Under The Current Climate Would You Buy A Condo?

[ThaiBob]

....

You pay a deposit - not much - only 20,000 B or so, then you pay another deposit of 80,000 or so a few weeks later. Then each month you drip feed 10 or 15,000 for around 15 or 16 month until the project is finished. So it may well appear that the place is indeed nearly sold out since all thsoe people have paid their deposits, etc.

So by the time it's built - on a condo worth say 7 million baht, you've only paid around 300,000 - 400,000 Baht. You don't pay the rest til its time to move in. In other words the 6.7 million baht is still in the bank. But no one ever bothers to check whether you actually HAVE the 6.7 million! So it's a game that Thais play. They like their Chinese gandparents are born to gamble they love it.

And they are gambling that they won;t have to cough up the 6.7 million. They are gambling that prices along with the pyramid will continue to rise and they will sell to 'someone else' (get to that in a second) a few months before completion - at a profit of course - because 'prices always rise'.

Interestingly, I spoke to afew Thais who were speculating today and I spoke a few weeks back to some Thais in my office who've bought to either flip before completion or - in some cases rent. And guess who they all said were their target customers? Yes..Farangs.

They don't seem to understand that their own government is drying up the market for these Thai middle-class speculators by cracking down on the farangs who want to live here without work permits. No farangs, considerably less market.

So what would happen if these buildings get to the completion point and then ask all those 'sold-out' customers for the 90% final payment? What happens if they haven't flipped and worse - don't have the money (the 6.7 million)? Does the bank reposess from the developer?

The above is not scientific..but it's worth thinking about.

This scenario you just described does not apply to the condo projects I'm familiar with in Pattaya. Once the monthly installments payments are finished you invested 40% (not 10%) in the total cost of the condo and the final ballon payment is due at project completion (about 60%). It is the selling pre-construction contracts and the monthly payments received by the developer that finance much of the construction costs. If a buyer backs out of the contract or doesn't come up with the final payment he could lose up to the the 40% paid. Unlike a bank mortgage or loan there is no finance charge paid to the developer.

[pkrv]

OK - There is a flip side to <deleted> argument, that was Westernised Oriental Gambler? (I'm being flippant, quite how a small island a few hundred miles long and less wide could manage to piss the entire world off leaves me quite flabbergasted).

There are births marriages and deaths to consider. Not everyone does a calculation, nor indeed tries to do a calculation, though that is an interesting thought process that can be easily predicted.

Not everyone thinks in the same way....

[thaigene2]

Will I do it in Thailand? Not really. (I have been to Thailand no fewer than 100 times, since 1964.)

Why not Thailand? It's the system. I love the people, but hate the system. Have you wondered why the real estate markets in Malaysia, Indonesia and Philippines never quite took off? Got the picture?

For those of you who are caught, or will be caught, in the real estate "boom" in Thailand, the consolation is that "farangs" (which means foreigners) include non-Thai Chinese "gamblers" from Hong Kong, Singapore and Taiwan.

Good luck to you all.

Some good points. However, the people I referred to who had paid their deposits to either flip or rent were all Chinese-Thais, and they were all betting that they would sell/rent to farangs.

Also, the economies of the three other countries you mentioned are also overwhelmingly controlled by ethnic-Chinese..so maybe I missed your point there.

[Knowsitlike]

the 'first rule' could be applied to anything.. eg: dont buy more ferrets to smuggle to California than you could afford to lose. So i am not sure of its value other than to ward off people who maybe should not own ferrets in the first place- like Richard Gere. Investment is risky, walking down the street is risky, stuffing ferrets in your nether regions is prob risky but that does not mean you should not choose to do it if you get a kick out of it.. just dont blame anyone else if it all goes horribly wrong and you end up in a bloody mess of ferret fur and clingfilm.. I voted Yes BTW.

[teej]

They don't seem to understand that their own government is drying up the market for these Thai middle-class speculators by cracking down on the farangs who want to live here without work permits. No farangs, considerably less market.

Some decent comments by thaigene, but then again it's common knowledge re: payment and repayment... no secrets there.

I only take issue with the comment quoted above. For the 7million baht condo in the example given by thaigene, I don't think the target renters are "the farangs who want to live here without work permits." In general for 50+K/month, you can find quality renters with quality references... and a work permit to boot. Also, the Thai middle-class isn't messing around with 7mil baht condos.

