Will Condo Prices In Bangkok Go Up Or Down?

[mjohnson282]

I would add, I dont currently believe the real estate price correction in Asia will be as pronounced as it is in Anglicised countries, however I could be wrong. Prices could drift lower for decades, as they have in Japan?

It will be interesting to see if the govt maintains the 51/49% ratio as inventories swell. I am guessing not since it basically makes no sense to start.

[trogers]

I would add, I dont currently believe the real estate price correction in Asia will be as pronounced as it is in Anglicised countries, however I could be wrong. Prices could drift lower for decades, as they have in Japan?

It will be interesting to see if the govt maintains the 51/49% ratio as inventories swell. I am guessing not since it basically makes no sense to start.

You have to take into consideration that this rule has been max out. Majority Thai owned is a national security issue that is beyond the power of any government. Thaksin in his height of power also failed to relax foreign ownership of land packaged with his Elite card fiasco.

[quiksilva]

I would add, I dont currently believe the real estate price correction in Asia will be as pronounced as it is in Anglicised countries, however I could be wrong. Prices could drift lower for decades, as they have in Japan?

It will be interesting to see if the govt maintains the 51/49% ratio as inventories swell. I am guessing not since it basically makes no sense to start.

I personally don't think this rule will ever change, we might however see some improvements made to leasehold interests and perhaps even a relaxation of lending restrictions to foreigners, either of which would be much more palatable than outright ownership changes.

[RAZZELL]

I would add, I dont currently believe the real estate price correction in Asia will be as pronounced as it is in Anglicised countries, however I could be wrong. Prices could drift lower for decades, as they have in Japan?

It will be interesting to see if the govt maintains the 51/49% ratio as inventories swell. I am guessing not since it basically makes no sense to start.

I personally don't think this rule will ever change, we might however see some improvements made to leasehold interests and perhaps even a relaxation of lending restrictions to foreigners, either of which would be much more palatable than outright ownership changes.

99 year leases like Singapore?

RAZZ

[quiksilva]

Before we even talk about term of the lease I'd prefer there to be a legislation protecting security of tenure for tenants so that they have a legislative right to renew, even if the lease term does not change, at least there would be clarity on renewal terms, as its stands you have no automatic right to renew when the contract comes to the end of its term.

So something along the same sorts of provisions as seen in the Landlord and Tenant Act 1954 of the UK, which would make leasehold interests more secure and hence potentially even mortgageable.

[Crossy]

It will be interesting to see if the govt maintains the 51/49% ratio as inventories swell. I am guessing not since it basically makes no sense to start.

I personally don't think this rule will ever change, we might however see some improvements made to leasehold interests and perhaps even a relaxation of lending restrictions to foreigners, either of which would be much more palatable than outright ownership changes.

Not totally sure, but didn't this rule get relaxed during the last financial crisis? I seem to remember some farang owners being stuffed when they wanted to sell to non-Thai buyers after the ratio was reinstated

[quiksilva]

Yes that's right it was but only temporarily (5 years) and it wasn't exactly a huge success.

[pkrv]

Yes that's right it was but only temporarily (5 years) and it wasn't exactly a huge success.

A dead thread but an interesting point - Are you saying that the 100% Farang quota was offered (during the down turn) but after 5 years 'ran out' and 'reverted' to Thai quota? (sorry these terms are very racist, they are not meant to be, I am simply trying to get my head around what happened) If so I could see why it became an abject failure. It was not true.

[Crossy]

A dead thread but an interesting point - Are you saying that the 100% Farang quota was offered (during the down turn) but after 5 years 'ran out' and 'reverted' to Thai quota? (sorry these terms are very racist, they are not meant to be, I am simply trying to get my head around what happened) If so I could see why it became an abject failure. It was not true.

I believe that is exactly what happened (now if only I could find the thread). Farang owners who bought into the over 49% units were fine until they tried to sell their units to other non-Thai buyers at which point 'sorry you can't buy, over 49%' reared its ugly head

[trogers]

A dead thread but an interesting point - Are you saying that the 100% Farang quota was offered (during the down turn) but after 5 years 'ran out' and 'reverted' to Thai quota? (sorry these terms are very racist, they are not meant to be, I am simply trying to get my head around what happened) If so I could see why it became an abject failure. It was not true.

