Supply of Condo units exceeding Effective Demand?

[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.

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.

The current banking climate it is not going to sustain that myth for long.

It's more like 30% deposit required however....made this enquiry about a month ago. Took the bank 4 weeks to do their background check, at which stage the application was withdrawn.

[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.

The current banking climate it is not going to sustain that myth for long.

It's more like 30% deposit required however....made this enquiry about a month ago. Took the bank 4 weeks to do their background check, at which stage the application was withdrawn.

"...owners may face a cash shortage if commercial banks reject their mortgage applications"

So banks may not only be rejecting mortgage applications, but also reducing the % of the mortgage to price of the property.

We may then be seeing 40-50% fall in effective demand compared to the optimistic 10-20% mentioned in the article.

[AlexRRR]

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

Another dreamer that will have to wait forever

[AlexRRR]

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.

The current banking climate it is not going to sustain that myth for long.

It's more like 30% deposit required however....made this enquiry about a month ago. Took the bank 4 weeks to do their background check, at which stage the application was withdrawn.

"...owners may face a cash shortage if commercial banks reject their mortgage applications"

So banks may not only be rejecting mortgage applications, but also reducing the % of the mortgage to price of the property.

We may then be seeing 40-50% fall in effective demand compared to the optimistic 10-20% mentioned in the article.

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

[trogers]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

[AlexRRR]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

BS, I said I'm a builder and no builder is going to carry 90, 95 or 99% of the cost to completion and that's anywhere in the world...you clearly don't know what your talking about.

Your going to need a loan in most cases to purchase and to make stage payments....the client isn't going to apply to a bank 4 weeks before completion there going to have to make stage payments...they will require funds along the way...end of story...they will need a pre approval before they sign anything.,,this happens the world over.

So there for the big discounts or crash they all talk about in here ain't gonna happen.

Edited October 2, 2015 by AlexRRR

[trogers]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

BS, I said I'm a builder and no builder is going to carry 90, 95 or 99% of the cost to completion and that's anywhere in the world...you clearly don't know what your talking about.

ImageUploadedByThaivisa Connect1443776114.932618.jpg

Your going to need a loan in most cases to purchase and to make stage payments....the client isn't going to apply to a bank 4 weeks before completion there going to have to make stage payments...they will require funds along the way...end of story...they will need a pre approval before they sign anything.,,this happens the world over.

So there for the big discounts or crash they all talk about in here ain't gonna happen.

Are you writing from your desk in Australia?

The common practice in Thailand for off plan launches is first a small booking fee, that may be as low as a few thousand baht, and then a deposit that may range from 10% to 25% of the agreed price payable in equal instalments over an agreed period. No payment would be related to any construction stage.

The balance would be payable on title transfer.

Buyers in some failed projects may have finished making full deposit payments before even foundation work have started...

http://www.propertyshowrooms.com/thailand/property/investment/off-plan-property-thailand.asp

Edited October 2, 2015 by trogers

[dennis123]

Screw Thailand for buying, maybe I buy a condo at Cyprus, and wait for them to turn it into a huge refugee <deleted> island.

[hhgz]

You should invest at your acceptable level of risk. Most TVers have a perverted view on investments. If the price of housing drops 5%, they are overjoyed that they didn't buy a home. Yet, when the price of gold drops 30%, they're overjoyed because not they can buy more.

[losworld]

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.

The current banking climate it is not going to sustain that myth for long.

It's more like 30% deposit required however....made this enquiry about a month ago. Took the bank 4 weeks to do their background check, at which stage the application was withdrawn.

Don't bet on it I know a Thai gal with a car payment making 40k per month just bought a 4 million baht house no money down.

[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.

The current banking climate it is not going to sustain that myth for long.

It's more like 30% deposit required however....made this enquiry about a month ago. Took the bank 4 weeks to do their background check, at which stage the application was withdrawn.

Don't bet on it I know a Thai gal with a car payment making 40k per month just bought a 4 million baht house no money down.

And I have a friend who is a housewife and just got a mortgage last week for a completed townhouse for Baht 3.93m.

She has no income but the loan is guaranteed by her foreigner husband.

So, the Thai gal you know could be having a sugar daddy who is the guarantor.

[huawei]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

BS, I said I'm a builder and no builder is going to carry 90, 95 or 99% of the cost to completion and that's anywhere in the world...you clearly don't know what your talking about.

ImageUploadedByThaivisa Connect1443776114.932618.jpg

Your going to need a loan in most cases to purchase and to make stage payments....the client isn't going to apply to a bank 4 weeks before completion there going to have to make stage payments...they will require funds along the way...end of story...they will need a pre approval before they sign anything.,,this happens the world over.

So there for the big discounts or crash they all talk about in here ain't gonna happen.

No. Not true. You can enquire about getting a mortgage thru the developer, but they don't insist on seeing anything from the bank. The issue arises only on transfer assuming you paid the instalments.

[trogers]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

BS, I said I'm a builder and no builder is going to carry 90, 95 or 99% of the cost to completion and that's anywhere in the world...you clearly don't know what your talking about.

