Overpriced real estate

[theguyfromanotherforum]

I keep reading from some delusional posters that 200k per square meter in Bangkok is a new normal. 

 

Yes, I have seen some condos being sold at that price point before like Lumpini 24 and Noble (awful building, BTW).

 

The other day I stayed at Courtyard Marriott which is on  Ratchadamri Rd close to Lumpini Park (poor value for money). Anyway, I notice the building across the hotel which looks like an older condo building, but still nice and definitely a solid construction. Not dirty and not moldy like some buildings on Asoke. I google the building and sure enough, condos for sale at 60k per square meter.  Prime location, very clean. Landscaping around taken care of. Really solid build with nice big balconies unlike the crap being built today that won't last 10 years. I took a few pictures of the building, so you can see for yourself that it looks pretty decent. Then I did some more research and sure enough older condos (10 year plus) that don't carry a fancy names like "The Address", "Rhythm", "Noble" and other pretentious nonsense are being sold for 60-90k all in prime locations. Then  I checked "The River" and saw prices starting to collapse even there. 

 

I think you really need to have your head examined if you are willing to pay 200k per square meter in Bangkok in one of them ghetto shoeboxes.

 

 

 

 

 

 

 

 

[trogers]

Price of Bt60k per sqm at Ratchadamri are for properties with half or less lease years left out of the original 30-year leasehold.

[theguyfromanotherforum]

Just checked this particular building and you are right and I'm stupid. However, these leasehold buildings seem to be much better maintained than a lot of 10 year old condos I have seen. The above building was erected in 1998.

[smutcakes]

9 minutes ago, theguyfromanotherforum said:

Just checked this particular building and you are right and I'm stupid. However, these leasehold buildings seem to be much better maintained than a lot of 10 year old condos I have seen. The above building was erected in 1998.

 

So you were wrong in your first point, so you try another angle.

 

How were the lifts, the water pumps, fire pumps, transformer, MDB etc. Did you manage to deduce that all from the outside? Perhaps you can give a couple more throw away comments?

 

[theguyfromanotherforum]

I am sure all the things you mentioned is just first class craftmanship in a freehold condo.

 

What angle am I trying here?

 

The building looks awesome for it's age and that is a fact.

 

 

[mcfish]

Bangkok prices have gone through the stratosphere. I think the new one going up across from Nana bts will be easy 250 plus

Glad I bought mine 12 years ago in a well maintained building near Nana bts for 65k no lease limit.

I truly feel sorry for the renters still waiting for the baht to implode and the bubble to burst.. They missed the boat big time in Bangkok at least

OH well there is always Myanmar I guess but I hear the horse has already bolted there as well

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[guzzi850m2]

2 hours ago, trogers said:

Price of Bt60k per sqm at Ratchadamri are for properties with half or less lease years left out of the original 30-year leasehold.

So are you saying that those condo's are build on leased land?

So what happens to the condo owners when the lease runs out?

[smutcakes]

1 minute ago, guzzi850m2 said:

So are you saying that those condo's are build on leased land?

So what happens to the condo owners when the lease runs out?

 

By definition a condo cannot be built on leasehold land.

Trogers was saying that the price is low compared to Condo's as they are freehold, so not on leased land, and the example the OP gave was a leasehold apartment with limited time length left on the head lease, which is reflected by the asking price. So you are comparing apples with oranges.

[mcfish]

So OP Im guessing the "delusional poster" in your first sentence is now you right?

Always always practice due diligence no matter how excited you get about starting a thread especially if it's investment related because you will get ripped to shreads here.. ..


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[theguyfromanotherforum]

1 hour ago, mcfish said:

So OP Im guessing the "delusional poster" in your first sentence is now you right?

Always always practice due diligence no matter how excited you get about starting a thread especially if it's investment related because you will get ripped to shreads here.. ..


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I don't mind getting shred to pieces if I learn something. As a matter of fact I could care less about my online reputation as long as in real life I don't lose money. 

 

Is Baan Sathorn Chaopraya also a leasehold?

 

Prices are between 60 to 90k per square meter also.

 

I am not sure 200k per square meter condos have a good resale value at this point in Bangkok. As a matter of fact I am convinced it is money down the drain.

 

I am not a renter here or in Canada. 

 

 

Edited August 22, 2016 by theguyfromanotherforum

[trogers]

2 hours ago, guzzi850m2 said:

So are you saying that those condo's are build on leased land?

So what happens to the condo owners when the lease runs out?

 

It would be the interest of the developer or land owner to maintain the apartment by collecting substantial maintenance fees from the leaseholders.

 

At the end of the original lease, the building could be refurbished with minimal cost and new 30-year leases sold.

 

The apartment building and the land it sits on has one owner. It is thus not a condo.

