Knight Frank warns investors on Bangkok condo market

[rooster59]

Knight Frank warns investors on Bangkok condo market

By THE NATION

 

INVESTORS must watch the residential-condominium market in Bangkok cautiously amid expectations that the country’s gross domestic product will grow by 3.4 per cent this year, according to Knight Frank Thailand.

 

Purchasing power remains subdued, and the income levels of those in new segments of demand are not high enough. Household debt continues to be high, and banks remain stringent on releasing credit, with a high volume of loan rejections, especially when it concerns budget condos outside Bangkok. 

 

The budget-condo market in the outskirts of Bangkok still has a high level of risk due to weakening market conditions. There is also a high supply remaining in the market, especially along the suburban train lines. 

 

Full story: http://www.nationmultimedia.com/news/business/property/30303619

 

 

 

-- © Copyright The Nation 2017-01-07

[ezzra]

Tell us something we don't know, I have great difficulties in earth selling or renting

my properties that are considered to be in good location and well priced,

yet, they continue to build new condos everywhere and people are buying them

as the banks now days give you only 1% to 1.5% interests on your money and

by the time you factor inflation your money is earning nothing per annum....

[DNPBC0]

Interestingly, the article fails to mention the likelihood of much of Bangkok being underwater by 2030 due to land subsidence and sea-level rise.

[chiang mai]

If you were to only just read the article you'd see that the general trend is actually quite bullish, it's just that some areas are overbuilt.

[jpinx]

41 minutes ago, ezzra said:

Tell us something we don't know, I have great difficulties in earth selling or renting

my properties that are considered to be in good location and well priced,

yet, they continue to build new condos everywhere and people are buying them

as the banks now days give you only 1% to 1.5% interests on your money and

by the time you factor inflation your money is earning nothing per annum....

Where are yours?

[KhaoNiaw]

19 minutes ago, DNPBC0 said:

Interestingly, the article fails to mention the likelihood of much of Bangkok being underwater by 2030 due to land subsidence and sea-level rise.

 

It keeps getting postponed though. The first time I heard that in the 1980s, I think the city was due to be inundated by 2000. Every few years the story comes up again and it's been pushed back by another decade.

[Pinot]

Think Bangkok condos have problems. Phuket real estate market is infinitely worse but they keep on building. 

[yellowboat]

3 hours ago, ezzra said:

Tell us something we don't know, I have great difficulties in earth selling or renting

my properties that are considered to be in good location and well priced,

yet, they continue to build new condos everywhere and people are buying them

as the banks now days give you only 1% to 1.5% interests on your money and

by the time you factor inflation your money is earning nothing per annum....

The market is weak as per your and other people's comments.  It has been so for more than a couple of years.  Knight Frank is just getting wind of this now ?  These financial information services can be either way off or way too late with their insights. 

[SaintLouisBlues]

5 minutes ago, yellowboat said:

Knight Frank is just getting wind of this now ?  These financial information services can be either way off or way too late with their insights. 

Isn't Knight Frank a specialist real estate consultancy?

[bkkcanuck8]

3 minutes ago, SaintLouisBlues said:

Isn't Knight Frank a specialist real estate consultancy?

 

Exactly, not some organization that would ever want to let on anything but the rosiest of pictures for the market

[chiang mai]

Knight Frank is a British global real estate agent, they are different things in different countries, in Thailand they operate commercial and retail sales hence they are no more inclined to present a false picture of any market than anyone else. FWIW their professional reputation in the UK is very strong hence their analysis is generally worth considering along side of analysis from other sources. And if anyone has actually bothered to read the article they will note they do not slam the market, they simply say that existing and popular areas are prone to risk whilst other areas offer opportunities, pretty much the same sort of picture you would expect any large real estate consultancy to present about any buoyant or reasonably so market globally in current economic times..

[Mickmouse1]

I thought the market is saturated and supply is greater than demand,though many more huge condos are being built.The market is due for a Big correction soon.