I believe that is exactly what happened (now if only I could find the thread). Farang owners who bought into the over 49% units were fine until they tried to sell their units to other non-Thai buyers at which point 'sorry you can't buy, over 49%' reared its ugly head

We just had a owners' EGM in my old condo. The management committee will put up a board to show updated status of % foreign and local ownerships with names of all owners on display. Best to arrest potential problems than to hide them.

[midas]

[

We just had a owners' EGM in my old condo. The management committee will put up a board to show updated status of % foreign and local ownerships with names of all owners on display. Best to arrest potential problems than to hide them.

In 2009 you would expect a government department to have this

computerised like a land registry. It's a joke that you have to do this

to prevent potential problems.

-why do they deliberately keep things murky here?

[trogers]

[

We just had a owners' EGM in my old condo. The management committee will put up a board to show updated status of % foreign and local ownerships with names of all owners on display. Best to arrest potential problems than to hide them.

In 2009 you would expect a government department to have this

computerised like a land registry. It's a joke that you have to do this

to prevent potential problems.

-why do they deliberately keep things murky here?

Government departments may be fully computerised, but no one there wants to take responsibility when SH*T hits the fan. The Land Department still wants a juristic person to issue the certificate declaring % of foreign ownership before allowing any title transfers to foreigners. Thus, owners in our condo believe it is prudent to keep the records up to date. Problem usually forms by units own by companies that can have changes in shareholdings.

[quiksilva]

[

We just had a owners' EGM in my old condo. The management committee will put up a board to show updated status of % foreign and local ownerships with names of all owners on display. Best to arrest potential problems than to hide them.

In 2009 you would expect a government department to have this

computerised like a land registry. It's a joke that you have to do this

to prevent potential problems.

-why do they deliberately keep things murky here?

A completely reasonable expectation, and one I share whole heartedly, but mate T.I.T.

Its not a deliberate attempt to keep the market opaque (although this is the actual result). The land department offices are woefully underfunded. There is no computerised national land registry, although I do dream about it sometimes.... **

Most of these land department offices are stuck in the 1940's. All information is kept in paper files. Not a PC in sight. If Joe Public wants to know recent transaction history for an area you need access o the cadastral map towork out which plot is the one you are interested in, get the lot number and title number etc and then go upstairs and search for the chanode, by hand!

However the officers seem to think they are protecting Fort Knox and the vast majority will simply refuse any requests that sit outside their normal day to day drudgery, the rest will ask for compensation in return for this huge favour...

**Edit to add : there is the REIC but that is not really a land registry system, they are more like a market research team. The other dept which comes close is the treasury departments record of government appraised values, which can not be relied upon for anything save for the calculation of taxes.

Edited May 4, 2009 by quiksilva

[puanddavid]

I'm a bit interested in this thread because our plan is to buy a second home in Thailand to use when we retire. My wife is from Thailand and I'm from the US. I sell real estate as a rep. for builders or developers. I've seen the full range of appreciation in the good times, and felt the sting of depreciation when my condo in Vegas lost over a 100K in equity.

We visited BKK in April, and I was a surprised at how many vacant or abandoned condo towers I saw. Also, it seems like there's a lot for sale. That leads me to believe there is an over supply in the market. I've witnessed this first hand in Las Vegas, which you might call ground zero in the housing downturn. One month people were queing up at 6:00AM to be the first to bid on a condo, and the next month we couldn't give one away. It happened that quickly. I remember sitting back listening to buyers and realtors discussing how much they had made in equity since going under contract, and I heard similar conversations in BKK in April. Not saying the two are connected, but crazy appreciation is a scary prospect.

What I'd like to know is why are there so many abandoned condo towers in BKK? From the Amari Watergate, I could see three rather large ghost towers, and all throughout BKK I'd spot them here and there. I saw this in Las Vegas too, where speculators bought up everything and then cancelled their contracts as more deposits came due. Developers lost their funding, or simply gave up. And then there's the poor folks that listened to their realtors and lenders and went ahead and closed on their "investment" condo, only to turn around and put it back on the market along with everyone else in the building.