[ExpatOilWorker]

Royal Place 1 is of course leasehold, but you can get this unit at the 24th floor with a view of Royal Sport club for less than 60K/m2.

PM me if you want to see the unit, I have the key.

 

http://bangkokhomecondo.com/properties/cbd-condo-for-sale-1bed-regent-royal-place-1-2451003-super-cheap

[theguyfromanotherforum]

2 minutes ago, ExpatOilWorker said:

Royal Place 1 is of course leasehold, but you can get this unit at the 24th floor with a view of Royal Sport club for less than 60K/m2.

PM me if you want to see the unit, I have the key.

 

http://bangkokhomecondo.com/properties/cbd-condo-for-sale-1bed-regent-royal-place-1-2451003-super-cheap

 

Yes, I have seen this unit posted on several web sites. Very nice. I am actually seriously debating with my wife if we should make an offer or not.

[ExpatOilWorker]

2 hours ago, smutcakes said:

 

So you were wrong in your first point, so you try another angle.

 

How were the lifts, the water pumps, fire pumps, transformer, MDB etc. Did you manage to deduce that all from the outside? Perhaps you can give a couple more throw away comments?

 

 

The OP is actually correct in his observation. The building is very well maintained and have just recently been painted both on the inside and outside. All 6 lifts are in great conditions.

[ExpatOilWorker]

1 minute ago, theguyfromanotherforum said:

 

Yes, I have seen this unit posted on several web sites. Very nice. I am actually seriously debating with my wife if we should make an offer or not.

 

If you are still at the Courtyard, come over and have a look.

I am not the owner, but I do have a key for that unit.

[theguyfromanotherforum]

No. I checked out yesterday. Let me have a talk with her and maybe we can arrange a viewing.

[ExpatOilWorker]

2 hours ago, guzzi850m2 said:

So are you saying that those condo's are build on leased land?

So what happens to the condo owners when the lease runs out?

 

Now, this is a tricky question and nobody have a definitive answer.

The land belongs to Crown Property and each co-owner pays 10 baht/m2/month  to Crown Property, so it is in everybody's best interest to keep this going for as long as possible. Most likely the lease will be extended beyond the original 30 years, but there is no guarantee.

The Grand, Royal Place 1+2 all expire at the same time and I doubt they will kick 1,200, mostly rich Thais, on the street. Anyway, this is just my 2 cents.

[trogers]

14 minutes ago, ExpatOilWorker said:

 

Now, this is a tricky question and nobody have a definitive answer.

The land belongs to Crown Property and each co-owner pays 10 baht/m2/month  to Crown Property, so it is in everybody's best interest to keep this going for as long as possible. Most likely the lease will be extended beyond the original 30 years, but there is no guarantee.

The Grand, Royal Place 1+2 all expire at the same time and I doubt they will kick 1,200, mostly rich Thais, on the street. Anyway, this is just my 2 cents.

 

Unlike in the UK, which Hong Kong also adopted, there is no automatic extention on the lease of the land. Your only guide is what happened to Central Lardprao when their 30-year lease expired in 2010.

Edited August 22, 2016 by trogers
correcting spelling

[theguyfromanotherforum]

What happened. Why the mystery?

[trogers]

Central group negotiated a new 30-year lease on the land subjected to substantial upfront and monthly monetary payments.

 

Google for it.

[mcfish]

 

Yes, I have seen this unit posted on several web sites. Very nice. I am actually seriously debating with my wife if we should make an offer or not.

I would not touch this until you fully understand what the pitfalls of leasehold are and you clearly don't.

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[returnofthailand]

only buy if you really love it. if not rent.

so many Condo all around. in Pattaya I see now prices going slightly down. a condo at 700k now sell for 600k.

[lkn]

In addition to freehold/leasehold the materials also affect the price.

 

I know some think that all Thai condos are just concrete blocks, but windows are not just windows (double/triple glazed), floors are not just floors (tiles, engineered wood, real wood), kitchens are not just kitchens (IKEA or a kitchen design shop in Thonglor with big induction stove instead of two small electrical rings), cabling is not just cabling (enough conduits in the walls so you have power/internet near whatever appliance need it), air condition is not just air condition (silent and hidden above the ceiling or just mounted on the wall), a bathroom is not just a bathroom (wall mounted toilets, head shower coming down from the ceiling, nicely designed fixtures, water heater that has enough power to provide warm water at a constant temperature and which is not split between the sink so when your partner washes their hands, you get a cold shower), etc.

 

Some of the things being built are definitely worth more than 60k per sqm. in materials alone then you have the cost of the land, labour, and the developer’s profit.

[smutcakes]

7 hours ago, ExpatOilWorker said:

 

Now, this is a tricky question and nobody have a definitive answer.

The land belongs to Crown Property and each co-owner pays 10 baht/m2/month  to Crown Property, so it is in everybody's best interest to keep this going for as long as possible. Most likely the lease will be extended beyond the original 30 years, but there is no guarantee.

