Purchasing Condo -- Appreciate Advice

[zorro1]

 
I think you are right. Prices are falling, this unit is advertised for 3.5 million: 
 

Dude brush up on due diligence for Christ's sake! Very sloppy
.. Read the fine print

[Lovethailandelite]

4 minutes ago, elgordo38 said:

I will try and digest what your referring to. Never heard of tagalong.  I will try and analyse this comment  Where is he living, Southend on sea? It cannot be Thailand. He hates Thais. but it really doesn't make sense except to you and well thats all that matters. 

If you read the quoted post, tagalong won't live in a Condo or house with Thai neighbors. As this is Thailand I would of thought it was quite difficult to avoid Thai people. Hence it must be difficult for him to be living in Thailand.

[sanuk711]

4 minutes ago, Lovethailandelite said:

Where is he living, Southend on sea?

Wow that brings back some memories...I was brought up there-- behind the gas works, near the kursaal... of course that was in the 40s-50s-.....there might have been a slight change since then.

[Lovethailandelite]

Just now, sanuk711 said:

Wow that brings back some memories...I was brought up there-- behind the gas works, near the kursaal... of course that was in the 40s-50s-.....there might have been a slight change since then.

Gas works are long gone along with the Jetty opposite. There are now flats on the old Gas works site.They have to of been there 15 years. Most of the Kursaal gone too. That has been a housing estate for over 20 years. The front entrance has been preserved though.

[mcfish]

From soi 2 to soi 33 Sukhumvit and far beyond as others have mentioned there is no more development land available.
This means developers will need to door knock and guess who owns the land along there? Thai Chinese and Indians!

Sent from my Redmi Note 3 using Tapatalk

[sanuk711]

Progress huh..... went to look on Google---could only see some that were in Eastwood, but a bit like we had in our back garden, they were on wheels at the sides, & when they filled them up you didn't get any daylight ...but the council compensated you by reducing the rent by 19 pence....

Anyway lets get back to these 10 million Baht condo's in BKK.

 

Go ahead & buy mate---some people on here live their lives like they have another one in the bank.....

 

 

[Uncle Bob]

R.E.N.T.

[JayBird]

I appreciate all the valuable feedback here.  Let me supply a few points of information:

 

1) I'm still interested in Purchasing vs. Renting.  Yes, I could easily invest the money and generate income sufficient to cover rent (therefore keeping the principal intact).  However, I already do this with other assets.  So purchasing in lieu of rent is a way for me to diversify my holdings and guarantee some additional protection from currency exchange risks or long term black swan events (which could occur as this is a holding I plan to keep for at least 10 years).

 

2) Yes, the market prices in Bangkok do seem to be on the high end.  I've done some digging around (and confirmed with some Thai people including condo owners):

 

-- A lot of Thai people are buying condos on speculation.

-- A lot are buying to rent (and buying via mortgage rather than cash)

-- It seems to be quite a severe problem (to the point that when I asked this they were surprised I had known.  Almost as if its a legitimate national pride issue).

 

This has a similar feel to the property bubble crash in the US... which I witnessed first hand but was fortunately not owning so I was unaffected (but many friends ended up deep underwater).

 

After additional leg work and time on the ground I discovered that the bulk of the properties that look good on paper are not as desirable in person (questionable location, doctored images of the building condition, etc.).  And when you start to find properties that look good AND are in a good location you face prices that I find questionable.

 

I use a simple measurement: If the price of a 40sqm condo in Bangkok is more than a 600sqft house in Las Vegas, something is amiss.

 

So I've now expanded my search beyond Bangkok into the Pattaya / Jomtien area.

 

(Sidenote: I do find it interesting how house/townhouse prices are cheaper than condo prices by far which is another red flag on true property value).

 

Thank you all again.

 

[elgordo38]

15 hours ago, 12DrinkMore said:

 

Friend of mine was driven to distraction by the scraping of chairs, thumps, thuds and assorted noises from the condo above, particularly at weekends when the whole Thai family came to stay.

I rent would never buy. I rent a condo and attest to the door slammers. Thailand is noise personified you will never escape it entirely. I have no dogs or roosters but motorbike hell exists outside my balcony window. Its an older building thus remodeling noise comes reaches a peak and then dies down and cycles.  Life is a trade off. The only true peace you will ever achieve is death. 

