Will Condo Prices In Bangkok Go Up Or Down?

[thedude]

Your point taken about occupancy and vacancy; I incorrectly referred to a vacancy of 20% in my condo building. I should have referred to occupancy, which correlates almost exactly with the number of units available for rent. Perhaps more importantly the characteristics of the Thai market are very different from those say in Hong Kong, whereby a benchmark is established for a building/area on a (HKD psf)/baht per sq m basis. Obviously this does not apply here at all, and I estimate that older condos sell at about 50% less psm than newer ones. At least that's what I'm seeing at the moment. Also, the resale market is largely (entirely?) to foreigners, and not to Thais, and this demand is unpredictable, and very small I would imagine. (I'm reacting to a number of comments earlier that there is no resale market here; I think there is, and it's only to foreigners.) I don't know whether there is any effect on surrounding older properties when there is an obvious increase in pricing of new condos in the same area; my earlier comments suggest there is not, or not much. Largely because there is no specific "residential" area. However, if generally the cost of living and general asset values rise in Bangkok, it would be correct to assume that all assets will rise, providing they are halfway decent, and in the case of property, in the right location. I would imagine this takes place over a a fairly long period - of say 5-10 years.

yes you make some good observations about the different characteristics of the thai market. thai people do not generally like to buy second hand homes that have been lived in before. neither do they like to sell existing homes unless they need the money, and prefering to rent for income instead and only selling as a last option. having to sell a property is often considered a loss of face and not something they would openly discuss. people with a little spare cash buy gold, but those with serious liquidity collect property and leave them empty. this sort of cultural quirk results in the sort of patchy real estate market which you observe. although a second hand market exists, it is true that it is small and a large chunk of it consists of foreign buyers.

therefore some buildings that are old command considerably lower rent and resale value even if in the same area. what interests me is the pricing gap between old and new in similar districts. in the past, this gap was not quite so big as to make the tearing down and redevelopment of older blocks viable, but if prices of new supply continue to increase, it is foreseeable that one day we may see the type of en bloc sales and redevelopment commonly seen in more developed cities like hong kong and singapore. while some would argue that those cities are essentially small islands with limited land, compared to bangkok which has a very large and expandable metropolitan area, what has not served bangkok well is the slow moving infrastructure development which has essentially the same effect of locking in the population into the center of the city. whatever the reason, those choosing to live in downtown bangkok should continue to increase in the foreseeable future, thereby driving demand. i don't think we will see the sort of hollowing out commonly seen in many western cities as the middle class move to the suburbs. even when infrastructure improves and suburban centers grow, bangkok city will still remain the commercial and cultural center of the country.

[backflip]

"having to sell a property is often considered a loss of face and not something they would openly discuss"

What about the dozens of posts detailing how Thais snatch up prime condo units, and then sell them at a profit? As those posts wrong? Perhaps the loss of face, as you put it, is made up for a gain of cash.

[thedude]

"having to sell a property is often considered a loss of face and not something they would openly discuss"

What about the dozens of posts detailing how Thais snatch up prime condo units, and then sell them at a profit? As those posts wrong? Perhaps the loss of face, as you put it, is made up for a gain of cash.

i was explaining the main reasons for a lack of a secondary market.

thais who speculate on prime condo units and flip them for a profit (sometimes even before the project is completed) are obviously doing it for a quick gain in cash. it is however more rare to find them buying second hand units and flipping them for profit.

[Noel]

I am in the process of buying a Condo in the Sukhumvit area.

Since I paid my deposit in January, with an expected move in date of April 07 prices have gone up 10,000 Baht a square metre, with no more freebies like air con and fitted kitchens.

A few weeks ago I went to pay my next installment and the manager informed me that the my unit would probably not be ready until June 07. This is when he told me about the price increases.

I pointed out to him that I had a clause in MY contract that stated that if the unit was not completed by April 07 I would be entitled to a complete refund of my deposit (This is a very reputable company)

He said that if I wanted to I could have all my deposit back within a week as he thinks he can sell the unit I am buying for more than he sold it to me for !

As the whole Condominium only has 20% of its units left for sale, out of 200 (mostly low floors) I reckon that I SHOULD in theory make money on it.......when someone Thai offers you an immediate refund you have to be on a winner?