So, what is it? Is the BKK real estate market in the throws of a crash, or am I simply reading into it too much?

Edited May 11, 2009 by puanddavid

[trogers]

I'm a bit interested in this thread because our plan is to buy a second home in Thailand to use when we retire. My wife is from Thailand and I'm from the US. I sell real estate as a rep. for builders or developers. I've seen the full range of appreciation in the good times, and felt the sting of depreciation when my condo in Vegas lost over a 100K in equity.

We visited BKK in April, and I was a surprised at how many vacant or abandoned condo towers I saw. Also, it seems like there's a lot for sale. That leads me to believe there is an over supply in the market. I've witnessed this first hand in Las Vegas, which you might call ground zero in the housing downturn. One month people were queing up at 6:00AM to be the first to bid on a condo, and the next month we couldn't give one away. It happened that quickly. I remember sitting back listening to buyers and realtors discussing how much they had made in equity since going under contract, and I heard similar conversations in BKK in April. Not saying the two are connected, but crazy appreciation is a scary prospect.

What I'd like to know is why are there so many abandoned condo towers in BKK? From the Amari Watergate, I could see three rather large ghost towers, and all throughout BKK I'd spot them here and there. I saw this in Las Vegas too, where speculators bought up everything and then cancelled their contracts as more deposits came due. Developers lost their funding, or simply gave up. And then there's the poor folks that listened to their realtors and lenders and went ahead and closed on their "investment" condo, only to turn around and put it back on the market along with everyone else in the building.

So, what is it? Is the BKK real estate market in the throws of a crash, or am I simply reading into it too much?

I think you may have mistaken the 'ghost' towers as completed projects. There are some projects that went ahead with construction even though there are some outstanding issues with EIA requirements (environment impact agency). These issues may still be outstanding on completion of construction and transfer papers for the condo units cannot be processed.

Most transferred 'empty' condo buildings are still 25-30% occupied.

[midas]

I'm a bit interested in this thread because our plan is to buy a second home in Thailand to use when we retire. My wife is from Thailand and I'm from the US. I sell real estate as a rep. for builders or developers. I've seen the full range of appreciation in the good times, and felt the sting of depreciation when my condo in Vegas lost over a 100K in equity.

We visited BKK in April, and I was a surprised at how many vacant or abandoned condo towers I saw. Also, it seems like there's a lot for sale. That leads me to believe there is an over supply in the market. I've witnessed this first hand in Las Vegas, which you might call ground zero in the housing downturn. One month people were queing up at 6:00AM to be the first to bid on a condo, and the next month we couldn't give one away. It happened that quickly. I remember sitting back listening to buyers and realtors discussing how much they had made in equity since going under contract, and I heard similar conversations in BKK in April. Not saying the two are connected, but crazy appreciation is a scary prospect.

What I'd like to know is why are there so many abandoned condo towers in BKK? From the Amari Watergate, I could see three rather large ghost towers, and all throughout BKK I'd spot them here and there. I saw this in Las Vegas too, where speculators bought up everything and then cancelled their contracts as more deposits came due. Developers lost their funding, or simply gave up. And then there's the poor folks that listened to their realtors and lenders and went ahead and closed on their "investment" condo, only to turn around and put it back on the market along with everyone else in the building.

So, what is it? Is the BKK real estate market in the throws of a crash, or am I simply reading into it too much?

I think you may have mistaken the 'ghost' towers as completed projects. There are some projects that went ahead with construction even though there are some outstanding issues with EIA requirements (environment impact agency). These issues may still be outstanding on completion of construction and transfer papers for the condo units cannot be processed.

Most transferred 'empty' condo buildings are still 25-30% occupied.

Because far too many of these buyers never had any intention in the first place to occupy them

or to fit them out as an investment. They paid their deposit on their condominium believing they would

have no problem flicking it on at a higher price ( speculation pure and simple )-but like musical chairs they have been left holding the baby.

In particular today when you look at how many potential renters ( i.e. nowhere near the numbers of past years for a variety of reasons )

there are it's no wonder many of these owners don't know what to do next

Edited May 11, 2009 by midas

[puanddavid]

I think you may have mistaken the 'ghost' towers as completed projects. There are some projects that went ahead with construction even though there are some outstanding issues with EIA requirements (environment impact agency). These issues may still be outstanding on completion of construction and transfer papers for the condo units cannot be processed.