[Lovethailandelite]

1 hour ago, JayBird said:

I appreciate all the valuable feedback here.  Let me supply a few points of information:

 

1) I'm still interested in Purchasing vs. Renting.  Yes, I could easily invest the money and generate income sufficient to cover rent (therefore keeping the principal intact).  However, I already do this with other assets.  So purchasing in lieu of rent is a way for me to diversify my holdings and guarantee some additional protection from currency exchange risks or long term black swan events (which could occur as this is a holding I plan to keep for at least 10 years).

 

2) Yes, the market prices in Bangkok do seem to be on the high end.  I've done some digging around (and confirmed with some Thai people including condo owners):

 

-- A lot of Thai people are buying condos on speculation.

-- A lot are buying to rent (and buying via mortgage rather than cash)

-- It seems to be quite a severe problem (to the point that when I asked this they were surprised I had known.  Almost as if its a legitimate national pride issue).

 

This has a similar feel to the property bubble crash in the US... which I witnessed first hand but was fortunately not owning so I was unaffected (but many friends ended up deep underwater).

 

After additional leg work and time on the ground I discovered that the bulk of the properties that look good on paper are not as desirable in person (questionable location, doctored images of the building condition, etc.).  And when you start to find properties that look good AND are in a good location you face prices that I find questionable.

 

I use a simple measurement: If the price of a 40sqm condo in Bangkok is more than a 600sqft house in Las Vegas, something is amiss.

 

So I've now expanded my search beyond Bangkok into the Pattaya / Jomtien area.

 

(Sidenote: I do find it interesting how house/townhouse prices are cheaper than condo prices by far which is another red flag on true property value).

 

Thank you all again.

 

The difference between house and condo prices (Condos being more expensive) comes down to the market in land not being available for legitimate purchase by foreign investors. The difference is also very easy to see in the Condo sector where 2 exact condos exist in the same block where one is available on Foreign quota and one isn't. The one on foreign quota will,on average, be 25-40% more expensive.
Then you have Condo blocks where they are offered on Freehold and another block where they offered on Leasehold. Again, a vast difference in price. The Freehold option being possibly double the price. Unfortunately, unless you want to live in Sticksville, Thailand is not a particularly cheap place to live anymore, particularly downtown Bangkok where it is now very easy to find big condos over and way above £1 million Sterling. If your waiting for a price adjustment in prices I think you could in for a long wait. A break even point for developers appears to be 30% occupancy so they appear to be happy after this point to sit on there assets. If your now looking at Jontiem and Pattaya as another option then yes, you will find much cheaper property. There are lots and lots of 30sqm rooms for sale BUT if your looking at quality, with a view and over 60sqm, prepare again to maybe be shocked at the prices. Quality there still isn't cheap and quality sells quickly even if the pessimists try to tell you other wise. If you are going to head that way then take a look around Na Jontiem North of the Ambassador hotel and Ocean marina towards Ban Saray. There are some quality developments there but prices are rising quickly.
Good luck in your search. 

[KittenKong]

11 hours ago, ExpatOilWorker said:

I think you are right. Prices are falling, this unit is advertised for 3.5 million: 

 

I watched that video and all along I was wondering what was wrong with the property for it to be offered at that price.

 

Right at the end of the video you get the answer: leasehold to 2027. So really you are just paying 30kB/month rent for 10 years up-front.

[KittenKong]

13 minutes ago, Lovethailandelite said:

Quality there still isn't cheap and quality sells quickly even if the pessimists try to tell you other wise. If you are going to head that way then take a look around Na Jontiem North of the Ambassador hotel and Ocean marina towards Ban Saray. There are some quality developments there but prices are rising quickly.

 

I'm not aware of anywhere around there where prices are "rising quickly". "Static" seems closer to the mark.

[Lovethailandelite]

2 minutes ago, KittenKong said:

 

I watched that video and all along I was wondering what was wrong with the property for it to be offered at that price.

 

Right at the end of the video you get the answer: leasehold to 2027. So really you are just paying 30kB/month rent for 10 years up-front.

Plus the Transfer fees and 10 years of common fees which I would think common fees alone over 10 years in that area would top up another 400,000 baht. Add the Transfer fees and your looking now in excess of B4 mil

[Lovethailandelite]

Just now, KittenKong said:

 

I'm not aware of anywhere around there where prices are "rising quickly". "Static" seems closer to the mark.