So I will continue to purchase it. Anyway I have until April to invoke the clause, which is pretty watertight.

Are you saying that you 'bought' a condo off plan at a price that was not fixed at the time and could be increased during the construction period?

Please tell us it is not so...

[samtam]

therefore some buildings that are old command considerably lower rent and resale value even if in the same area. what interests me is the pricing gap between old and new in similar districts. in the past, this gap was not quite so big as to make the tearing down and redevelopment of older blocks viable, but if prices of new supply continue to increase, it is foreseeable that one day we may see the type of en bloc sales and redevelopment commonly seen in more developed cities like hong kong and singapore.

When you talk of the tearing down and redevelopment of older blocks, surely this is quite difficult with multiple ownership, or is there some sort of slumlord strategy employed, whereby the facilities are left to run down completely. Have you heard of that here?

[thaihome]

I am in the process of buying a Condo in the Sukhumvit area.

Since I paid my deposit in January, with an expected move in date of April 07 prices have gone up 10,000 Baht a square metre, with no more freebies like air con and fitted kitchens.

A few weeks ago I went to pay my next installment and the manager informed me that the my unit would probably not be ready until June 07. This is when he told me about the price increases.

I pointed out to him that I had a clause in MY contract that stated that if the unit was not completed by April 07 I would be entitled to a complete refund of my deposit (This is a very reputable company)

He said that if I wanted to I could have all my deposit back within a week as he thinks he can sell the unit I am buying for more than he sold it to me for !

As the whole Condominium only has 20% of its units left for sale, out of 200 (mostly low floors) I reckon that I SHOULD in theory make money on it.......when someone Thai offers you an immediate refund you have to be on a winner?

So I will continue to purchase it. Anyway I have until April to invoke the clause, which is pretty watertight.

Are you saying that you 'bought' a condo off plan at a price that was not fixed at the time and could be increased during the construction period?

Please tell us it is not so...

Where in the world did you get that impression?

What the post says is he bought it off plan, with a full refund clause if it is delivered late and the manager offered him a full refund now since prices are already going up and he can sell if for more now.

TH

[ding]

... some buildings that are old command considerably lower rent and resale value even if in the same area. ...

I'm wondering if Thai worries of ghosts and social apearances regarding older units eliminates the 'location location location' rules altogether, or mainly in non-farang areas?

And if so, wouldn't older units retain value/apreciate faster in farang areas?

Edited October 19, 2006 by ding

[Noel]

I am in the process of buying a Condo in the Sukhumvit area.

Since I paid my deposit in January, with an expected move in date of April 07 prices have gone up 10,000 Baht a square metre, with no more freebies like air con and fitted kitchens.

A few weeks ago I went to pay my next installment and the manager informed me that the my unit would probably not be ready until June 07. This is when he told me about the price increases.

I pointed out to him that I had a clause in MY contract that stated that if the unit was not completed by April 07 I would be entitled to a complete refund of my deposit (This is a very reputable company)

He said that if I wanted to I could have all my deposit back within a week as he thinks he can sell the unit I am buying for more than he sold it to me for !

As the whole Condominium only has 20% of its units left for sale, out of 200 (mostly low floors) I reckon that I SHOULD in theory make money on it.......when someone Thai offers you an immediate refund you have to be on a winner?

So I will continue to purchase it. Anyway I have until April to invoke the clause, which is pretty watertight.

Are you saying that you 'bought' a condo off plan at a price that was not fixed at the time and could be increased during the construction period?

Please tell us it is not so...

Where in the world did you get that impression?

What the post says is he bought it off plan, with a full refund clause if it is delivered late and the manager offered him a full refund now since prices are already going up and he can sell if for more now.

TH

He states that the prices have risen by ฿10,000 per sqm and that he was considering invoking a clause in his contract to have his deposit returned because completion may be delayed by two months.

Why on earth would anyone think in such a way if they are already sitting on a tidy profit that they can realize themselves?

All he has to do is sell his on his own behalf, either now or in the future, yet he is considering giving that profit to the manager.

The only logical reason for doing so would be because his contract contains a pre-completion price escalation clause that he is bound by.

[Thai_Help]

This article shows the Condominium Market is still very Strong, recently reported from the Thailand Property Report on October 10th 2006.