Most transferred 'empty' condo buildings are still 25-30% occupied.

Well, like I had posted initially, I do have experience in this field. I was not mistaking unoccupied completed projects for ghost projects. I'm talking about 40 floor buildings that are skeletons. Exterior shell completed, but no sheating or interior work. Just wind blowing through the vacant floors. You can also tell when a building has been abandoned. There are no workers, entrances are sealed, the unpainted surfaces are faded or blackened with mold, etc.

[trogers]

I think you may have mistaken the 'ghost' towers as completed projects. There are some projects that went ahead with construction even though there are some outstanding issues with EIA requirements (environment impact agency). These issues may still be outstanding on completion of construction and transfer papers for the condo units cannot be processed.

Most transferred 'empty' condo buildings are still 25-30% occupied.

Well, like I had posted initially, I do have experience in this field. I was not mistaking unoccupied completed projects for ghost projects. I'm talking about 40 floor buildings that are skeletons. Exterior shell completed, but no sheating or interior work. Just wind blowing through the vacant floors. You can also tell when a building has been abandoned. There are no workers, entrances are sealed, the unpainted surfaces are faded or blackened with mold, etc.

These are probably failed projects from the Tom Yum Kung crisis of 1997-8, not recent projects of the last 6 years.

Many cannot be taken over without total demolition due to tightening requirements of EIA. Thus bid prices for them are just land value less demolition cost, which may not be enough to offset outstanding debts.

[midas]

I think you may have mistaken the 'ghost' towers as completed projects. There are some projects that went ahead with construction even though there are some outstanding issues with EIA requirements (environment impact agency). These issues may still be outstanding on completion of construction and transfer papers for the condo units cannot be processed.

Most transferred 'empty' condo buildings are still 25-30% occupied.

Well, like I had posted initially, I do have experience in this field. I was not mistaking unoccupied completed projects for ghost projects. I'm talking about 40 floor buildings that are skeletons. Exterior shell completed, but no sheating or interior work. Just wind blowing through the vacant floors. You can also tell when a building has been abandoned. There are no workers, entrances are sealed, the unpainted surfaces are faded or blackened with mold, etc.

It is not that surprising really when you think how many " skeletons " there are around now

because there were also very many during the 1997 Asian Crisis and

even Dr Chakratham Thammasak from the Thai Public Health Ministry said it is even worse this time around ...........

Health ministry prepares for adverse impact on public health

BANGKOK: -- The Public Health Ministry has created a Health Intelligent Unit to monitor the impact the current economic situation will have on the health of the Thai people as well as on the public and private healthcare systems.

This unit will draw up a plan and prepare measures to help people adversely affected by the state of the global economy, such as the poor, the unemployed, the young, elderly and single mothers.

The ministry's deputy permanent secretary, Dr Chakratham Thammasak, said the ministry's surveillance committee will be running the unit and collecting information to estimate the adverse impacts.

The surveillance committee is comprised of the Bureau of Policy and Strategy, Department of Health, Department of Health Services and Support, International Health Policy Programme, Health System Research Institute, National Health Security Office, Health Insurance System Research Office, National Statistical Office and the Social Security Office.

The Bureau of Policy and Strategy's director, Dr Suppakit Sirilak, who is also chairing the surveillance committee, said the unit would be monitoring the impacts on public health until December 2010.

"We will team up with experts and scholars to study any possible health impacts," he said.

Meanwhile, the National Statistical Office will survey the impact the global economic crisis is having on the labour market. The unit will report to the ministry's highlevel officers every three months to come up with policies that help mitigate the problems, he added.

Dr Chakratham said the ministry believes this economic crisis is worse than the one that hit Thailand in 1997.

About one to two million workers will lose their jobs, while those with no health insurance will be most at risk. The number of povertystricken people would increase to one million and the government will end up having to cut its health budget. The ministry said it expects newborns to be malnourished and the number of stressrelated suicides to rise. In addition, he said, more people will also choose to purchase overthecounter drugs instead of going to the hospital.