?

[Srikcir]

4 hours ago, rooster59 said:

the country’s gross domestic product will grow by 3.4 per cent this year

The government says 4% - buy, buy, buy

[SaintLouisBlues]

56 minutes ago, bkkcanuck8 said:

Exactly, not some organization that would ever want to let on anything but the rosiest of pictures for the market

So, not a "financial information service" as stated by the poster to whom I was replying

[bkkcanuck8]

3 minutes ago, SaintLouisBlues said:

So, not a "financial information service" as stated by the poster to whom I was replying

 

They can be both -- in the same way a brokerage can be the source of financial information (consultancy) but also be involved in transactions and commissions etc.  The same thing can easily happen, whether on purpose or not... when you are dealing with a company or brokerage as the source of your financial research and your account management.   Research can easily get skewed because of internal conflicts.   If your research "unnecessarily" offends a big customer by by being "unnessarily" bearish on that companies prospects and thus tells other customers that you are not a good investment.... which causes a loss of significant business....  you know it is not going to be the best political move.  This is why often brokerage research downgrades usually happens after you have already lost your shirt.

[mike324]

There are simply too many speculative investors and those they are trying to profit from the condo boom by buying and selling their title before construction finishes to profit. There is indeed a large oversupply of low grade 1-2 bedroom condos all over the country.

[ourmanflint]

In any other economy, this would lead to consistent price drops across the board for buyers, but I have been watching property around Bangkok for 3 years or so and it shows no sign of doing anything but going up. It doesn't make sense at all.

[SaintLouisBlues]

2 minutes ago, ourmanflint said:

In any other economy, this would lead to consistent price drops across the board for buyers, but I have been watching property around Bangkok for 3 years or so and it shows no sign of doing anything but going up. It doesn't make sense at all.

I think it's the same as China - owning property in and of itself is a status symbol so there is no reason to sell or to drop asking prices

[chiang mai]

21 minutes ago, bkkcanuck8 said:

 

They can be both -- in the same way a brokerage can be the source of financial information (consultancy) but also be involved in transactions and commissions etc.  The same thing can easily happen, whether on purpose or not... when you are dealing with a company or brokerage as the source of your financial research and your account management.   Research can easily get skewed because of internal conflicts.   If your research "unnecessarily" offends a big customer by by being "unnessarily" bearish on that companies prospects and thus tells other customers that you are not a good investment.... which causes a loss of significant business....  you know it is not going to be the best political move.  This is why often brokerage research downgrades usually happens after you have already lost your shirt.

 

No they are not both, KF is a global real estate company that offers real estate related services, they are not a financial information consultancy - Dow Jones is a FIS co.

 

http://www.knightfrank.co.th/property-services

[williamgeorgeallen]

3 hours ago, Pinot said:

Think Bangkok condos have problems. Phuket real estate market is infinitely worse but they keep on building. 

pattaya is pretty bad as well. still building like crazy. many friends have paid for their condos only to find out the banks hold the title.

 

[elgordo38]

7 hours ago, ezzra said:

Tell us something we don't know, I have great difficulties in earth selling or renting

my properties that are considered to be in good location and well priced,

yet, they continue to build new condos everywhere and people are buying them

as the banks now days give you only 1% to 1.5% interests on your money and

by the time you factor inflation your money is earning nothing per annum....

Sorry to hear that ezzra beggars beyond belief the line the government is spewing of 4% growth. Thai's hate to buy things that are used they want it brand spanking new. They gaze with champagne appetites with a beer income. Its rare to get a small nugget of truth from the mountain of BS in the press here. I hope things improve for you. 

[bkkcanuck8]

3 hours ago, williamgeorgeallen said:

pattaya is pretty bad as well. still building like crazy. many friends have paid for their condos only to find out the banks hold the title.

 

Did they not hire a lawyer?  I would expect a similar process here where you hire a lawyer, and the law firm does a title search and puts the money in escrow etc.

