be honest,

It's a main ambition for much of the world to secure home ownership, always will be.......

But to each his own I suppose. To the renters, keep on renting, property owners need you......

And to the owners, keep on owning too. We renters need you to keep paying condo fees, maintenance levies etc. Thank you for the freedom to move when we get noisy neighbours, or when the infrastructure starts falling apart.

[london]

Over the many years I have been a member of Thai Visa, this same discussion has appeared on numerous occasions.

There are the naysayers, those who say never buy a condo or any real estate in Thailand, therefore by their own admission, they don't actually have experience in this market.

There are those who are bullish who have purchased and those who are not so bullish but have experienced property ownership here.

From someone who has owned a number of high end condos here and still does, I echo the earlier question by Suradit69: "Do you really want to buy a condo with price appreciation as an objective?"

If so, stay out of Thailand.

Buying in Thaland is a lifestyle decision. If you can afford it and price appreciation or defaltion is not going to make a difference to your lifestyle eitehr way, then buy.

Simply, by buying, you are shielding yourself from currency fluctuations, you have a place to call home and at the end of the day you may make a profit.