[thaigene2]

They don't seem to understand that their own government is drying up the market for these Thai middle-class speculators by cracking down on the farangs who want to live here without work permits. No farangs, considerably less market.

Some decent comments by thaigene, but then again it's common knowledge re: payment and repayment... no secrets there.

I only take issue with the comment quoted above. For the 7million baht condo in the example given by thaigene, I don't think the target renters are "the farangs who want to live here without work permits." In general for 50+K/month, you can find quality renters with quality references... and a work permit to boot. Also, the Thai middle-class isn't messing around with 7mil baht condos.

Teej - I wasn't referring to the Kee Nok types, but rather than many, many white collar farangs like consultants and self-employed who make Thailand their base. They are the ones who are getting caught up in this pressure to vacate to Malaysia, Singapore, etc. They don;t have work permits because they aren't 'employed' by a thai company. So that makes them a 'tourist' if you see what I mean. If the new and current visa rules are applied they can no longer stay year-round on that.

If these people go, to whom will those thai-chin speculators rent or sell their places to? By the way, I know at least 2 who are definitely middle class (daughters of real middle class types).

[thaihome]

Teej - I wasn't referring to the Kee Nok types, but rather than many, many white collar farangs like consultants and self-employed who make Thailand their base. They are the ones who are getting caught up in this pressure to vacate to Malaysia, Singapore, etc. They don;t have work permits because they aren't 'employed' by a thai company. So that makes them a 'tourist' if you see what I mean. If the new and current visa rules are applied they can no longer stay year-round on that.

If these people go, to whom will those thai-chin speculators rent or sell their places to? By the way, I know at least 2 who are definitely middle class (daughters of real middle class types).

Well, in my development the speculators are mostly selling to other middle class Thais. I know this as one of the recent buyers (at over 20% more than I paid) happens to be the client representative on one of our projects.

TH

[Maigo6]

To 'buy' anything in Thailand apart from a meal or a beer is a complete gamble, my friend has 4 houses for sale in Pattaya if any of you are interested...............nobody else is!

Company for sale with the houses!!!

You can't own the land, so why would you buy when you can rent any of the massive ammount of properties that cannot be sold or even given away.

And Condos.lol....................don't make me laugh, most of the buildings will fall into total disrepair and the owners of the small box's they paid for will be unable to sell at any price, the building will eventually fall down and then a new building will replace the old one with a whole bunch of new fools parting with silly money for a hutch in the sky....................

Property developers are smart people, condo buyers are not..............

You think property developers don't own their own land and house?

[The Skipper]

Buy quality / Own quality.

If you bought a quality condo, 5 or 10 years ago, the building is well maintained, in a good location, then you made money and had a good place to live.

Same same for the future.

[dannyb]

To 'buy' anything in Thailand apart from a meal or a beer is a complete gamble, my friend has 4 houses for sale in Pattaya if any of you are interested...............nobody else is!

Company for sale with the houses!!!

You can't own the land, so why would you buy when you can rent any of the massive ammount of properties that cannot be sold or even given away.

And Condos.lol....................don't make me laugh, most of the buildings will fall into total disrepair and the owners of the small box's they paid for will be unable to sell at any price, the building will eventually fall down and then a new building will replace the old one with a whole bunch of new fools parting with silly money for a hutch in the sky....................

Property developers are smart people, condo buyers are not..............

You think property developers don't own their own land and house?

anything man create will eventually fail.

condo can be a good investment in my opinion.

[Tolley]

To 'buy' anything in Thailand apart from a meal or a beer is a complete gamble, my friend has 4 houses for sale in Pattaya if any of you are interested...............nobody else is!

Company for sale with the houses!!!

You can't own the land, so why would you buy when you can rent any of the massive ammount of properties that cannot be sold or even given away.

And Condos.lol....................don't make me laugh, most of the buildings will fall into total disrepair and the owners of the small box's they paid for will be unable to sell at any price, the building will eventually fall down and then a new building will replace the old one with a whole bunch of new fools parting with silly money for a hutch in the sky....................

Property developers are smart people, condo buyers are not..............

You think property developers don't own their own land and house?

anything man create will eventually fail.

condo can be a good investment in my opinion.

Especially true if the condo is not located in Thailand!

[think_too_mut]

condo can be a good investment in my opinion.

A situation I happened to know: a Thai woman (low 30s) married to an oldish farang (75 or so) talked him away from buying a 13 mil condo.

