Supply of Condo units exceeding Effective Demand?

[trogers]

Now could be the best time to buy residences in Thailand as a number of condo units possible come up for resale because owners may face a cash shortage if commercial banks reject their mortgage applications, Prasert Taedullayasatit, president of the Thai Condominium Association, told media.

http://www.ddproperty.com/th/%E0%B8%82%E0%B9%88%E0%B8%B2%E0%B8%A7%E0%B8%AD%E0%B8%AA%E0%B8%B1%E0%B8%87%E0%B8%AB%E0%B8%B2%E0%B8%A3%E0%B8%B4%E0%B8%A1%E0%B8%97%E0%B8%A3%E0%B8%B1%E0%B8%9E%E0%B8%A2%E0%B9%8C-%E0%B8%9A%E0%B8%97%E0%B8%84%E0%B8%A7%E0%B8%B2%E0%B8%A1/2015/9/108899/time-to-buy-in-thailand/?utm_source=pgth-newsalert&utm_medium=edm&utm_campaign=dailynews-29Sep2015&utm_content=links

[dennis123]

Seems like there's always a demand for new build condos, so the older ones will become deserted at some point.

From an investment point of view it seems like the worst investment ever, so I wait with buying till I decide if I stay here, whenever that is, could be 1, 5 or 10 years from now that I say I go find my luck elsewhere lol.

Oh kind of offtopic to your post, well if someone wants to sell for 50% off I will force myself to keep living here for a while.

[KittenKong]

For people who earn their living from selling condos now is always the best time to buy.

[MadMac]

Worst time to buy. Oversupply of units is one thing, manageability another. There are simply not enough people (management, security, gardener, cleaner etc.) to keep that massive oversupply at float.

If you want to buy one, get an older, bigger condo >10 years old with proven management. Avoid the 3....5 years, these are going down. Seen a couple of places. Not worth the time.

Edited September 29, 2015 by MadMac

[KittenKong]

Worst time to buy. Oversupply of units is one thing, manageability another. There are simply not enough people (management, security, gardener, cleaner etc.) to keep that massive oversupply at float.

I cant agree with that. There's no shortage of people looking for work, and over-employment here is massive (5 people to change a light-bulb etc). We have enough staff to run two condo buildings the same size as ours is.

[trogers]

I have seen the advertisement of The Bloom at Prakhanong offering up to 50% discount for unsold units...

[stoli]

Wow. Posting an article from a Real Estate company website stating now is the time for you to buy a condo. This is not a news story, but an ad.

[BKKdreaming]

I would love to buy a used condo near the BTS - MRT for 50% off ,

as long as those numbers worked out to less than renting the same condo ,

The problem is that the rules can change tomorrow and you might not get a Visa ,

but a 10-20% discount is not worth the trouble , and risk

Its always time to buy Condos, or Gold or ?????? at least the salesman will tell you that

[BKKdreaming]

Plus many people do not want to buy "Pre Owned" so there will always be a demand for new condos etc

Edited September 29, 2015 by BKKdreaming

[i claudius]

Yes there are far to many condos, but and its a big but , some really do hold their price very well , recently the wife has sold three , all in blocks that are highly sort after , the ones that go cheap are the ones no one wants , as always you know it i know it ,location ,location ,location .

[WorkingTourist]

I have seen the advertisement of The Bloom at Prakhanong offering up to 50% discount for unsold units...

What would the price be (after this discount)?

The prices I see for The Bloom are in the 85-117k baht/sqm. range.

So I am thinking the 50% discount might be based on some inflated price that no-one ever paid, but those who bought off plan, were told, that this would be the final price once the construction had completed.

For the records, I am looking for a bargain in Bangkok (30-50 sqm. decent build near a BTS).

[trogers]

I have seen the advertisement of The Bloom at Prakhanong offering up to 50% discount for unsold units...

What would the price be (after this discount)?

The prices I see for The Bloom are in the 85-117k baht/sqm. range.

So I am thinking the 50% discount might be based on some inflated price that no-one ever paid, but those who bought off plan, were told, that this would be the final price once the construction had completed.

For the records, I am looking for a bargain in Bangkok (30-50 sqm. decent build near a BTS).

Don't know the details, only the big billboard above the shop house before crossing the bridge towards Onnut.

Could well be 50% off for the badly located units on the lower floors facing the rear of shop houses?

[hhgz]

"What would the price be (after this discount)?"

Here's a hint: go to the sales office and ask. If you cant calculate 50% of 80,000 - you should have stayed in your home country.

[AlexRRR]

To many armchair experts.....gibberish talk on over supply in just about every city in the world, do you really think the developers are so hungry for the $ and out of touch with reality?

Come on guys get real...these guys don't start building until x% amount is sold off the plan which means they will cover costs plus holding of unsold condos.