With more units being completed, new condominiums bought for investment purposes are now being put up for rent. Though targeting primarily the same group of expats working in Bangkok, the apartment market has yet to experience any significant impact from increased condominium for rent competition, according to the latest study by Jones Lang LaSalle.

“The apartment market in central Bangkok has continued to perform well with the average occupancy rate standing at over 90%, driven by strong demand from expats,” Dan Tantisunthorn, Head of Research at Jones Lang LaSalle.

“An increasing number of expats has continued to sustain healthy performance in the apartment sector despite higher competition with condominiums for rent. However, competition is likely to further intensify as more condominium projects are scheduled for completion over the next few years.”

According to a Jones Lang LaSalle’s study, 2006 will see a total of 34 new condominium projects with over 7,600 units completed in central Bangkok. “While the ratio of owner-occupied units to for-rent units across the market is difficult to estimate, we anticipate 25% of the units completed condominium buildings being offered for rent,” said Tantisunthorn. “However, we do not believe the apartment market will be significantly affected by competition from condominiums due to the distinct natures of the two types of developments,” noted Mr. Dan. “Apartments are purpose built for rent and thus offer features that are tailored to tenant requirements, including specific conceptual and architectural designs, unit sizes, and furnishing as well as tenant management,” he added.

Three developments were completed in the first half of 2006, comprising of a total of 82 units. Two of these, Baan Pipat (28 units) and The Convento Boutique (21 units), are in the CBD, and one, The Pentacles (33 units), is in the Sukhumvit area.

While many projects scheduled for completion in the first half of the year were delayed to the second half, six projects of around 170 units were withdrawn from the market for renovation in order o stay competitive. As a result, the total stock of apartments in Bangkok decreased from 10,980 at the end of 2005 to 10,900 in July, 2006.

By the end of 2H06, 470 additional units are expected to be completed, mostly in the Sukhumvit area, which remains the most sought after location for expatriates. Its accessibility to the new international airport and the anticipated extension of the Mass Rapid Transit System to the eastern part of Bangkok are further boosting the area’s popularity.

Despite strong demand for luxury apartments in the CBD and Sukhumvit areas in the first half of 2006, only around 50 units were taken up. This is manly the result of limited availability of supply in the market. The average occupancy rate for apartments increased from 92.9% at the end of 2005 to 93.8% in July 2006.

Although new supply is expected to rise further during the second half of the year, more apartments are expected to be withdrawn from the stock for renovation, according to Jones Lang LaSalle. Due to the limited supply, rents are likely experience additional increases. Demand for apartments in Bangkok will likely remain strong over the second half of 2006 as the number of expatriates, particularly those from Japan, is expected to continue growing.

The study also noted there will be more pressure on owners of older projects to renovate their units, from not only the new supply of apartments, but also the growing number of service apartments and condominium units for rent.

[think_too_mut]

Has this article been massaged?

"Three developments were completed in the first half of 2006, comprising of a total of 82 units. Two of these, Baan Pipat (28 units) and The Convento Boutique (21 units), are in the CBD, and one, The Pentacles (33 units), is in the Sukhumvit area."

Only where we rent there are 400 brand new units, mid-Sukhumvit, on BTS.

Or the "units" are complexes having hundreds of "units" each?

[think_too_mut]

Just look at this picture.

It's the "Nusassiri Project", supposedly high quality but not questionable high prices. This is the corner of Sukhumvit and Soi 42, Ekkamai.

The builders live like cattle in those sheds at the left. Hundreds of them in one hangar-like room. And they are building 100K baht+ sqm "units", in the pic, to the right.

United Nations will have to consider sending them some humanitarian aid.

[quiksilva]

Has this article been massaged?

"Three developments were completed in the first half of 2006, comprising of a total of 82 units. Two of these, Baan Pipat (28 units) and The Convento Boutique (21 units), are in the CBD, and one, The Pentacles (33 units), is in the Sukhumvit area."

Only where we rent there are 400 brand new units, mid-Sukhumvit, on BTS.

Or the "units" are complexes having hundreds of "units" each?

Baan Pipat is a low rise apartment building that has just 32 apartments (aka Units) for rent.

They are almost fully occupied, which is rather easier feat to achieve with their single brand, large marketing budgets, and a choice of different layouts, prices and unit sizes to offer.