Her reasoning was - when he dies, what's she is going to do with it? She would not live there or bring her Isaan family to camp, eat and socialize on the parquet floors of a 4 bed/3 bath condo.

She was terrified she would be left with unsellable dead wood, even levies will have been too high for her alone.

Of course, she was not totally after buying a condo.

They ended up with a 2.2 mil condo (15 yrs old building, negotiated down to 2 mil) somewhere at the end of SkyTrain lines and the money remained in the bank. She does not have access to it (yet) but when the day comes she is his legal wife and, as far as she knows, it will go to her.

11 mil difference (even if hat is all she inherits after him) - much better than Isaan girl selling a 13 mil condo - and probably never sell it anywhere near the price, if at all, if ever.

[backflip]

You tried to make a point ("Thias don't buy condos because they're bad investments"), and then you immediately harpoon it ("she wanted the money not the condo"). What ARE you trying to say?

[think_too_mut]

You tried to make a point ("Thias don't buy condos because they're bad investments"), and then you immediately harpoon it ("she wanted the money not the condo"). What ARE you trying to say?

1.Thread title:

"Under the currenmt climate, would you buy a condo?"

2. My post:

What somebody (a Thai) did when offered a high end condo on the plate.

3. Link the above 2 if you can.

If that does not work, try giving up.

[thaihome]

You tried to make a point ("Thias don't buy condos because they're bad investments"), and then you immediately harpoon it ("she wanted the money not the condo"). What ARE you trying to say?

1.Thread title:

"Under the currenmt climate, would you buy a condo?"

2. My post:

What somebody (a Thai) did when offered a high end condo on the plate.

3. Link the above 2 if you can.

If that does not work, try giving up.

For every “real life” example you can give of Thai not buying a condo, I can give y9u example of one that has.

Client rep on one of our projects. Just bought into our building. Kicking himself all the way to the mortgage company that he did not do so 18 months ago before prices rose over 20%.

Just like property over the entire world, location and developer, you take your chances, you get what you pay for/

TH

Edited December 14, 2006 by thaihome

[dog412]

so much depends on the individual. myself, living in BKK., i would not do any purchase. while i enjoy the conveniences of this city, i see it offering me less and less as the years go by, along with increasing costs and less value. the investment in public infrastructure is appalling,considering the value of projects being developed. as a single retired individual, i can see BKK. becoming a very less appealing city to live in, particularly as it becomes more expensive. at the moment i stay in the higher priced sukhumvit area with a decent apt. rent of about 8500 baht a month. good value for me. however, things are changing fast, and i am not one to get tied down. best to all in the decisions you make, and may the winds of fairness always blow your direction.

[jumnien]

A friend put a $100,000 deposit on a $600,000 condo project in Bangkok earlier this year. He has been offered over $1,000,000 for the unit from a Singaporean but refuses to sell as he wants to reside in the unit. This is of course not the norm. But the trend is clearly for more and more foreigners to be moving to all parts of Thailand. By the way, this bldg. won't be completed until 2008.

[kokothemonkey]

It truly is funny how dreaming gets in the way of reality, but then again when most people think they are smarter than they really are, what can else can you expect?

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.

Edited December 17, 2006 by kokothemonkey

[xbusman]

''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.

Can anybody explain to me exactly what sense the above statement makes?

[jumnien]

The rich get richer, baby. Follow the money!

As long as they stay out of political office, their fortunes should be allowed to grow exponentially.

[kokothemonkey]

The rich get richer, baby. Follow the money!

As long as they stay out of political office, their fortunes should be allowed to grow exponentially.

LOL.....this means that the rich get richer by selling to the poor suckers at the bottom of the food chain trying to get rich.

Edited December 18, 2006 by kokothemonkey

[jumnien]

The rich get richer, baby. Follow the money!

As long as they stay out of political office, their fortunes should be allowed to grow exponentially.

LOL.....this means that the rich get richer by selling to the poor suckers at the bottom of the food chain trying to get rich.

Often the case, how right you are! However, if you bought in on AIS or Microsoft early on, you might have another animal all together! Sorry, this thread is about real estate isn't it? My money's in commercial real estate for exactly the reason you stated. It puts the richer in the position of buying from me not selling to me.

[Vespa]

Currently , if you are going to buy anything in Thailand , it would have to be a condo.

As an investment - look at it in at least a 5 year term.

