Overpriced real estate

[blackcab]

You can call a development what you want. I can call a cheap apartment block a Condominium if I want, but that doesn't make it so. 

 

To be classed as a Condominium under the Condominium Act 2008 there is a series of steps to be completed, including handing in the Chanote(s) to the Land Office, all the way to having the details of the new Condominium printed in the Gazette. 

 

In essence, however, it's really simple. If you get a chanote and blue book for your unit it's a Condominium. If you get a Lease or contract the chances are it's not a Condominium. 

[theguyfromanotherforum]

11 hours ago, ExpatOilWorker said:

 

 

Honest question, if you distaste Bangkok so much, why did you start this thread and even remotely considered buy a condo in our lovely city?

 

Nope. I don't dislike Bangkok at all. It has many charms Canada lacks and personally I find it Amazing.

 

However, that doesn't make me a sucker for paying overpriced real estate at 200k per square meter on a condo that will be in ruins in 10 years time. The same amount of money can be spent elsewhere. This is strictly a money issue, not me hating on Bangkok or Thailand.

[MJP]

21 hours ago, theguyfromanotherforum said:

 

Why do I need to make a point? Someone stated there are 300k units being sold and I just gave an example. 

 

But if you really need a point, then I would say that 300k grossly overpriced in a city that is dirty and has a 3rd world infrastructure.

 

Also, it is irrelevant if you don't want to live in Toronto. Neither do I, however, many third and first world citizens do. I could also make a point  that in Toronto there are real market forces at work unlike in Bangkok where prices are inflated by developers and other mysterious entities.  Point. My wife is looking to upgrade her house. There is a really cheap one in her soi (in Bangkok) going for a mere 3.5 million baht. Probably under-priced by at least a million due to the size of the house and land. House on the market for 6 months because even if there is a little bit of interest people are unable to get a loan.

 

Prices in Bangkok all over the place and that is the scary part.

 

 

 

Discounted by 1mil due to ghost.

[smutcakes]

2 hours ago, theguyfromanotherforum said:

 

Nope. I don't dislike Bangkok at all. It has many charms Canada lacks and personally I find it Amazing.

 

However, that doesn't make me a sucker for paying overpriced real estate at 200k per square meter on a condo that will be in ruins in 10 years time. The same amount of money can be spent elsewhere. This is strictly a money issue, not me hating on Bangkok or Thailand.

 

So you find it amazing, it has many charms Canada lacks, but yet you cannot see why prices are what they are......how about because other people also see those charms and find it an amazing place and want to live here ? Demand and supply and all that. Surely the market dictates the price, if they are selling at a certain level, that is what they are worth as they are selling for that?

Some Condos in BKK  are 25 years old and still sell at well over 100K, so it proves that build standards and maintenance are there when desired.

[returnofthailand]

the pictures of Toronto here above are simply boring.
no way to buy cheap Thai food or get a beer at 7 11.
you must be very bored in Canada.

[lkn]

9 hours ago, theguyfromanotherforum said:

However, that doesn't make me a sucker for paying overpriced real estate at 200k per square meter on a condo that will be in ruins in 10 years time. The same amount of money can be spent elsewhere. This is strictly a money issue, not me hating on Bangkok or Thailand.

 

Who would have guessed? Except anyone who have read any of your posts where you repeatedly keep criticizing Bangkok and telling us all about how much “investor” demand there is in Toronto and how cheap the real estate is over there.

 

Thing is, no-one cares about Toronto, and no-one cares that you are being priced out of the market.

 

But it is getting annoying to listen to your groundless whining about high prices.

 

If you want to make an argument for high prices, do it based on facts, like look at material costs, average salaries, demand for land, and compare with other Asian metropolis, etc.

 

Are you predicting a crash in the near future? If not, then prices would not appear to be “too high”.

 

And for not being a sucker, buying real estate: If you stay here long-term and rent, you’re probably ending up paying more, since the owner would want to make a profit on their real estate.

 

Sure, you can rent for 5,000 baht/month, but you can also buy for 20,000 baht/sqm. if you lower your standards.

[theguyfromanotherforum]

Hilarious. Another one who thinks I am a renter just because I fail to see fair value in Bangkok. Is there anything else you would like to tell me about myself?