The same is not true for most condo owners and it would be wrong to think that because the apartment market is good the condo rental market must be good too. They are distinctly different.

Letting / selling individual units is difficult and investors must expect long void periods, which ultimately affects your annual yield. A great location will help, but if its not walking distance (<5mins walk) to a BTS station then expect a long wait to find a tenant.

This may mean that the rents in grade A condos will drop when all of these investors realise that they have to offer competitive rates just to attract tenants. Sure that will mean that their short term investment values will also fall but Thais will never sell for a loss, preferring to hold on to it and hope that the market recovers in the long term.

This too is fine might be fine, if the value can be preserved by good property management. Somkid Gardens, for example, has been around for more than 10 years and the values of their units are still climbing today.

But this is an exceptional case, most are lucky to maintain current values let alone increase them, see some of the other threads where old condos are falling into a state of disrepair because your fellow co-owners are too tight to pay the 30 Baht per sqm common area maintenance fee, or cant see the sense of having a sinking fund.

Properties such as Somkid are very rare.

To find properties like that hunt for low-mid rise projects where the majority of residents are co-owners.

Edited December 18, 2006 by quiksilva

[kokothemonkey]

This article shows the Condominium Market is still very Strong, recently reported from the Thailand Property Report on October 10th 2006.

With more units being completed, new condominiums bought for investment purposes are now being put up for rent. Though targeting primarily the same group of expats working in Bangkok, the apartment market has yet to experience any significant impact from increased condominium for rent competition, according to the latest study by Jones Lang LaSalle.

"The apartment market in central Bangkok has continued to perform well with the average occupancy rate standing at over 90%, driven by strong demand from expats," Dan Tantisunthorn, Head of Research at Jones Lang LaSalle.

"An increasing number of expats has continued to sustain healthy performance in the apartment sector despite higher competition with condominiums for rent. However, competition is likely to further intensify as more condominium projects are scheduled for completion over the next few years."

According to a Jones Lang LaSalle's study, 2006 will see a total of 34 new condominium projects with over 7,600 units completed in central Bangkok. "While the ratio of owner-occupied units to for-rent units across the market is difficult to estimate, we anticipate 25% of the units completed condominium buildings being offered for rent," said Tantisunthorn. "However, we do not believe the apartment market will be significantly affected by competition from condominiums due to the distinct natures of the two types of developments," noted Mr. Dan. "Apartments are purpose built for rent and thus offer features that are tailored to tenant requirements, including specific conceptual and architectural designs, unit sizes, and furnishing as well as tenant management," he added.

Three developments were completed in the first half of 2006, comprising of a total of 82 units. Two of these, Baan Pipat (28 units) and The Convento Boutique (21 units), are in the CBD, and one, The Pentacles (33 units), is in the Sukhumvit area.

While many projects scheduled for completion in the first half of the year were delayed to the second half, six projects of around 170 units were withdrawn from the market for renovation in order o stay competitive. As a result, the total stock of apartments in Bangkok decreased from 10,980 at the end of 2005 to 10,900 in July, 2006.

By the end of 2H06, 470 additional units are expected to be completed, mostly in the Sukhumvit area, which remains the most sought after location for expatriates. Its accessibility to the new international airport and the anticipated extension of the Mass Rapid Transit System to the eastern part of Bangkok are further boosting the area's popularity.

Despite strong demand for luxury apartments in the CBD and Sukhumvit areas in the first half of 2006, only around 50 units were taken up. This is manly the result of limited availability of supply in the market. The average occupancy rate for apartments increased from 92.9% at the end of 2005 to 93.8% in July 2006.

Although new supply is expected to rise further during the second half of the year, more apartments are expected to be withdrawn from the stock for renovation, according to Jones Lang LaSalle. Due to the limited supply, rents are likely experience additional increases. Demand for apartments in Bangkok will likely remain strong over the second half of 2006 as the number of expatriates, particularly those from Japan, is expected to continue growing.

The study also noted there will be more pressure on owners of older projects to renovate their units, from not only the new supply of apartments, but also the growing number of service apartments and condominium units for rent.

LOL....that article is 2 months old.....hear is a dose of reality....

