Under The Current Climate Would You Buy A Condo?

[HenryB]

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.

I agree Pattaya is quality. Everything in Pattaya is quality. You must have class.

[The Skipper]

Lots of 10 year old projects still waiting to be finished and the owners still waiting to move in....

Why would anybody buy an unfinished project in Thailand ?

Too many potential problems. Will it get completed?

Will the finish be the same as advertised?

Does the project resemble the brochure?

Projects start with nice specs in glossy renderings and then once almost all is sold out they downgrade them to increase their net profits.

It reduces the resale value once the building is finished.

Here is a sample of a project on Suk 31.

Changed since first bought in sept. 05:

1. changed the size of the 2nd bedroom from floor-2-ceiling to normal. The renderings clearly shows a floor-2-ceiling window.

2. replacement of the glasses at the pool with normal concrete. This is really bad, as the pool was a real gimmik which made that place special on the first view. All renderings show that glass.

3. confirmed that there will be no window in the living room next to the balcony doors will. The floorplan shows that window.

4. pool deck (pool made smaller.

5. lobby (took out the nice water ways).

6. reduction of garden space downstairs.

7. the ceiling was reduced from 2.7 Meter to 2.6 Meter

8. the front door is not made from solid wood

9. the bath tup and other bath appliances are not from solid caramic

10. the aircon compressors of the living room should be placed inside the void, not next to the balcony

[backflip]

I'm not sure that I agree with the comment that there are lots of decade-old condo developments that buyers are waitnig to move in. That's a silly comment.

On the other hand, condo developers do make changes...on Soi 22, a sales office indicated what the two-story duplexes would look like. Very nice! Within 6 months, the sales people added the following comments, "The lighting fixtures have changed, the cieling is no longer recessed, the bathroom fixtures have changed, the kitchen fixtures have changed, and the windows are no longer 'floor-to-cieling'." The last change was caused by a structural modification made by the developer. In order to squeeze in a couple more stories, the floor plates were poured thinner. The thinner floors would allow the building to twist, causing the windows to break. To alleviate that, the building was redesigned with a one meter concrete band along the bottom of the window frames.

The Regents had a more honest approach. They built a sales office and, when it became apparent that the condos would not look like the models, they completely rebuilt the sales office.

[thaigene2]

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.

You can bet your last Baht the big foreign companies are watching this very closely. Your trouble today could be their's tomorrow.

Forget what the big foreign players say publicly (japanese for example say they will not 'review' investment decisions at present). It's about saving face and (increasingly) desparately trying to find a Plan B, C etc that won't lose them their shirts or become victimised by hi-so Thai opportunists (new borad members, shareholders willing to help - for a 'price' etc). Remember the big companies weigh risks when doing deals and prior to investing - it's called 'Due Dilligence'. You can bet they are dilligently re-assesing their future plans as we post.

[The Skipper]

I'm not sure that I agree with the comment that there are lots of decade-old condo developments that buyers are waitnig to move in. That's a silly comment.

Never finished projects.

http://www.skyscrapercity.com/showthread.php?t=200068

Quite a few made downpayments and are still waiting....

[backflip]

The thread includes hundreds of projects, virtually all of which are commercial, not residential. I understand you're upset, but it's not necessary to stretch a point to make one.

[backflip]

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Edited January 14, 2007 by backflip

[The Skipper]

The thread includes hundreds of projects, virtually all of which are commercial, not residential. I understand you're upset, but it's not necessary to stretch a point to make one.

Ok. So a list of 508 ghost buildings isn't good enough, come by and look at the building next door to mine.

A 10 year old condo project, barely off the ground with the owners still waiting....

[quiksilva]

That thread is two years old Skip.

Look around Bangkok and you'll see that alot of the so called "ghost buildings" in Bangkok have recommenced construction.

The Column is complete already, Rachada Square is under construction again after being bought by TCC Capital Land (100,000 sqm of office space), CU Hitec (Rama IV) will be finished Q1 2008 renamed Jamjuree Square (90,000 sqm offices, plus retail and apartments) even the two old ghost towers on Narathiwat (behind JC Kevin) have recommenced construction (to be serviced apartments) and are due to finish next year.