ImageUploadedByThaivisa Connect1443776114.932618.jpg

Your going to need a loan in most cases to purchase and to make stage payments....the client isn't going to apply to a bank 4 weeks before completion there going to have to make stage payments...they will require funds along the way...end of story...they will need a pre approval before they sign anything.,,this happens the world over.

So there for the big discounts or crash they all talk about in here ain't gonna happen.

No. Not true. You can enquire about getting a mortgage thru the developer, but they don't insist on seeing anything from the bank. The issue arises only on transfer assuming you paid the instalments.

Which bank issues mortgages without a lien on the property?

[huawei]

Here we go again, most NORMAL people will talk to there bank again in AU you can get a pre approval prior to putting a deposit down, it's just not smart anywhere in the world to put a deposit on a property without knowing you will be approved for a loan....guys Thai's are not stupid people, but there are a very very small % of would be buyers who might just be stupid enough to drop a deposit on a condo then loose it cause they can't get a loan.

Seems most of the posters in here have rented there entire life because few seem to know anything about buying a property, the cycles of property supply and demand and how developers do business.

When the rules of a country require people who buy properties off plan to begin making stage payments on progress of construction, these people who have to get their mortgages finalized and approved a couple of months after booking the unit.

But not for Thailand because no such stage payments are required. And any enquiry on their credit worthiness after making a booking would have expired a couple of years after project construction.

They would still face reassessment for a mortgage when the project is completed and ready for title transfer, subjected to new bank policies...

BS, I said I'm a builder and no builder is going to carry 90, 95 or 99% of the cost to completion and that's anywhere in the world...you clearly don't know what your talking about.

ImageUploadedByThaivisa Connect1443776114.932618.jpg

Your going to need a loan in most cases to purchase and to make stage payments....the client isn't going to apply to a bank 4 weeks before completion there going to have to make stage payments...they will require funds along the way...end of story...they will need a pre approval before they sign anything.,,this happens the world over.

So there for the big discounts or crash they all talk about in here ain't gonna happen.

No. Not true. You can enquire about getting a mortgage thru the developer, but they don't insist on seeing anything from the bank. The issue arises only on transfer assuming you paid the instalments.

Which bank issues mortgages without a lien on the property?

Sorry I meant off plan. You don't need to secure a mortgage until the time of transfer..that's what I meant. No pre- approval of a mortgage needed at time of booking or during stage payments.

[trogers]

Sorry I meant off plan. You don't need to secure a mortgage until the time of transfer..that's what I meant. No pre- approval of a mortgage needed at time of booking or during stage payments.

And this is why effective demand for condos in the pipeline is expected to fall this year and next, because people would had booked and paid their deposits may be have their mortgage applications rejected, or face higher down payments, eg. deposit paid to 15%, but bank lends only 70%.

[Rocketsurgeon]

Yeah, I'm no property magnate but Alex is dead wrong here. In Thailand minimal amounts of money are used in increments to suck the prospective owner into the scheme. Then if they default, so what the dev gets the deposit. Only priblem is that its now backfiring as many default its no longer a win for the dev, in fact they are apparently scrambling to fill the holes in the dike.

Alex, you've had some informative things to say but you're just not correct on this and hell, even I know how these purchases work here.

Point goes to trogers

My personal opinion is BKK is awash in condos and has been for years. This press release is just a mealymouthed way to announce to public that opportunities for that sweet condo that was before overpriced by 50% is now only overpriced by 40%. Buy now!

You can now add office space as well. I know of entire buildings empty....1997 anyone? If these loans to devs are in usd, there will be blood.

[fang37]

CNX is a tough deal. Known as a place for ol' farts, it too has had a building boom.

As a seller, it is a great achievement to get an inspection.

BTW, I am down to B30k/sqm on the 14th floor - great location.

Should I offer my cute body as an added incentive? Just asking.

[WorkingTourist]

CNX is a tough deal. Known as a place for ol' farts, it too has had a building boom.

As a seller, it is a great achievement to get an inspection.

BTW, I am down to B30k/sqm on the 14th floor - great location.

Should I offer my cute body as an added incentive? Just asking.

Let me guess, you have 46² in Riverside?

Two years ago I collected everything listed on Chiang Mai Real Estate’s site and there were 45 condos for sale in Riverside, 6 of them around ฿30k/sqm.

The same site listed 75 units in Riverside for rent.

You say “great location”, but for most people that would be the Old City, Nimmanhaemin, or the Night Bazaar.

Also, 14th floor in Riverside doesn’t actually give you much of a view inside the condo because of the layout.

There might be too many new condos in Chiang Mai, but I wouldn’t use the sqm. price in Riverside as an indicator of the general market. This building has fallen out of favor, and I believe it did so years ago.

[fang37]

I did live at Riverside - 12 years ago. I understand that management has improved massively.

2 condos on the 6th floor - one was a studio.

Then I bought 4 condos on the Holiday Inn side. It was not really a purchase. It was a steal!