GHB warns of oversupply in budget condominiums (Dec 2006)

May soon propose leasehold extensions

KANANA KATHARANGSIPORN

The Government Housing Bank (GHB) has warned of an oversupply in budget condominiums in the next few years as the number of high-rise housing construction permits has more than doubled. GHB president Khan Prachuabmoh said there was a great number of new budget condominium developments this year as homebuyers hoped to secure places near mass transit lines.

''But it has not yet reached a new bubble,'' Mr Khan said. ''Buyers should be more selective and choose a reliable developer.'' (YOU CANT SEE A BUBBLE WHEN YOU ARE STANDING IN THE CENTER OF IT)

According to statistics released yesterday by the Real Estate Information Centre (REIC), the number of high-rise housing construction permits in the Greater Bangkok area totalled 895 buildings in the second quarter of 2006, :signs-wallbash: rising by 162% quarter-on-quarter and 91% year-on-year. :signs-wallbash: (NOTHING LIKE TOO MUCH SUPPLY)

Meanwhile, the total area of high-rise housing construction permitted in the Greater Bangkok area was about 4.93 million square metres, up 133% quarter-on-quarter and 483% year-on-year, said Mr Khan. (FOR THE LOVE OF BUDDHA)

The number of high-rise housing construction permits nationwide totalled 1,045 buildings, up 129% from the first quarter and 28% from the same period of 2005, with a total area of 5.21 million sq m. That's a quarterly increase of 117% and an annual increase of 358%.

As of the third quarter of 2006, the number of newly registered houses in Greater Bangkok totalled 24,276 units, up 16% from the second quarter.

Mr Khan also expressed concern about the construction of too many single houses priced at more than five million baht a unit, as market demand was moving down to lower-priced units.

During the first nine months of the year, there were 60,734 units newly registered in the Greater Bangkok area, a 14% increase from the same period of 2005. Of those, 11,004 units were single houses, a 3% decrease from the previous quarter, followed by townhouse and shophouses with 6,573 units, a 111% quarterly increase.

''The good news for investments next year is a downward trend in oil prices, interest rates and inflation. Politics will be clearer as a draft constitution is expected to finish within next year,'' he said.

At the same time, the depreciation of the US dollar and a strengthening Thai baht will help reduce oil costs. Mr Khan added that interest rates would definitely drop next year.(THIS IS DEFLATIONARY AND NOT INFLATIONARY)

''The real estate industry still has potential and will grow further as the two richest Thais (Anant Asavabhokin and Thongma Vijitpongpun) are in this industry,'' he said.

The GHB plans to talk with the Finance Minister about an extension of the leasehold period for foreign buyers from 30 years to 99 years, as it would increase the value of properties.

However, the rules might be stricter, such as higher taxes to prevent speculation.

Interest rates more than doubled from 2.5% in 2003 to more than 7% this year, prompting the bank to increase monthly payments for those in the Baan Ua-arthorn low-cost housing project from 1,500 baht at the end of September to about 2,400 baht. To help reduce the burden for Baan Ua-arthorn buyers, the GHB would propose a support plan for the bank to continue releasing lower-interest loans.

[taxexile]

why is the above post , dated 19 dec. at 3am from a banned member , coming up as a new post.

[Cyberstar]

why is the above post , dated 19 dec. at 3am from a banned member , coming up as a new post.

Somenone voted in the poll, without making a post.

[obsession]

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Is that your company? If not why post? It is a sales pitch and doesnt neccesarily have any basis in fact. Every real estate business tells you the properties will appreciate in value. You wouldt buy real estate if you thought you would lose money on it.

[jakesideas]

So it's been about 6 months since the first post here asking if the prices will go up or down in 2 years... So we've almost past 1/4 of that time. Let's see where we're at. I think the prices have probably gone up! I don't see anything getting cheaper in Thailand these last 6 months. By what percent? I don't know. Then factor in the exchange rates if you are a foreigner and you have probably made a nice pile of money in real estate in BKK in the last 6 months. So far the votes for real estate going up are correct... but who knows what will happen the next 18 months?

[merlion]

So it's been about 6 months since the first post here asking if the prices will go up or down in 2 years... So we've almost past 1/4 of that time. Let's see where we're at. I think the prices have probably gone up! I don't see anything getting cheaper in Thailand these last 6 months. By what percent? I don't know. Then factor in the exchange rates if you are a foreigner and you have probably made a nice pile of money in real estate in BKK in the last 6 months. So far the votes for real estate going up are correct... but who knows what will happen the next 18 months?

