Bangkok Condo

[CHRISTIANa9]

I know this is a well discussed topic but just wanna share some info. The developer of the condo at Singha Complex (Asoke), in a newspaper advert states, there are 70,000 completed units in 2016 in Bangkok (I know 2016 isn't over yet, but this was what was stated) and that about 10,000 units are in downtown and that the number of downtown completed units will fall to around 2-3000 in a few years time.

70,000 units in 1 year and given current economic climate, I wonder how it can be fully absorbed. In contrast, Singapore at the peak has about 20,000 units completed condo per year and this is for population of 5.5 million.

Anyway the developer are pushing downtown units as supply will tapper down, probably no more land for development.

[KhonKaenKowboy]

I'm not one of the experts, who have been calling for a crash (for the last 10 years). but I will say that a few weeks ago, I was looking around Udom Suk and they are getting 65K PSM for 7 year old construction, that isn't aging very well. But, I walked by a ReMax office, stopped in, and got a real dirty look from them, when I told them my budget. Basically, they are saying 2 million for what I think should be closer to 1 million....nothing special about building or location..and I was completely unimpressed by that area. But anyhow, the last time I got a sneer like that was in America in late 2007...prices were 75% less by 2009...I then bought three. You just don't see all the leverage and the trading of CDOs in BKK...BKK is still growing fast. It seems like there is rotation of foreigners ready to come in and buy....usually it seems cheap to them. Now it's China, before it was Russia, before that Euros, and always some Americans...maybe the Indians will be next. I don't people are making nearly as much buying off plan as they were, and personally I would/am looking at locations with older buildings with good bones. The premiums people are willing to pay for new builds defies logic.

[impartialobserver]

Ironically, part of the problem I think with the Thai housing market is that it doesn't have things like toxic CDOs that kick-start a larger crash. This probably means the decline will happen in slow motion and be less dramatic--possibly driven by a bigger event like a decline in demand from foreigners. Part of the problem is that foreign demand for Thai real estate is really diverse (Europeans, Americans, Chinese, Aussies), so if one region has a major problem but others don't, the decline in demand won't suffice to hurt the market as a whole.

If you want to look at a market that was severely shocked by a decline in foreign demand, look at Macau gaming or Hong Kong housing. The crackdown on corruption in China destroyed both--but Bangkok didn't feel anything. Same thing in Malaysia.

Likewise, there isn't enough leverage on the Thai housing market to make it blow up in the spectacular way that America's did. You just don't have 100-1 bets on the market. Funnily enough, the unsophistication of Thailand's financial system may actually be saving it.

Since derivatives and demand won't kickstart the crash, we're really left with a supply-driven crash. A glut of supply causing price growth to slow and reverse. The problem is it seems like we already have a supply glut--plenty of empty units and unsellable properties around.

[Thian]

There will be plenty of new condo's soon, and not in the old downtown but in the new downtown, along the new bts-lines and the chao praya river.

[blackcab]

The forecast is for 10,000 downtown and 60-70,000 midtown/suburban condos to be completed in Bangkok this year.

2016 is a slightly unusual year as some condo projects were delayed from 2015, meaning a greater supply coming online than previous years.

Developers have recognised the oversupply of condo units in Bangkok and they have been focusing on selling off their unsold units (well the sensible ones have).

The problem developers have is that they are thinking ahead several years, so it is not always easy to quickly change direction and maintain profitability.

The units will get sold, even if it means delaying new projects a little longer to clear out old stock.