The Grand, Royal Place 1+2 all expire at the same time and I doubt they will kick 1,200, mostly rich Thais, on the street. Anyway, this is just my 2 cents.

 

I expect you will need to pay close to full condo price for buying a new 30 year lease contract. Just look at the prices of St.Regis which is leasehold, they were not that far below 185 Rajdamri which is condominium.

 

A couple of things you can be sure. As soon as you pay for a new lease the value of your unit will start depreciating again, and secondly the CPB are not in the business of providing social housing on prime real estate land, so people need to be prepared to pay heavily to renew.

[smutcakes]

7 hours ago, theguyfromanotherforum said:

 

I don't mind getting shred to pieces if I learn something. As a matter of fact I could care less about my online reputation as long as in real life I don't lose money. 

 

Is Baan Sathorn Chaopraya also a leasehold?

 

Prices are between 60 to 90k per square meter also.

 

I am not sure 200k per square meter condos have a good resale value at this point in Bangkok. As a matter of fact I am convinced it is money down the drain.

 

I am not a renter here or in Canada. 

 

 

 

You are convinced its money down the drain yet you are seriously considering buying a leasehold interest which is a depreciating asset?

 

There are plenty of condos which have gone way up in value. The Millenium and the Park Chidlom to name just 2. The Park Chidlom was originally sold at 100k per sqm. Now they sell at 225k per sqm. I suppose thats money down the drain?

[HerbalEd]

2 hours ago, smutcakes said:

 

You are convinced its money down the drain yet you are seriously considering buying a leasehold interest which is a depreciating asset?

 

There are plenty of condos which have gone way up in value. The Millenium and the Park Chidlom to name just 2. The Park Chidlom was originally sold at 100k per sqm. Now they sell at 225k per sqm. I suppose thats money down the drain?

Could be. With real estate you never know until you have the buyer's money in hand. 

[smutcakes]

15 minutes ago, HerbalEd said:

Could be. With real estate you never know until you have the buyer's money in hand. 

 

Well there is hard evidence of transactions being completed at that level, so i would presume the seller would not go ahead unless they have the buyers money in their hand.

[theguyfromanotherforum]

3 hours ago, smutcakes said:

 

You are convinced its money down the drain yet you are seriously considering buying a leasehold interest which is a depreciating asset?

 

There are plenty of condos which have gone way up in value. The Millenium and the Park Chidlom to name just 2. The Park Chidlom was originally sold at 100k per sqm. Now they sell at 225k per sqm. I suppose thats money down the drain?

 

I am just trying to make a best decision for myself.

 

The 2 examples you gave above are nowhere near 225k per square meter, especially Millennium Residences which is indeed a nice project.

 

What I am trying to understand is if the leasehold is so bad then why wouldn't there be more units for sale in the above buildings I mentioned. As a matter of fact, there are far less units for sale offered than in other "freehold" projects where there are literally hundreds of units for sale by owners who obviously can't unload them fast enough.

[smutcakes]

15 minutes ago, theguyfromanotherforum said:

 

I am just trying to make a best decision for myself.

 

The 2 examples you gave above are nowhere near 225k per square meter, especially Millennium Residences which is indeed a nice project.

 

What I am trying to understand is if the leasehold is so bad then why wouldn't there be more units for sale in the above buildings I mentioned. As a matter of fact, there are far less units for sale offered than in other "freehold" projects where there are literally hundreds of units for sale by owners who obviously can't unload them fast enough.

 

The Park Chidlom is selling at that level, i know this for an undisputable fact and if you dont believe me, i know you are once again wrong. Millenium is not selling at that level, but it has also seen a similar increase in value from when it was launched.

 

I dont think anyone has ever said 'leasehold' is bad. There are pros and cons of both leasehold and condominium ownership. You stated that anyone paying 200K per sqm needs their head examining, and then went on to compare the price per sqm of a leasehold property with 10 years remaining on the lease, which is not in anyway comparable to freehold condominium ownership.

 

The reason there are probably far more condos for sale is that there is a huge amount of supply of them, whereas there is limited supply of new apartments in comparison. In addition many people bought condos and tried to flip them or rent them out and never had the intention of living in them.

[Peterw42]

Any argument or speculation using the "asking price" is absolute rubbish. I can list my 5 million baht condo for 10 million, it doesnt mean its worth 10 million or will sell for 10 million. 200k a sqm probably is the new normal for stupid asking price. Unless you are at the land office monitoring every sale, no idea what something sold for. 

I know blocks in Pattaya were the list/asking price is 2 million. You can look at real estate sites, talk to owners, talk to condo manager, and come to the conclusion the price is 2 million. Reality is, the only sales in the block in the last 6 months are for 1 million.