Get rid of the bloody juntas and property prices will go up and up away!

[Gary A]

I read somewhere that a Jomtien View Talay project has shoe box sized condos selling for 1.4 million baht. Those same size units were selling for 400,000 baht three years ago. The only prices I have seen going down are houses owned via the bogus company route.

[quiksilva]

Sales have slowed down dramatically. Prices generally haven't fallen but prices and values are different beasts. I dont think values have increased over the last six months at all, quite the opposite.

Bangkok's THB10m+ condo market is a buyers market right now, especially in new developments.

Look at ads for new developments you will see improved and increased number of promotions available, including discounts (whether advertised or not).

In fact, two weeks ago a friend of mine negotiated a deal from THB91,000 psm to THB73,000 psm for a brand new 200sqm+ unit, in a grade A project near Sathorn!!

Therefore current market values by the RICS's definition may well have fallen, even if prices have not. Further comparable evidence would be required to substantiate this of course.

Market Value

The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Edited February 27, 2007 by quiksilva

[obsession]

I went to see a condo in Bang Na, Bangkok. They have been trying to sell them for 8 years. They are "new" as in never lived in, but obviously not really new. They dropped it to under 900,000baht and threw in furniture and a tv. I think it speaks volumes about the property market. Its all hype and some people are falling for it. Theres hundreds if not a few thousand unsold unita all over Bkk.

An agent told me condos over 10 million arent selling at all.

[backflip]

"I think it speaks volumes about the property market..."

...in Bang Na.

[MaiChai]

Here is my take on it: the property market revolves around Thais and not foreigners. Thailand is fast developing and all the things we have seen happen in more advanced economies will happen here; market forces will kick in. People need places to live and everyone comes to the city for work. Many worry about missing out on the property market and as a long term view, will opt to buy rather than rent. My opinion is that demand will increase for properties of all types, more houses will be wiped and replaced by tower blocks and condos. Here is an example: look at the planning for metro rail networks in Bangkok; this is an indication of how the city is developing and changing. In line with changes, we will see lifestyles change: people cannot afford houses and thus will look for apartments to live in, and maybe have houses outside the city in their home provences where they can go at weekends. City living will become convenience, fill a need and what people can afford. Having a house in the city is probably a pipe dream for most Thais so buy small and have a decent house outside Bangkok.

In terms of appreciation: I think gradual appreciation rather than dramatic doubling of prices, etc.

A minor change I have observed: before Thais rarely renovated old properties. Now I see some old houses being repaired and repainted, and what a difference this makes! I mean the repainted houses look like new!

Another observation: construction costs are now much higher than say 5 years back. This has a dramatic affect on the 'wait till its old and rebuild' mentality that Thais used to have. Better to renovate/repair than rebuild? Or maybe better to buy old and renovate/repaint?

[quiksilva]

You brought up some good points there MaiChai, if you look around there are increasing amounts of older properties being refurbished, the best examples of which are in the office sector, where refurbishments have become almost commmonplace in the Grade B sector so as to resposition them in the market and capitalise on the spread between grade A&B rents.

It would be great to see this repeated to a similar degree in other sectors and I think that with the increasingly difficult to obtain CBD (Sathorn, Silom, Wireless, Ploenchit, Rajadamri, and main Sukhumvit Roads) development sites we will see more of this going forward.

[bingobongo]

anybody who thinks that prices will go up given the coup/bombings/capital controls/lower Thai consumer confidence/overbuilding/oil prices climbing again needs to get out of the sun and stop drinking........

Monday March 12, 2007 REAL ESTATE MARKET OUTLOOK AND NEW DEVELOPMENTS

Supply glut starting to put pressure on prices

NINA SUEBSUKCHAROEN

The central Bangkok property market is facing difficult times as supply outstrips demand that, making people think more carefully before deciding on purchases, says Ian Soo, the managing director of Hamptons property.

While the political situation continues to cast a cloud over the landscape, Mr Soo does not see this to be a huge factor, saying simple market forces are the key issue.