Most new condos actually increase in value in BKK i know a few women who bought and later flipped them and they did it easy enough, and the hot deals someone gets is probably from some foreign guy who payed to much to start with.

[trogers]

To many armchair experts.....gibberish talk on over supply in just about every city in the world, do you really think the developers are so hungry for the $ and out of touch with reality?

Come on guys get real...these guys don't start building until x% amount is sold off the plan which means they will cover costs plus holding of unsold condos.

Most new condos actually increase in value in BKK i know a few women who bought and later flipped them and they did it easy enough, and the hot deals someone gets is probably from some foreign guy who payed to much to start with.

You are mistaken here. Bookings of newly launched condo projects do not equate with actual nor effective demand.

Like you have mentioned about flipping by a few women you know, bookings also include a certain amount of speculators.

To reduce speculation, and problems during title transfer, Raimon Land had recently announced jacking deposits for their projects to 40% of selling prices.

[WorkingTourist]

"What would the price be (after this discount)?"

Here's a hint: go to the sales office and ask. If you cant calculate 50% of 80,000 - you should have stayed in your home country.

I am more than 500 km from the sales office, so instead I looked at what the going rate is on the internet (as my post already made clear) and then asked the guy, who had seen the billboard advertising the discount, for clarification, as the developer’s web site and the resales on prakard.com indicates that the 50% discount is likely on some fictive price that no-one ever paid.

Here’s a hint for you: If you don’t know the answer, don’t bother replying, because you’re not adding anything of value.

[AlexRRR]

To many armchair experts.....gibberish talk on over supply in just about every city in the world, do you really think the developers are so hungry for the $ and out of touch with reality?

Come on guys get real...these guys don't start building until x% amount is sold off the plan which means they will cover costs plus holding of unsold condos.

Most new condos actually increase in value in BKK i know a few women who bought and later flipped them and they did it easy enough, and the hot deals someone gets is probably from some foreign guy who payed to much to start with.

You are mistaken here. Bookings of newly launched condo projects do not equate with actual nor effective demand.

Like you have mentioned about flipping by a few women you know, bookings also include a certain amount of speculators.

To reduce speculation, and problems during title transfer, Raimon Land had recently announced jacking deposits for their projects to 40% of selling prices.

No your mistaken.....there are to many armchair experts ....parrots too who repeat someones "expert opinion".

The girls who flipped had a contract to buy....so they were sold, assuming they couldn't sell they would have settle on them, another i know bought off the plan and has just taken possession of a new condo but this girl is holding out until the BTS is up and running.

Lot of guys in here look down on Thais I'm guessing they don't think there capable in business, don't have a mind to make money.

The press here in AU have gone on about foreign buyers buying up property and causing a boom...well we have laws too and i can assure you those Chinese or foreign buyers are not out in the burbs looking for your half a million dollar properties, those foreign buyers who are buying are looking at the million plus....or and this is common downtown condos for there kids to live in while they go to an Australian University but there a very small % of the actual market turn over.

A bored press along with some nuckle heads who don't know any better carry on about over supply..... You can believe me when i say until a certain % of units are sold construction doesn't start.

[trogers]

To many armchair experts.....gibberish talk on over supply in just about every city in the world, do you really think the developers are so hungry for the $ and out of touch with reality?

Come on guys get real...these guys don't start building until x% amount is sold off the plan which means they will cover costs plus holding of unsold condos.

Most new condos actually increase in value in BKK i know a few women who bought and later flipped them and they did it easy enough, and the hot deals someone gets is probably from some foreign guy who payed to much to start with.

You are mistaken here. Bookings of newly launched condo projects do not equate with actual nor effective demand.

Like you have mentioned about flipping by a few women you know, bookings also include a certain amount of speculators.

To reduce speculation, and problems during title transfer, Raimon Land had recently announced jacking deposits for their projects to 40% of selling prices.

No your mistaken.....there are to many armchair experts ....parrots too who repeat someones "expert opinion".

The girls who flipped had a contract to buy....so they were sold, assuming they couldn't sell they would have settle on them, another i know bought off the plan and has just taken possession of a new condo but this girl is holding out until the BTS is up and running.

Lot of guys in here look down on Thais I'm guessing they don't think there capable in business, don't have a mind to make money.

The press here in AU have gone on about foreign buyers buying up property and causing a boom...well we have laws too and i can assure you those Chinese or foreign buyers are not out in the burbs looking for your half a million dollar properties, those foreign buyers who are buying are looking at the million plus....or and this is common downtown condos for there kids to live in while they go to an Australian University but there a very small % of the actual market turn over.

A bored press along with some nuckle heads who don't know any better carry on about over supply..... You can believe me when i say until a certain % of units are sold construction doesn't start.

Sold? Or Booked? The % of units to kick start construction...

If sold, then there would be title transfer and 100% payment made. When does this occur, before start of construction or on completion of the same?