RCK that they mentioned is now home to Sirocco, and the old Novotel is now open for business as the Hilton.

Whilst there are certainly plenty of old projects that are still waiting to be complete that figure 508 will be much lower today and I am aware of a number of investors in negotiations on several more 'ghost buildings' that they mentioned. Why? Probably because its much cheaper to make an old ghost good than to start from scratch, also many of these occupy prime development sites, that are just so difficult to find in todays market.

Buying off plan is certainly a risk, but the banks got stung so severely in 1997 they tend to be more conservative these days and many will not green light construction financing until developers have sold a certain portion (I think its 60%).

Edited January 15, 2007 by quiksilva

[The Skipper]

True.

At least half of the projects on the list are up and running now.

The question is,..when is the next crisis?

I don't think the reward is worth the risk.

Personally, I'd never put money into an unfinished project around here. Too many empty units available.

[trajan]

True.

At least half of the projects on the list are up and running now.

The question is,..when is the next crisis?

I don't think the reward is worth the risk.

Personally, I'd never put money into an unfinished project around here. Too many empty units available.

Skipper, your point is well taken (and we should be very cautious when buying off plan), BUT for certain quality (and well-located) projects with good track-record developers, the risk is sometimes worth it... for example, The Athenee Residence on Ruam Rudee next to the Ploenchit skytrain station is well on promised schedule and my close friend who bought a unit is very happy.... painting everything with the same gloomy brush is just not accurate...

[samtam]

Talking of new condos in that area, does anyone know why the Park Chidlom is so far behind? I believe it was scheduled to be finished in November, but it looks as though it will be another six months.

[trajan]

I heard from someone in the industry (but not verified) that one contributing factor was a major problem with the facade glass sub-contractor's product/less than satisfactory specifications, etc. I personally dont think there is any danger of not finishing the Park Chidlom, just a delay....

BUT I also personally thought from the beginning that Athenee Residence was a slightly better bet (and location)...

[trajan]

The Regents had a more honest approach. They built a sales office and, when it became apparent that the condos would not look like the models, they completely rebuilt the sales office.

to be blunt, I would not use the "Regents" and "honest' in the same sentence.....extremely behind schedule and was NOT forthcoming about progress....Regents (developer Grande Asset) launched much earlier than Athenee Residence (developer TCCL Capita Land) and promised (hand-over- heart) delivery on schedule (when I visited the sales office back before Xmas holidays in 2004)....basically nothing happened with structure until Lehman Brothers took over Grande Asset through holding companies (mid 2006).....

[thaigene2]

I heard from someone in the industry (but not verified) that one contributing factor was a major problem with the facade glass sub-contractor's product/less than satisfactory specifications, etc.

Do you mean the Sub-contractor did the old "switcheroo" to use a cheaper product and pass it off as the original, or do you mean the original specs weren't satisfactory?

[MrPlum]

And the moral of the this story is ? Dont listen to the "doom and gloom" brigade; but be happy they are there as they are the ones who make you richer by paying off your mortgages through their rents.. Real Estate investment is the BEST way to achieving financial and personal independance. Paying rent is the equivilent of showering in $ 100 bills, once it leaves your hands you never see it again.

In theory, I agree wholeheartedly with your comments. However, reality can be somewhat different...

Each of my 3 ex-wives bagged the house in divorce settlements. Many men in Thailand will have similar experiences. Paying rent is far cheaper and less emotionally and psychologically damaging than working your balls off for umpteen years, for the benefit of your spouse and her new squeeze.

Not everyone had or has the foresight, or your good fortune, to invest in property. Hindsight is a wonderful thing and I suspect that most readers of this forum are long past the age of achieving similar outcomes.

[pkrv]

Trajan - You have a vested interest in the Athenee Residence - Congratulations by the way for the award.

http://www.thaivisa.com/forum/index.php?sh...58207&st=30

Other material

I have always been open on our purchase of The Park

The Park is delayed true - but this is openly discussed. The windows in comparison to world commodities events? My god what planet are you guys living on?