[bkkcanuck8]

3 hours ago, chiang mai said:

 

No they are not both, KF is a global real estate company that offers real estate related services, they are not a financial information consultancy - Dow Jones is a FIS co.

 

http://www.knightfrank.co.th/property-services

I read the details.... they have investors as customers and the have and do market research etc.   I see no difference between doing "research" for a blue chip stock or do "research" for real estate investors.... both are financial in nature.

[AlexRRR]

Its not true Thais want to buy new rather than old same in the west fellas they will buy on location or what they can afford.

 

Secondly Its been reported in AU that the apartment market is about to crash here for a few reasons....not gonna happen, used apartments say within 3 to 5 ys of completion normaly will sell below original cost because you paid to much for it to begin with, developers set the price not the market.

 

Its highly doubtful the condo market will crash there as well. developers are not stupid they dont out lay trucks of money for something that they cant sell, there is a break even point and a cashed up developer can sit on a % of condos....this is normal.

[trogers]

9 hours ago, jpinx said:

Where are yours?

 

9 hours ago, ezzra said:

Tell us something we don't know, I have great difficulties in earth selling or renting

my properties that are considered to be in good location and well priced,

yet, they continue to build new condos everywhere and people are buying them

as the banks now days give you only 1% to 1.5% interests on your money and

by the time you factor inflation your money is earning nothing per annum....

 

Depends on a few factors:

 

Location, price acquired, type of room unit and size of competition. 

[BsBs]

9 hours ago, DNPBC0 said:

Interestingly, the article fails to mention the likelihood of much of Bangkok being underwater by 2030 due to land subsidence and sea-level rise.

 

 

They always forget to mention it because it's obvious !

The reason why I won't buy new properties in Bkk anymore unlike so many stupid people who do not seem to have internet...

 

 

 

 

[zorro1]

Funny thread. Australia has these warnings in capitol

[williamgeorgeallen]

5 hours ago, bkkcanuck8 said:

Did they not hire a lawyer?  I would expect a similar process here where you hire a lawyer, and the law firm does a title search and puts the money in escrow etc.

the projects almost always get completed 2 years late by which time the buyer has paid 80% of the purchase price in progress payments. the developer then says the condo is ready but the title wont be ready for another 6 months so they pay the rest, i know people who have been waiting for years and i am fairly sure their titles are being held by the bank. no one i spoke to has used a lawyer.  is hard to believe. i put 30% deposit down on one, wont pay any more till i get a title. condo is finished but no title in sight. i wont buy off  plan ever again.

[bkkcanuck8]

23 minutes ago, williamgeorgeallen said:

the projects almost always get completed 2 years late by which time the buyer has paid 80% of the purchase price in progress payments. the developer then says the condo is ready but the title wont be ready for another 6 months so they pay the rest, i know people who have been waiting for years and i am fairly sure their titles are being held by the bank. no one i spoke to has used a lawyer.  is hard to believe. i put 30% deposit down on one, wont pay any more till i get a title. condo is finished but no title in sight. i wont buy off  plan ever again.

 

That is wise not to pay the rest.  What should happen is if the building is ready to move in but the title cannot be transferred until later that the occupant pays "rent" (i.e. which get applied against the price) then pays the balance on title transfer.

[williamgeorgeallen]

1 hour ago, bkkcanuck8 said:

 

That is wise not to pay the rest.  What should happen is if the building is ready to move in but the title cannot be transferred until later that the occupant pays "rent" (i.e. which get applied against the price) then pays the balance on title transfer.

i now of one development with dozens of people living in there units who have been waiting 2.5 years still waiting for titles after paying the full ballance. i am in their facebook group. i asked what their lawyers said and none of them had even gone to see a lawyer. hard to believe. we will see a lot of people finding out their unit titles are being held by banks as the sales companies go bust. i wish i never bought anything in thailand and i have probably been more lucky than most as i only put down a 30% deposit.