-- The Nation 2009-02-09

Edited May 13, 2009 by midas

[ding]

The WHO raising the swine flu pandemic to phase 6 hasn't helped any market. Good to know that phase 6 applies to spread, not mortality, however. Still, travellers and retirees alike are giving Thailand a miss. And Thailand seems to be doing all it can to make it harder for foreigners with money to come -and stay.

Also, the recession seems very deep. It seems like the oxygen has been sucked from the whole world's economy. I wonder where it went? Who has it?

I will not invest in a condo in Thailand now.

Even though America wakes up to its whisky throttle reality, it's safer to own in the west unfortunately. I suppose if prices really tanked, it would be worth gambling that laws would remain the same and we could continue to own.

[Gary A]

Six or seven years ago you could buy very nice condo units for 35,000 baht per square meter. Then came the big building boom and the units were selling quickly. As a result prices went crazy. The same type, location and construction methods went from 35,000 to over 100,000 baht per square meter. Construction materials went up but NOT triple. There are still many over priced units on the market that will have to get cheaper or they will not sell. If I were looking for another unit, I would be looking for value for my money. Maintenance schemes also became money pits with obvious corruption from the people who controlled the funds. I can see absolutely no reason for monthly assessments of 35 baht per square meter and up.

[trogers]

Six or seven years ago you could buy very nice condo units for 35,000 baht per square meter. Then came the big building boom and the units were selling quickly. As a result prices went crazy. The same type, location and construction methods went from 35,000 to over 100,000 baht per square meter. Construction materials went up but NOT triple. There are still many over priced units on the market that will have to get cheaper or they will not sell. If I were looking for another unit, I would be looking for value for my money. Maintenance schemes also became money pits with obvious corruption from the people who controlled the funds. I can see absolutely no reason for monthly assessments of 35 baht per square meter and up.

You can still buy those very nice condo units built 6-7 years ago at Bt45k/m2, adjusted for inflation.

Just ignore the new ones selling at Bt100k/m2 or more.

[midas]

The WHO raising the swine flu pandemic to phase 6 hasn't helped any market. Good to know that phase 6 applies to spread, not mortality, however. Still, travellers and retirees alike are giving Thailand a miss. And Thailand seems to be doing all it can to make it harder for foreigners with money to come -and stay.

Also, the recession seems very deep. It seems like the oxygen has been sucked from the whole world's economy. I wonder where it went? Who has it?

I will not invest in a condo in Thailand now.

Even though America wakes up to its whisky throttle reality, it's safer to own in the west unfortunately. I suppose if prices really tanked, it would be worth gambling that laws would remain the same and we could continue to own.

http://gregpytel.blogspot.com/2009/04/larg...in-history.html

[kuma]

What happened to the global economy....

here is a theory - can not vouch for all of it but it is roughly accurate as far as i am concerned - maybe a bit exaggerated, but not much

http://www.rollingstone.com/politics/story..._big_takeover/1

i would hate to be from the US and know you are on the hook for this, as will be your kids and likely theirs...

what a mess

The WHO raising the swine flu pandemic to phase 6 hasn't helped any market. Good to know that phase 6 applies to spread, not mortality, however. Still, travellers and retirees alike are giving Thailand a miss. And Thailand seems to be doing all it can to make it harder for foreigners with money to come -and stay.

Also, the recession seems very deep. It seems like the oxygen has been sucked from the whole world's economy. I wonder where it went? Who has it?

I will not invest in a condo in Thailand now.

Even though America wakes up to its whisky throttle reality, it's safer to own in the west unfortunately. I suppose if prices really tanked, it would be worth gambling that laws would remain the same and we could continue to own.

http://gregpytel.blogspot.com/2009/04/larg...in-history.html

[BEENTHEREDONETHAT]

You think property tax in the west is bad now, wait until they have to make up for these massive give away programs. I'm sure property owners will be high on the list for recovering the $$ the politicians gave to their buddies.

I like the property tax I pay in LOS, zero, zip, nada.

[anon25424354]

I'm looking to buy right now. Think I'll wait a few months.