And why would Raimon Land fret about speculation and problem during title transfer if they had all those units 'sold'?

http://www.ddproperty.com/th/%E0%B8%82%E0%B9%88%E0%B8%B2%E0%B8%A7%E0%B8%AD%E0%B8%AA%E0%B8%B1%E0%B8%87%E0%B8%AB%E0%B8%B2%E0%B8%A3%E0%B8%B4%E0%B8%A1%E0%B8%97%E0%B8%A3%E0%B8%B1%E0%B8%9E%E0%B8%A2%E0%B9%8C-%E0%B8%9A%E0%B8%97%E0%B8%84%E0%B8%A7%E0%B8%B2%E0%B8%A1/2015/9/108747/raimon-land-uses-high-deposits-to-combat-speculato/?utm_source=pgth-newsalert&utm_medium=edm&utm_campaign=dailynews-24Sep2015&utm_content=links

Edited September 30, 2015 by trogers

[huawei]

I would like to know what the profile of the project or condominium will be to find these heavily discounted condos. Low end, high end? Loads of units? Which developer ? A bit broad but interested if there is.

[AlexRRR]

To many armchair experts.....gibberish talk on over supply in just about every city in the world, do you really think the developers are so hungry for the $ and out of touch with reality?

Come on guys get real...these guys don't start building until x% amount is sold off the plan which means they will cover costs plus holding of unsold condos.

Most new condos actually increase in value in BKK i know a few women who bought and later flipped them and they did it easy enough, and the hot deals someone gets is probably from some foreign guy who payed to much to start with.

You are mistaken here. Bookings of newly launched condo projects do not equate with actual nor effective demand.

Like you have mentioned about flipping by a few women you know, bookings also include a certain amount of speculators.

To reduce speculation, and problems during title transfer, Raimon Land had recently announced jacking deposits for their projects to 40% of selling prices.

No your mistaken.....there are to many armchair experts ....parrots too who repeat someones "expert opinion".

The girls who flipped had a contract to buy....so they were sold, assuming they couldn't sell they would have settle on them, another i know bought off the plan and has just taken possession of a new condo but this girl is holding out until the BTS is up and running.

Lot of guys in here look down on Thais I'm guessing they don't think there capable in business, don't have a mind to make money.

The press here in AU have gone on about foreign buyers buying up property and causing a boom...well we have laws too and i can assure you those Chinese or foreign buyers are not out in the burbs looking for your half a million dollar properties, those foreign buyers who are buying are looking at the million plus....or and this is common downtown condos for there kids to live in while they go to an Australian University but there a very small % of the actual market turn over.

A bored press along with some nuckle heads who don't know any better carry on about over supply..... You can believe me when i say until a certain % of units are sold construction doesn't start.

Sold? Or Booked? The % of units to kick start construction...

If sold, then there would be title transfer and 100% payment made. When does this occur, before start of construction or on completion of the same?

And why would Raimon Land fret about speculation and problem during title transfer if they had all those units 'sold'?

A deposit is payed and a contrat to purchase is drawn up .... a legal document that means if fail to pay the stages you will forfeit your deposits.

They can't be paid in full until construction is completed, and there are stages in the construction process that a % of the cost price will need to be paid, on hand over the final payment is payed then title is given over etc.

The % sold prior to starting construction would be based on cost estimates of construction and holding unsold apartments....they been in the business long enough to know what that is....its not a hit and miss thing you know.

Maybe Raimon are not pulling a better clientele or maybe they can get away with it, who knows why....anyone else doing? Nobody i know would drop 40% deposit on the table without an iron clad contract dates of completions and damages in the bucket loads if not completed on time.

[AlexRRR]

Your link shows deposits of 25% in AU that would never be allowed...40% of the up market propertys, well mate the people buying the UP market ones wouldn't I'm sure pay it...and if they did you bet your pants they would have all sorts of damage clauses in there to protect them selves, these people would be well heeled.....anyway take it from me its all marketing, that press release is all about "how good they are" Ive seen that sort of writing all over the Bangkok Post...

[AlexRRR]

I would like to know what the profile of the project or condominium will be to find these heavily discounted condos. Low end, high end? Loads of units? Which developer ? A bit broad but interested if there is.

Wake up...its called marketing to lure you in...every one is looking for a bargain but there are few out there, they sell for what the market says there worth..

[trogers]

Your link shows deposits of 25% in AU that would never be allowed...40% of the up market propertys, well mate the people buying the UP market ones wouldn't I'm sure pay it...and if they did you bet your pants they would have all sorts of damage clauses in there to protect them selves, these people would be well heeled.....anyway take it from me its all marketing, that press release is all about "how good they are" Ive seen that sort of writing all over the Bangkok Post...