Location is key , as well as a high floor and nicely furnished.

Buy a least a double unit , not one of those sad little shoe boxes.

I made a mint in the property market back home and retired here with that bank.

Just make sure you buy right, often easier said than done.

[kokothemonkey]

Based on this, that would be a RESOUNDING NO.

So let me see, basically 30% of my money would be held hostage to support a junta?

Bank regulators in Thailand on Monday required banks to lock up 30 percent of new foreign currency deposits for a year in an effort to stop investors speculating on gains in the baht.

http://www.iht.com/articles/2006/12/18/business/baht.php

[Jingthing]

Based on this, that would be a RESOUNDING NO.

So let me see, basically 30% of my money would be held hostage to support a junta?

Bank regulators in Thailand on Monday required banks to lock up 30 percent of new foreign currency deposits for a year in an effort to stop investors speculating on gains in the baht.

http://www.iht.com/articles/2006/12/18/business/baht.php

Surely this is a major concern to any foreigner buying or selling a condo. Does anyone know if this new rule will apply to foreigners transferring in money with the purpose to buy a condo? If it does, doesn't this sound like kind of disaster for condo prices in buildings that attract foreign buyers? Thailand, still amazing as ever.

Edited December 18, 2006 by Jingthing

[jumnien]

Don't worry... Be happy! Rescinded already.

"Henny, Penny, the skies not falling!"

[xbusman]

Nothing complicated about the first rule of Thailand.

NEVER PUT MORE MONEY HERE THAN YOU ARE WILLING TO WALK AWAY FROM

We are guests of His Majesty in a land without any really predictable law or regulations and as guest have no rights, and especially no priveleges. They can (and do) show up at your door at midnight and take you, your passport and favorite shirt to the airport for a one way trip anywhere but here. They can (and do) change legislation, ex posto facto in most cases, change visa requirements, change any ###### thing they please (and do). Having knowledge of this, you have to come to terms with the very temporary and tenuous nature of your "visit" to the LOS. Interestingly enough, the people who understand this the best are those that survived all the multiple upheavals and have been here for decades.

So in the end, if you live your life in preparation for that day when all entry visas become void and you have six hours to catch the next flight out, and are able to leave without a regret or a financial loss that will cripple your ability to live, then you are indeed a wise and astute survivor in an often tough and unpredictable clime.

But if you plow your hard earned currency in illiquid assets or even banks that do conform to EU or US banking regulations of transparency and protection to a level that will devastate you, then you are in line to join the many Pattaya flyers fulfilling Darwins theories from the high balconies of Jomtien.

New laws, old laws, changing rules of investment, changing visa regulations, one way, the other way, slowly the blissfully ignorant awaken to incessant knocking of old man reality.

[besth]

Sadly going back to one of the threads where I checked for information when I was tending to buy, but not sure about it, mainly because of my limited resources.

Although I am very happy in Thailand and at the moment the only reason I can think for leaving the country is the hopefully unlikely situation that the goverment forces me out by whatever means or reasons, I must say that after the last "company issue", I would never in the present circumstances lock a substantial amount of money (that wouldn't bring me down financially if I lost it, but would make me have to think twice before going into some daily pleasure expenses, which I don't want to have to think about) in a country that keeps showing unfriendly attitudes towards foreign presence.

I do understand that the miniscule investors like myself are not in the minds of the government and that they have their own targets, but it is just not reasonably comfortable to see the posts being moved all the time.

I must confess that I'm specially upset because I had finally found what I wanted. Great condo layout, great location, amazing surroundings, unbelieavable prize for what I would get, reputable developer with proven history, ownership in my own name...

I agreed to pay the required deposit just the day before that company think came up. I went to the sales office to say I would not be buying and the very nice lady there had ready a list of reasons why none of that affected me. I'm sure she was totally right, but it is not enough.

This move would not have affected me, but what about the next one and when would that happen???

I'll be happy to rent there, even at a premium, when the first building is finished, but the currently ruling Junta, with all their merits and right circumstances when they got in, does not give me any confidence about future developments for the interests of us farangs.

[trajan]

besth, where's the condo? I might be interested in buying if its in a great location at an unbelieveable price....

[Ground Engineer]

Just bought a 2 bed unit at the Northpoint Condo in Pattaya. It wont be built for another 3 years but couldnt resist it. Im optimistic about the future of Thailand. Cant see anyone losing out on a quality condo in a quality location.