I am not talking about a 30sqm room for B1mil. Look at the higher end condos and not in Pattaya but in areas where people want to live.

[lkn]

1 hour ago, JayBird said:

This has a similar feel to the property bubble crash in the US...

 

The banks in the U.S. could not issue loans fast enough to subprime candidates and would knowingly issue loans to people who had no way of paying them back (according to the post mortem), putting very creative things on the loan applications of their clients.

 

Developers in Thailand have been complaining about high mortgage rejection rates since at least 2015 and foreigner units are paid in cash (rather than backed by a Thai mortgage).

 

So I don’t think a big correction is obvious, because people who have bought to live in their unit will just stay in their unit and “wait it out”, people who have bought in cash will also just wait it out, because there is little pressure to sell, as there is no yearly property tax, and they can likely rent out the unit netting them a decent return on their principal.

 

So the group “forced” to sell and thus driving a correction would be limited to those who have bought speculatively backed by a mortgage and can’t make the payments, but how big is this group?

 

It’s of course hard to predict the future, but overall, I just don’t see the signs of an imminent correction, and certainly not a bubble bursting. Generally when we have a bubble, what leads up to the bubble are people buying the item not based on its value, but based on being able to sell it in a month or year and make a significant profit.

 

Looking at the Thailand house price index (see below), it does actually look a little worse than I had imagined, with an increase of 8-12% from mid 2015 to mid 2016, but followed by a small correction.

 

 

Of course this is the house price index for all of Thailand, not the condo index for central Bangkok (which might look very different).

 

 

 

[lkn]

39 minutes ago, KittenKong said:

Right at the end of the video you get the answer: leasehold to 2027. So really you are just paying 30kB/month rent for 10 years up-front.

 

Can someone give a practical example of a leasehold?

 

Do you pay the lease per month, so when you buy the condo itself, you are really only buying a share in the building, and thus your monthly expenses will be CAM fees + lease to the landowner?  If so, how much would this typically be?

 

And at the expiration of the 30 year lease, I assume there is a fairly good chance of getting a new 30 year lease, but it could be at a higher price, so your monthly expenses could go up. In the case of this building, where the first lease was negotiated 20 years ago, I assume the new lease will be based on the land’s current value, which is basically 20 years of appreciation.

 

[tolsti]

18 hours ago, tagalong said:

Only a fool buys a condo in Thailand.... Wait until you get neighbors from hell on each side of you n at any hour of the night n day,  slamming bloody doors, n I MEAN SLAMMMMMMMMMMMMMM

 

Hey look folks! It's that little ray of sunshine and happiness again!

[KittenKong]

1 hour ago, Lovethailandelite said:

I am not talking about a 30sqm room for B1mil. Look at the higher end condos and not in Pattaya but in areas where people want to live.

 

I know where Na Jomtien is and I have visited all the nicer buildings there (and a few of the not-so-nice ones). As I mentioned, I'm unaware of any building there in which prices are rising quickly.

[Lovethailandelite]

35 minutes ago, lkn said:

 

Can someone give a practical example of a leasehold?

 

Do you pay the lease per month, so when you buy the condo itself, you are really only buying a share in the building, and thus your monthly expenses will be CAM fees + lease to the landowner?  If so, how much would this typically be?

 

And at the expiration of the 30 year lease, I assume there is a fairly good chance of getting a new 30 year lease, but it could be at a higher price, so your monthly expenses could go up. In the case of this building, where the first lease was negotiated 20 years ago, I assume the new lease will be based on the land’s current value, which is basically 20 years of appreciation.

 

Although I have bought a fair few properties here, I have never and never would be involved in Lease hold. There are certainly not the protections here that you have in the UK for instance,regarding leases. There are all sorts of postings on the web where it has now been deemed illegal after leases were sold on a 30+30+30 year basis. Also bare in mind the quality of these new builds. I don't see them standing 30 years without major attention. What that would mean after 30 years for a lease holder even with an option to renew (Which I am not certain there is any guarantee of or at what price) I could only imagine. Buying to live here long term, I have always bought in older, well maintained buildings which were properly built structurally  in the first place.
The day's of the buying cheap condos to flip to Farangs with money to burn is over. The market is saturated with those type of properties now aimed at the Chinese. Yes, the market in Pattaya is depressed with cheap sub 30sqm properties but the market is healthy for quality apartments but as I said, they are not cheap. Quality never is anywhere in the world. Thailand is no different.