I don't know about Australia, but the practice in Thailand can call for a deposit as little as 10% divided over many months. These are the projects that would maintain a sales office in the project after construction completion to sell 'resales' units because people who booked abandoned their deposits.

Raimon Land is not stupid either. They can always tailor deposit payments to stages of construction progress like in Singapore, where 90% would be paid up by the buyers on completion, and the balance 10% on title transfer.

[AlexRRR]

Your link shows deposits of 25% in AU that would never be allowed...40% of the up market propertys, well mate the people buying the UP market ones wouldn't I'm sure pay it...and if they did you bet your pants they would have all sorts of damage clauses in there to protect them selves, these people would be well heeled.....anyway take it from me its all marketing, that press release is all about "how good they are" Ive seen that sort of writing all over the Bangkok Post...

I don't know about Australia, but the practice in Thailand can call for a deposit as little as 10% divided over many months. These are the projects that would maintain a sales office in the project after construction completion to sell 'resales' units because people who booked abandoned their deposits.

Raimon Land is not stupid either. They can always tailor deposit payments to stages of construction progress like in Singapore, where 90% would be paid up by the buyers on completion, and the balance 10% on title transfer.

My ex accountant TGF told me how they structured the payments, similar to AU, payments were in stages, I'm a builder so i do have an understanding of the process, she flipped it before one of the payments and made a fairly reasonable profit for just 3 months....nothing to sneeze at, the point is......they expect defaults its all part of the game, and yeah the office has a hand in finding a new buyer but I've seen them advertised on Thai property websites as well, that office would get a commission from the flipper so its a win win.

My grip here in TV is with this myth of oversupply...even in AU they go on about it, there is a property cycle in AU at least were it rises then falls then stabilises then begins its rise once again, in the end property sells for what market will pay, there are few fire sales and even fewer bargains, the economy of the day dictates how many buyers are out there as well, BKK i would think being an international city with many mulit national companies attracted to it along with expats seeking to live there are part of the reason it will never drop as the doom and gloom merchants predict in here.

Lot of nervous people because of the sub prime fiasco, Ireland before Greece and Iceland after due to other issues as well as US property going to the wall, it tumbled in AU but nothing like else where and this day property is now back and beyond the 20% or so drop of a few years ago.

ps...new property always sells at a higher price than an older one in the same area except were LOCATION is highly desired, and or the house on that land is a period home ( victorian, federation style 100 plus year old home), in AU new units on small allotments sell for more than an established house on large allotments...

I won't be buying off the plan in Thailand.

Edited September 30, 2015 by AlexRRR

[WorkingTourist]

I would like to know what the profile of the project or condominium will be to find these heavily discounted condos. Low end, high end? Loads of units? Which developer ? A bit broad but interested if there is.

The article mentions that the cause of these bargains are that “some of those applicants, around 10 to 20 percent, have been rejected for mortgages by commercial banks”.

Presumably the number is just someone’s guess, but I would assume that more low-income families are rejected for mortgages and thus it would mostly be projects that appeal to them.

But let’s wait until we actually see some of these bargains. The imminent correction/crash has been a TV topic for longer than I have been a member here.

[OnMyWay2]

renting is a way better deal unless prices fall by a lot.

[coulson]

Seems like there's always a demand for new build condos, so the older ones will become deserted at some point.

The older ones are more affordable. The deserted ones will be those smaller units within large developments, all those fancy sales offices and funky models scheduled for completion in 2017 (18/19) that have prices off the chart.

Who in their right mind can predict a sustainable demand for fancy one bed shoeboxes looking for 25,000 a month when the local salary is half of that.

Russian rubles gone home, yuan deflated and a cranky pm tickling the US.

It will be an interesting couple of years ahead.

[VIPinthailand]

if price of condo go down, price of rent go down as well.

even a shoe box at 10k bahts is too much.

[trogers]

Seems like there's always a demand for new build condos, so the older ones will become deserted at some point.

The older ones are more affordable. The deserted ones will be those smaller units within large developments, all those fancy sales offices and funky models scheduled for completion in 2017 (18/19) that have prices off the chart.

Who in their right mind can predict a sustainable demand for fancy one bed shoeboxes looking for 25,000 a month when the local salary is half of that.

Russian rubles gone home, yuan deflated and a cranky pm tickling the US.

It will be an interesting couple of years ahead.

I have mentioned before about the myth that Thais buy only new, even when prices are much higher than old units.

They do so because they can get close to a 100% mortgage for new property, against only 50-60% mortgage for old units.

[Rocketsurgeon]

Interesting. No way of knowing how this was already baked into the market though. If one stops and thinks, ten to a ehopping twenty percent of developers are set to lose deposited sales, that's pretty huge. Coupled with a host of other factors.

Raimon will require larger deposits now.

Clearly storm is brewing.

Edited October 1, 2015 by Rocketsurgeon