Hi Vegas, if you need any help in buying or looking around don't hesitate to contact me. Perhaps I can assist.

I used to work with these Thai developers and now do freelance R.E.

I can give you a comparitive lisitings of developers and pros and cons to help you make a decision.

Just send me an email when you're ready.

Cheers!

[moobie]

Apologies as I've only looked a few previous pages to see if anybody had related the following -

Deltas are sinking - guess where is worst hit?

Depending on the actions taken this could alter the market drastically and effectively wipe-out some areas as attractive property sites while increasing the price of others.

[quiksilva]

The question of Bangkok's subsidence has been well known for years, which is why good foundations are so very important. Pilings depths of up to 18m are not unusual here.

This addresses the problem of sinking buildings but not does not address flooding, which I accept is altogether a different matter.

Flood control measures very much depend on the BMA's systems which to their credit this has improved significantly over the last 10 years. There is still the odd sub-soi where water can reach knee depths but at least main roads like Sukhumvit rarely flood today, and when they do water drains away within a relatively short period of time (compared with say 10 years ago).

It is an issue of course, and needs to be addressed, the question is when and how urgent it is, which nobody, not even the boffins who wrote that report can actually tell you, so what to do? How can a buyer accurately factor that into the overall equation?

The answer is simple. They either choose to accept or reject the current pricing, which usually will not take that matter into account.

[trogers]

The question of Bangkok's subsidence has been well known for years, which is why good foundations are so very important. Pilings depths of up to 18m are not unusual here.

This addresses the problem of sinking buildings but not does not address flooding, which I accept is altogether a different matter.

Flood control measures very much depend on the BMA's systems which to their credit this has improved significantly over the last 10 years. There is still the odd sub-soi where water can reach knee depths but at least main roads like Sukhumvit rarely flood today, and when they do water drains away within a relatively short period of time (compared with say 10 years ago).

It is an issue of course, and needs to be addressed, the question is when and how urgent it is, which nobody, not even the boffins who wrote that report can actually tell you, so what to do? How can a buyer accurately factor that into the overall equation?

The answer is simple. They either choose to accept or reject the current pricing, which usually will not take that matter into account.

There are 2 different issues: soil consolidation due to surcharge placed on existing ground, and sinking of river deltas.

It is known that soil in Bangkok consist of soft marine clay in the first 12-15m depth and any surcharge load place on it, be it just a metre high landfill or a building structure will cause soil to consolidate. This is why even blockwall fences need to be sitting on piles.

But the sinking of river deltas mentioned in the article refers to sinking that starts over a hundred metres deep, and not surface soil. Thus, even the tallest building with 60-70m deep piles is sinking with the rest of Bangkok.

[thaijasmine]

The question of Bangkok's subsidence has been well known for years, which is why good foundations are so very important. Pilings depths of up to 18m are not unusual here.

This addresses the problem of sinking buildings but not does not address flooding, which I accept is altogether a different matter.

Flood control measures very much depend on the BMA's systems which to their credit this has improved significantly over the last 10 years. There is still the odd sub-soi where water can reach knee depths but at least main roads like Sukhumvit rarely flood today, and when they do water drains away within a relatively short period of time (compared with say 10 years ago).

It is an issue of course, and needs to be addressed, the question is when and how urgent it is, which nobody, not even the boffins who wrote that report can actually tell you, so what to do? How can a buyer accurately factor that into the overall equation?

The answer is simple. They either choose to accept or reject the current pricing, which usually will not take that matter into account.

There are 2 different issues: soil consolidation due to surcharge placed on existing ground, and sinking of river deltas.

It is known that soil in Bangkok consist of soft marine clay in the first 12-15m depth and any surcharge load place on it, be it just a metre high landfill or a building structure will cause soil to consolidate. This is why even blockwall fences need to be sitting on piles.

But the sinking of river deltas mentioned in the article refers to sinking that starts over a hundred metres deep, and not surface soil. Thus, even the tallest building with 60-70m deep piles is sinking with the rest of Bangkok.

" Bangkok - Bangkok and its surrounding provinces will be underwater within the next 15 to 20 years "

That doesnt give much time to enjoy your investment.........better to rent in BKK and park the

money in real estate in another location ?