[lkn]

Since joining this forum, I have read about renters who complained about landlord not fixing obvious defects (like leaking pipes), landlords that supplied crap furniture (like a bed that did not give you a good night’s sleep), petty fights with landlord over damage to interior, deposit, etc. even one that ended up in a police report.

 

Seems renting is not without its share of problems.

 

Personally I bought and am extremely happy with my choice, but I had the means to buy in a good building in a good neighbourhood, so I can’t imagine why I would suddenly need to walk away from it all, as some renters seems to plan for.

 

[KittenKong]

49 minutes ago, lkn said:

 

Can someone give a practical example of a leasehold?

 

Do you pay the lease per month, so when you buy the condo itself, you are really only buying a share in the building, and thus your monthly expenses will be CAM fees + lease to the landowner?  If so, how much would this typically be?

 

And at the expiration of the 30 year lease, I assume there is a fairly good chance of getting a new 30 year lease, but it could be at a higher price, so your monthly expenses could go up. In the case of this building, where the first lease was negotiated 20 years ago, I assume the new lease will be based on the land’s current value, which is basically 20 years of appreciation.

 

 

 A lease is for the use of a property for x years. You can sell this on during that time (if you can find a buyer), and conditions in the lease (ie decoration, usage, renovation) would normally be fewer than if you were just renting monthly. If you own the lease then you would normally be responsible for all maintenance costs and charges, just as if you owned the freehold. In Thailand 30 years is the legal maximum for a lease and there is no valid or binding way of extending this, apart from negotiating an entirely new lease when the existing one expires.

 

For some unknown reason people in Thailand seem to think that a 30 year lease is worth pretty much the same amount as a freehold. I think they are bonkers. A lease needs several hundred years left on it to be worth as much as a freehold, as far as I'm concerned.

[Lovethailandelite]

7 minutes ago, KittenKong said:

 

I know where Na Jomtien is and I have visited all the nicer buildings there (and a few of the not-so-nice ones). As I mentioned, I'm unaware of any building there in which prices are rising quickly.

Then perhaps groups such as Reinassance hotels (Marriott), Banks and shops moving into the area and quality studio apartments now starting at 6.5MB all have the market wrong in this area?

[Lovethailandelite]

1 minute ago, KittenKong said:

 

 A lease is for the use of a property for x years. You can sell this on during that time (if you can find a buyer), and conditions in the lease (ie decoration, usage, renovation) would normally be fewer than if you were just renting monthly. If you own the lease then you would normally be responsible for all maintenance costs and charges, just as if you owned the freehold. In Thailand 30 years is the legal maximum for a lease and there is no valid or binding way of extending this, apart from negotiating an entirely new lease when the existing one expires.

 

For some unknown reason people in Thailand seem to think that a 30 year lease is worth pretty much the same amount as a freehold. I think they are bonkers. A lease needs several hundred years left on it to be worth as much as a freehold, as far as I'm concerned.

Correct and that's why Leasehold in downtown Bangkok is up to half the price of a Freehold building. Most of the new builds now seem to be Lease hold properties.

[KittenKong]

2 minutes ago, Lovethailandelite said:

Then perhaps groups such as Reinassance hotels (Marriott), Banks and shops moving into the area and quality studio apartments now starting at 6.5MB all have the market wrong in this area?

 

Asking prices in Ocean Marina:

 

2010: 90kB/sqm

2017: 80kB/sqm

 

https://www.hipflat.co.th/en/pattaya/condo/ocean-marina-san-marino

 

No quick price rises there as far as I can see. In fact anyone who bought at the peak of 160kB/sqm in 2012 (or 120kB/sqm last year) may be sitting on a big loss.

And those billboards for "condos from 6.5Mb" have been up for years.

 

Very similar price trends for Ocean Portofino: https://www.hipflat.co.th/en/pattaya/condo/ocean-portofino

 

I have no idea what the business plan is for what Movenpick and Renaissance are doing, but I dont see why this should result in a dramatic rise in existing condo prices as there is still masses of undeveloped land around there.