I will be open and honest on what I think when we move in. Our biggest hurdle now is booking flights for 'inspection' furnishing etc

Completion is Imminent (the next few months)

[quiksilva]

I notice that now after 210 votes the community is now split exactly 50:50 on whether to buy or not.

Has anyone else noticed that the number of people interested to buy has also actually increased over the last few weeks?

[englishoak]

Has anyone else noticed that the number of people interested to buy has also actually increased over the last few weeks?

Well they say there's one born every minute.

[trajan]

Trajan - You have a vested interest in the Athenee Residence - Congratulations by the way for the award.

Actually my very close friend got a unit, so it almost feels like I have an interest

[trajan]

I notice that now after 210 votes the community is now split exactly 50:50 on whether to buy or not.

Has anyone else noticed that the number of people interested to buy has also actually increased over the last few weeks?

yes, when I was last selling a condo, I got the most inquiries to buy immediately after the military coup, which I thought was strange....I sold the next month on one of the inquiries

some people buy during a crisis (or perceived crisis) and dont follow the herd... I would imagine that a good portion of those do very well (and some very badly...) but definitely not the average "joe"......

[backflip]

englishoak,

Whenever I read your or skipper's constant braying about the Thai real estate market, I think of Bob Lutz – former CEO of both Chrysler and GM, “I’m often wrong, but seldom in doubt.”

You and your ilk have been predicting the collapse of the Thai real estate market, since the economic problems of 1997. Let’s see what you and your like-minded prognosticators have posted as reasons the real estate market will collapse:

real estate is too cheap because it’s not worth anything

real estate is too expensive

the weak Thai baht

the strong Thai baht

overbuilding of the condo market

cancellation of several condo projects

the rise of the SETI

the fall of the SETI

crackdown on alcohol/cigarettes/prostitution

9/11

completion of suspended housing and commercial projects

not completing suspended housing and commercial projects

the planning of Thai infrastructure projects

the completion of Thai infrastructure projects

the delay of Thai infrastructure projects

the bombings on NYE

SARS

avian flu

counterfeit goods

bad manners

real estate markets outside of Thailand

the weak US dollar

the price of gold

the reelection of the PM

the ouster of the PM

the military takeover of the government

the tsunami

George Bush

Tony Blair

high interest rates, anywhere in the world

low interest rates anywhere in the world

high inflation

low inflation

religious fundamentalists

pedophiles

the change in visa rules

the change in ownership rules for land development companies

the change of ownership rules of any other company

the change of land ownership rules

the “slow” real estate market

the “fast” real estate market

the price of oil

closing the Suan Lum night market

removal of slums

not removing the slums

the mafia

crooked politicians

naïve politicians

the new airport

the price of tobacco and alcohol products

advertising of anything

the ban of advertising of some things

materialism

capitalism

socialism

The only things you haven’t blamed for your anticipated crash of the Thai real estate market are:

soi dogs

trans fat

the ozone layer

For obvious reasons, whenever a real estate related article mentions the possibility of prices softening, you claim that the news supports your prediction. However, whenever an article mentions something positive about the Thai real estate market, you claim that it’s a lie, simply propaganda. Despite everything that has happened, the Thai real estate market has largely maintained its value, outperforming the wildest expectations, and most dire predictions.

Perhaps your wish and your prediction will eventually come true, but you’ve been wrong for the past decade.

[The Skipper]

englishoak,

Whenever I read your or skipper's constant braying about the Thai real estate market, I think of Bob Lutz – former CEO of both Chrysler and GM, “I’m often wrong, but seldom in doubt.”

You and your ilk have been predicting the collapse of the Thai real estate market, since the economic problems of 1997. Let’s see what you and your like-minded prognosticators have posted as reasons the real estate market will collapse:

real estate is too cheap because it’s not worth anything

real estate is too expensive

the weak Thai baht

the strong Thai baht

overbuilding of the condo market

cancellation of several condo projects

the rise of the SETI

the fall of the SETI

crackdown on alcohol/cigarettes/prostitution

9/11

completion of suspended housing and commercial projects

not completing suspended housing and commercial projects

the planning of Thai infrastructure projects

the completion of Thai infrastructure projects

the delay of Thai infrastructure projects

the bombings on NYE

SARS

avian flu

counterfeit goods

bad manners

real estate markets outside of Thailand

the weak US dollar

the price of gold

the reelection of the PM

the ouster of the PM

the military takeover of the government

the tsunami

George Bush

Tony Blair

high interest rates, anywhere in the world

low interest rates anywhere in the world

high inflation

low inflation

religious fundamentalists

pedophiles

the change in visa rules

the change in ownership rules for land development companies

the change of ownership rules of any other company

the change of land ownership rules

the “slow” real estate market

the “fast” real estate market

the price of oil

closing the Suan Lum night market

removal of slums

not removing the slums

the mafia

crooked politicians

naïve politicians

the new airport

the price of tobacco and alcohol products

advertising of anything

the ban of advertising of some things

materialism

capitalism

socialism

The only things you haven’t blamed for your anticipated crash of the Thai real estate market are:

soi dogs

trans fat

the ozone layer

For obvious reasons, whenever a real estate related article mentions the possibility of prices softening, you claim that the news supports your prediction. However, whenever an article mentions something positive about the Thai real estate market, you claim that it’s a lie, simply propaganda. Despite everything that has happened, the Thai real estate market has largely maintained its value, outperforming the wildest expectations, and most dire predictions.

Perhaps your wish and your prediction will eventually come true, but you’ve been wrong for the past decade.

So, are you buying into the market at current prices?

I thought so.

[backflip]

skipper,

For any piece of Thai real estate, at any time, under any circumstance, there is a fair price.

[The Skipper]

skipper,

For any piece of Thai real estate, at any time, under any circumstance, there is a fair price.

Agreed...and it's a lot lower than current asking prices.

I've got dry powder and will be looking for desperate sellers soon.

[backflip]

I bought a couple years ago, when 1USD got 40THB. My completely fitout 160m2 condo in an architecturally attractive building cost me 6 million THB. A couple blocks down the street, people are paying over 100,000THB/m2. I think that I did OK, and that's what counts.

[OlRedEyes]

I notice that now after 210 votes the community is now split exactly 50:50 on whether to buy or not.

Has anyone else noticed that the number of people interested to buy has also actually increased over the last few weeks?

Ask any community under reasonable economic conditions if real estate is a good investment and you'll get a 95% yes answer. The fact that its split around 50:50 is a comment in itself.

[Blake7]

skipper,

For any piece of Thai real estate, at any time, under any circumstance, there is a fair price.

Agreed...and it's a lot lower than current asking prices.

I've got dry powder and will be looking for desperate sellers soon.

Well I have someone trying to flog me a condo - started at 18 mil and now they are begging me to give them 13m for it....

Even at the discount I dont think I will bother.

[jumnien]

The present government is doing everything it can to make prices of real estate more affordable to foreign buyers. Given that, I'd wait and see what further programs they undertake to accomodate further price reductions in favor of the foreign buyer. Take a wait and see approach to the "amazing junta" price reduction program!

[pkrv]

Backflip - a very amusing and astute response.

IMO first world and to some extent second world countries now all live in highly educated societies. Each day we undergo a barrage of selling/marketing and scare mongering (for example "have you saved in your pension for your old age?").

The final upshot of all this is now extremely visible; people are taking direct control of their futures. Unfortunately the only way of expressing this financially is in property. This is done via two mechanisms.

1) Purchase of property

2) Paying off mortgages (it’s tax free, guarantees positive returns and improves the state of the property market/personal wealth - in all aspects)

Whilst some will try to capitalise on this trend, the world is a large place, the adventurous will simply divert when markets become difficult. Governments have taken note and if intelligent comply.

I however believe Thailand is a good bet, as does everyone who contributes to this forum (for whatever reason otherwise why are you here?). Thailand is a country in transition, it is throwing out the rubbish (trash), on many fronts, fundamentally understands that the military cannot sustain civil rule, and is growing rapidly at all levels.

Not a place to make huge mark ups on property prices agreed - but I think that is a good thing (less fly’s attracted to that, that is not rubbish). There are English teachers on this forum I think the last bracketed comments made sense but may need to be translated.