I have lived in Hillside 4 for 10 years. 14th floor - 164sqm. Not the hot, western side.

I did enjoy my time there - secure, good staff.

Now, I live a a house in Fang.

Selling? As I said previously, an inspection is a real achievement these days.

Thankfully, I do not need the $$$. Nor to I need the condo!

Edited October 3, 2015 by fang37

[Chewbacka]

We are seeing that in Phuket there is an oversupply of condos in the 1 - 3m THB sector. Prices of condos in this sector are currently stagnating or decreasing while demand catches up with supply. This is great news for buyers as bargains can be had and many condos are priced lower than they were 2 or 3 years ago.

We encourage our clients to always make offers if they are interested to buy and in my estimation 90% of properties are sold below the asking price at present.

[VIPinthailand]

they are all Ripp off.

ask for 50 percent or no deal.

we are the stupid farang to pay so much for these low quality show box...

everyday my gf remind me it s a farang scam. she has been in Thailand since born and saw idiots to fork out so much for a 36 sqm. she laugh at us to be so dumb.

normal condo cost around 500k. not 1.2 millions...

[blackcab]

they are all Ripp off.

ask for 50 percent or no deal.

we are the stupid farang to pay so much for these low quality show box...

everyday my gf remind me it s a farang scam. she has been in Thailand since born and saw idiots to fork out so much for a 36 sqm. she laugh at us to be so dumb.

normal condo cost around 500k. not 1.2 millions...

Any idea where I could get that deal in Bangkok? I'm looking for a new unit straight from the developer. The unit has to be built and ready for occupancy.

Edited October 12, 2015 by blackcab

[BKKdreaming]

they are all Ripp off.

ask for 50 percent or no deal.

we are the stupid farang to pay so much for these low quality show box...

everyday my gf remind me it s a farang scam. she has been in Thailand since born and saw idiots to fork out so much for a 36 sqm. she laugh at us to be so dumb.

normal condo cost around 500k. not 1.2 millions...

But how far away from BTS-MRT are these condos ?

If you have to take a taxi ride or worse a motobike taxi ride ever day each way the $$$ adds up and the time it takes , and hope it is not raining

I would think of buying one just to store my stuff !

[ttthailand]

Price you can rent for one year X 10 and that should be the selling price. Anything over is too much.

[Chewbacka]

Price you can rent for one year X 10 and that should be the selling price. Anything over is too much.

If anyone wants to rent a condo for 10 years, please PM me. I'll buy it and rent it to you and make nice return on my money . You can even choose the condo you want.....

Yes, I agree with the majority of posters on here that buying condos is a scam, renting is the by far the best option......

[balo]

Here in Pattaya they still advertise new condos only 1br, 35 sqm for 3 million baht. Thats way over the market price , even if they look "luxurious" . I would expect the prices to drop to 1.5 mill for the small units.

[BKKdreaming]

Price you can rent for one year X 10 and that should be the selling price. Anything over is too much.

If anyone wants to rent a condo for 10 years, please PM me. I'll buy it and rent it to you and make nice return on my money . You can even choose the condo you want.....

Yes, I agree with the majority of posters on here that buying condos is a scam, renting is the by far the best option......

since you seem to be investing in condos ,

how do value them when buying compared to the rent you get ?

I know you need to make money on your investment and have $$$ to make repairs

[VIPinthailand]

the only way to make money on a condo is to live inside.

I don't think people will make some money by renting to someone else. there are just to many fees(tax, maintenance, ...) and in Thailand they prefer to keep your money in their pocket than fixing things. some don't even clean trash for weeks, you get rats, lift are broken, and stinky smell along corridor.

seems to me these building are built cheap with very cheap material. windows and doors look of low quality.

many building are depressive, especially the one with 4 buildings that are build in a form of a square and swimming pool in the middle with no sun. look like US federal jails.

some have reported to see cracks and fissure in walls in new building . Thailand is a wet country, water will attack your building 10 times faster than in farang land.

[WorkingTourist]

the only way to make money on a condo is to live inside.

I don't think people will make some money by renting to someone else. there are just to many fees(tax, maintenance, ...) and in Thailand they prefer to keep your money in their pocket than fixing things. some don't even clean trash for weeks, you get rats, lift are broken, and stinky smell along corridor.

seems to me these building are built cheap with very cheap material. windows and doors look of low quality.

many building are depressive, especially the one with 4 buildings that are build in a form of a square and swimming pool in the middle with no sun. look like US federal jails.

some have reported to see cracks and fissure in walls in new building . Thailand is a wet country, water will attack your building 10 times faster than in farang land.

Pretty much any new building with plastered walls/ceilings will develop fissures, you generally fix this after the materials/ground have settled and it is nothing to be concerned about.

As for broken lifts, rat infestation, and not being able to make money on buying a condo; Thailand does have more than budget condos located in ghetto areas.

[HampiK]

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.

you are sure, that this 40% they do because of speculators, or to make more money?

Because if 40% is paid upfront, then they have a hugh amount which they can use for other things. So a WIN WIN situation.