 

I live in a townhouse for free. I am looking for an investment. Something I can rent and hopefully appreciate more than 1% annually that my Canadian bank is paying me to  stash the cash. I am not looking for a place to live. I already have that. 

 

To be perfectly honest, I would be already buying in Canada, the only problem is as a non resident I have to pay 25% tax on property. So, that option is not good for me at this point in time. Like I said, I could care less if I get blasted for stupidity or taught a lesson. You have added nothing of value in your comment. The only ones with some useful information on this thread are trogers and oilexpat.

 

 

 

 

 

 

 

[lkn]

2 hours ago, theguyfromanotherforum said:

I am looking for an investment.

 

So you want to place money in a condo and make a decent profit? Your inability to find such condo in Bangkok does not mean that things are overpriced, as your thread title implies. It just means that the market is not underpriced.

 

It would be natural that any newly built condo is priced at exactly what the market can bear, and thus is not really investment material,, even though many of them try to target (ameteur) investors and claim 6% ROI etc.

 

If you want to invest, you need to look at older buildings, and possibly buildings that need to be fixed up, after all, you get nothing for nothing, contributing with cash is not of much value in a low interest environment.

[samtam]

Whilst I have sympathy for the OP's inability to understand the huge gap between new and older properties, the response given by lkn makes a great deal of sense. Whether the differential of THB60k versus THB300k (+400%) is justified is a moot point. Personally I think that is too wide; either older properties need to rise in price, or newer ones need to fall.

On 23/08/2016 at 2:31 AM, lkn said:

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.

 

As worldchild has said, there is a quick and dirty way of calculating the "true" value of properties, as below. But unfortunately, until there is general public access to property transaction prices*, no proper analysis of the Bangkok property market can be made, and even the papers on the subject produced by respected property companies, such as CBRE are meaningless without this vital statistic. (*As I understand it, this information is strictly private.)

On 24/08/2016 at 3:53 PM, wordchild said:

an interesting way of considering the value of a freehold condo is to work out what the underlying land value is psm and what percentage that would be of the sale price. ie try to get a reasonable estimate of the  current market value of land in the area you are interested in, (CBRE will help if you ask nicely) work out the land area of the condo  and then you can estimate  the value of the land the condo sits on and which all the owners have a share in.  Then divide that by the total sqm of all the condo units in the condo. You can then derive what % of the condo asking price reflects the underlying value of the land. This is not by any means an exact science because of issues such as build restrictions but it is an interesting reality check.

I have done this in the past, when looking to buy, and it does also throw up some interesting results eg it clearly makes new highrise condos esp further out from central Bangkok past say Ekhami look expensive, ie the land value psm is a small percentage of the asking price.  And because older condos in central BKK, eg in the Ploenchit  area have not appreciated at anything like the price of land in that area, it makes some of these, in particular the low rise, low density projects look very good value.ie the value of the land on which the condo sits is a very high percentage of the condo value. In fact when I last  looked at this a couple of years ago I estimated that for a couple of centrally located condos the underlying land value was pretty close to 100% of the (then) asking prices for those condos.    

  

 

 

[trogers]

17 hours ago, samtam said:

Whilst I have sympathy for the OP's inability to understand the huge gap between new and older properties, the response given by lkn makes a great deal of sense. Whether the differential of THB60k versus THB300k (+400%) is justified is a moot point. Personally I think that is too wide; either older properties need to rise in price, or newer ones need to fall.

 

As worldchild has said, there is a quick and dirty way of calculating the "true" value of properties, as below. But unfortunately, until there is general public access to property transaction prices*, no proper analysis of the Bangkok property market can be made, and even the papers on the subject produced by respected property companies, such as CBRE are meaningless without this vital statistic. (*As I understand it, this information is strictly private.)

 

 

The large gap in price between old and new even along the same street is caused by the lax financing terms by banks for new vs the strict terms for old.

 

But I look at this phenomenon as a Boon for any cash rich investor. That's where you can get double the yield against those new ones.

[tomwct]

When a Thai gives you a price for land or house, make an offer 30% less and then start to negotiate. You'll end up with a 20-25 reduction!

Of course, you also need to do research on sales in the area! Don't buy anything your not prepared to walk away from it except maybe a condo!