''There is a huge amount of stock on the market at the moment, both in the sale and rental markets, so buyers or tenants do have more choice and ultimately whatever they take, it's going to come down to value for money and pricing,'' he said.

''There are still good deals to be had, make no mistake, but you just have to be more careful where you look for them.''

Hamptons has sold a few good units so far this year but at least half have been sold at below cost, even in good projects.

''I think this is an indication that people who are speculating without any intention to take ownership, and they can't sell at profit, they are basically having to sell at cost or maybe below cost to be able to get out of the transaction.''

Mr Soo said the market had to accept the fact that supply has been increasing, with thousands of new units completed or going to be completed in a year or two.

Developers and buyers, he said, took a different view two years ago when many of the projects now nearing completion were first announced. Pent-up demand at the time seemed strong. ''Now all this stuff is actually coming on the market in one go, and then you suddenly need thousands more tenants, thousands more buyers to take up this demand.''

For this reason, he is convinced that the market direction is either flat or down. ''I don't believe anyone can say it's still going up. If they do, ask them how they justify that comment.''

Obviously prices will come under pressure. An example he cites is a two-bedroom unit at the upscale condo The Lakes, with around 100 to 110 square metres. A year ago the firm could have rented it out for 70,000 baht a month but today the owner can get only 60,000 to 65,000 baht.

In a buyer's market, landlords cannot set rental rates based on what they got last year or the year before but must accept what the market rate really is.

''And it's the same for sales,'' says Mr Soo. ''They can't bear to think they'll get less than before. It's the same with stocks: if you buy a stock for 100 baht, it goes down to 80 and it might fall further. You can't hold on but you want to sell it at over a hundred. So if it goes down to 50, what do you do? People have to be realistic about pricing, basically, if you're a seller or a landlord.''

On the positive side, the current conditions are good for those who have not yet bought a unit to live in. ''There are still some really good deals to be had and some of the units that we have been asked to sell we have sold within a few days _ it never reached the market.''

Mr Soo urges the authorities to consider reintroducing the tax breaks that ended in 2002 to spur the market. The revival of the property transfer fee cut to 0.01% would be a start. ''That's the most obvious way to help things move along better.''

While there are worrying signals that the US housing market is slowing, Mr Soo does not buy into notions of a global real estate slowdown, given the wide variations from country to country and region to region. He notes that a lot of buyers dealing with his company are from England and the UK market is still very strong.

On the other hand, the property market is linked to any market from which people derive income, so the health of stock markets, retailing and consumer confidence and spending all bear watching.

Mr Soo advises those shopping around for a good condominium unit that it's not necessary to wait until the year-end or for interest rates to fall further to get a good deal, because it's not a question of time but more about what is available.

''At the moment I have five to six properties that we are expecting to sell quickly and if those properties match your requirements you shouldn't wait, otherwise you might wait six months and the property might not be on the market.

''It's about what is a good deal at the moment. If there are good deals to be had, then fine. If not, then you can wait longer but don't wait if there's something good on the market.''

On the other hand, sellers should not be swayed by prices advertised in newspapers because often these are not what the advertised properties are sold at.

Mr Soo has noted that a tendency among his clients to seek newer buildings if they are well maintained and have good facilities. However, older buyers who are coming to Thailand to retire do not mind older buildings because they sometimes offer more privacy, being located farther into sois. and units generally are bigger.

http://www.bangkokpost.com/Yourmoney/12Mar2007_money47.php

[thaigene2]

I saw this yesterday too. I think this is the most honest appraisal yet of market conditions by someone who knows what he's talking about - remarkably honest given the company for which he works..!

[thaihome]

The Bangkok housing market is so segmented, in location, size, type and age I think it is impossible to make general statements about prices. Each segment reacts at different times to different supplies and demand. There are many areas and sizes that are still in demand while others are languishing with oversupply and falling prices. Not unexpected in a mega city of some 7-10 million people of vastly different economic class covering a huge area of many square miles.

TH

[glaitong]

Demand for quality living will drive the cost up 5-10% if not more over 2 years.

[pkrv]

Hamptons were not allowed to sell any residences at The Park - I think it ticked (did I mean to say that?) them off.

[bingobongo]

most bagholders (aka homewdebtors....unless you have no mortage) are in the denial stage