[zorro1]

I wouldn't be buying property in a resort town unless you plan to retire in it and bangkok prices in lower Sukhumvit are now out of reach for the average Joe.

Your probably better off just investing in the stock market

[Lovethailandelite]

19 minutes ago, KittenKong said:

 

Asking prices in Ocean Marina:

 

2010: 90kB/sqm

2017: 80kB/sqm

 

https://www.hipflat.co.th/en/pattaya/condo/ocean-marina-san-marino

 

No quick price rises there as far as I can see. In fact anyone who bought at the peak of 160kB/sqm in 2012 (or 120kB/sqm last year) may be sitting on a big loss.

And those billboards for "condos from 6.5Mb" have been up for years.

 

Very similar price trends for Ocean Portofino: https://www.hipflat.co.th/en/pattaya/condo/ocean-portofino

 

I have no idea what the business plan is for what Movenpick and Renaissance are doing, but I dont see why this should result in a dramatic rise in existing condo prices as there is still masses of undeveloped land around there.

The undeveloped land here is now very restricted on what can and cannot be built. Beach front land is now restricted to 3 stories so no more high rises close to the beach. Remember this area comes under Sattahip land office, one of the strictest land offices you could hope to deal with. It's nothing like Pattaya land office where anything go's (Mostly) This area is marked as one for a Casino should the law come about in fact there is already one here although locked off. It has been for years. The area is one for long term residents, not quick turn around properties hence the prices hold and rise. I have lived here long enough to see what is happening. Anyway, we have different views that's not a problem to me. It's good to discuss but we are going around in circles.
Enjoy your day.

[realenglish1]

13 hours ago, zorro1 said:

Have a look at the recent frank night thread very very bullish for Inner bangkok
Buy lower Sukhumvit as close to a bts as possible but that may no longer be possible for most on here

It's just to expensive now.. Feel terribly sorry for fence sitters who just sit on hands watching the market go ballistic

If you can afford go Asoke it's emerged as the primary upmarket area

Good luck!

 

You will note it is all propaganda Frank Night has a vested interest in the Inner areas of Bangkok He is the listing agent but has little to do 

with properties on the fringe of Bangkok

[lkn]

59 minutes ago, KittenKong said:

A lease is for the use of a property for x years […]

 

I should have been more clear, I do know what a lease is and that Thailand limits them to 30 years.

 

What I was after was specific examples of pricing for a leasehold, as in, has the lease normally been paid upfront (for 30 years) as part of the initial purchase price, or is it paid monthly, and if paid monthly, what is a typical lease in downtown BKK (per sq. m.)?

 

Also interesting to know, for the leasehold condos built, is the landowner the government/city, or some private company? I would expect the former (as the landowner) would result in a greater chance of renewing the lease as a reasonable price, as failure to get a lease renewal by the government for a leasehold would send a terrible message to the leasehold market — but I expect that so far, no-one has actually been in the situation of having to renew the lease for the underlying land of the “condominium”, so no-one really knows what will happen.

[zorro1]

You will note it is all propaganda Frank Night has a vested interest in the Inner areas of Bangkok He is the listing agent but has little to do 
with properties on the fringe of Bangkok

Not true. You don't need an agent to tell you that suitable development land is running out in bangkok.. Just go for a walk along Sukhumvit!
He is absolutely right that developers will be paying more and passing on the cost to the customer. This is the main reason condo prices in lower Sukhumvit have tripled in 15 years.

I paid 4.6m for a 74sqm condo 12 years ago a few minutes from asoke bts.. If I waited I would be priced out of the market [emoji26]

[Lovethailandelite]

Just now, zorro1 said:

Not true. You don't need an agent to tell you that suitable development land is running out in bangkok.. Just go for a walk along Sukhumvit!
He is absolutely right that developers will be paying more and passing on the cost to the customer. This is the main reason condo prices in lower Sukhumvit have tripled in 15 years.

I paid 4.6m for a 74sqm condo 12 years ago a few minutes from asoke bts.. If I waited I would be priced out of the market

The exact reason the Nana plaza is looking likely to be over very shortly. Allegedly the landlord wants to sell or lease the land for redevelopment. It must be worth absolutely millions in that area.