It's official - Thai real estate bubble pops.

[funandsuninbangkok]

24 minutes ago, hugh mckee said:

BRIEF-Sansiri posts quarterly net profit of 805.1 mln baht

 

Reuters Staff

1 Min Read

Aug 15 (Reuters) - Sansiri Pcl

* Quarterly net profit 805.1 million baht versus 622.3 million baht

* Quarterly total revenues 8.66 billion baht versus 8.24 billion baht Source text for Eikon: Further company coverage:

 

fake news from you funandsuninbangkok, your one man crusade to cause a slump continues.

You should read the fine print.

 

Profit increase is due to renting unsold units and higher fees to condo owners for maintainace costs. Also a decrease in sales and marketing costs. 

 

 

 

http://m.4-traders.com/SANSIRI-PUBLIC-COMPANY-LI-9065617/news/Sansiri-Public-Management-Discussion-and-Analysis-Quarter-2-Ending-30-Jun-2017-24947468/

[trogers]

8 minutes ago, funandsuninbangkok said:

You should read the fine print.

 

Profit increase is due to renting unsold units and higher fees to condo owners for maintainace costs. Also a decrease in sales and marketing costs. 

 

 

 

http://m.4-traders.com/SANSIRI-PUBLIC-COMPANY-LI-9065617/news/Sansiri-Public-Management-Discussion-and-Analysis-Quarter-2-Ending-30-Jun-2017-24947468/

Doesn't sound like good news to those who buy units from such a developer.

 

They are being undercut in their search for tenants, and being overcharged for maintenance to subsidize the cost of the unsold inventory.

[cheeryble]

17 minutes ago, trogers said:

Doesn't sound like good news to those who buy units from such a developer.

 

They are being undercut in their search for tenants, and being overcharged for maintenance to subsidize the cost of the unsold inventory.

Agreed.

It would of course be illegal to make a profit from maintenance fees under the Condo Act and NO accountant would sign it off as profit

I do however notice that maintenance fees are ubiquitously high for new units despite the fact that presumably for their first few years they require less maintenance than an older building. I dare say this is to allow time for empty units to sell.....until which time the developer should be paying the fees like it or not. So Fun and Sun suggesting Sansiri is gaining funds from maintenance actually suggest they are filling units one way or the other so they are gathering rather than spending fees.......which seems to go against his main contention.

Still, with wages the way they are here fees will always be cheap on an international comparison.

[hugh mckee]

2 hours ago, funandsuninbangkok said:

You should read the fine print.

 

Profit increase is due to renting unsold units and higher fees to condo owners for maintainace costs. Also a decrease in sales and marketing costs. 

 

 

 

http://m.4-traders.com/SANSIRI-PUBLIC-COMPANY-LI-9065617/news/Sansiri-Public-Management-Discussion-and-Analysis-Quarter-2-Ending-30-Jun-2017-24947468/

more fake news, nothing wrong with a business who builds condos to rent unsold units and their increased profits have got nothing to do with charging condo OWNERS higher fees for maintenance, you made that bit up....fake news

 

your previous post/graph had sansiri's profit in decline, now you are posting a reason for their "profit increase"

can you please make your mind up, one post you say profit's down, next post you tell us why they have profit increase,

really you will post anything to support your wish that Thailand's property market is going to crumble, you started this

topic many months ago......maybe eventually you'll get it right.....could be a long wait though.

Edited September 28, 2017 by hugh mckee

[hugh mckee]

2 hours ago, trogers said:

Doesn't sound like good news to those who buy units from such a developer.

 

They are being undercut in their search for tenants, and being overcharged for maintenance to subsidize the cost of the unsold inventory.

trogers, I thought you were meant to be the smart guy? you have repeated and quoted on funinsuninbangkok's foolish

claim that sansiri's profit's have risen because they are charging CONDO OWNER'S higher maintenance fees, he made that up.

 

if you had read their results their profits increased due to a number of reasons one of which was an increase in their business management revenue from from 764 million baht to 951 million baht at the same time their rental revenue grew from 15 million baht to 23 million Baht, there is no mention of "maintenance" charges for condo owners, in the same period their costs for business management were 823 million baht

 

you guys just jump on anything to support your argument and make yourself sound just plain stupid

 

really funinsuninbangkok did you think their revenue from condo owner maintenance was 951 million baht?

are you that stupid? yet rental revenue in the same period was only 23 million baht

 

business management and condo maintenance are not the same thing funinsuninbangkok

 

trogers if you really are a smart guy and have much experience/knowledge in the construction industry? please don't

be so quick to quote and vindicate the fool who goes by the name funinsuninbangkok

 

he made a ridiculous claim that their profits rose because they were charging condo owners higher maintenance fees and you backed him up...........shame on you trogers

 

maybe you will be honest enough to admit your foolishness?

Edited September 28, 2017 by hugh mckee

[hugh mckee]

this comes from "the nation" from 2 weeks ago, the same publication that funinsuninbangkok used for his fake news and crazy condo maintenance comment,

doesn't sound like thailand's property market is doing too badly

Condo development sets records as projects follow new mass-transit lines

http://www.nationmultimedia.com/detail/Real_Estate/30326306

Condo projects lure major offshore investments

http://www.nationmultimedia.com/detail/Real_Estate/30324506

Edited September 28, 2017 by hugh mckee

[inThailand]

6 hours ago, funandsuninbangkok said:

Lookin bad

 

They are the same developers who claim in the first weekend of sales 50% or more are sold.

 

These also are the same developers whose main product is shoe box sized condos with a low price point targeting working Thais. 

[anto]

6 hours ago, cheeryble said:

Just saw the below private ad in CM.

oddly I had previously heard that  a hotshot sales outfit working abroad had sold the place out almost instantly.....foreign quota maybe who knows. Anyway this small modest quality looking unit is for sale and he says the going prices are a lot more than he paid to secure. Who knows.

photos on FBSeckndhand CM search Prio.

 

Prio Condo booking for sale 250,000 baht save 500k on retail price!
 
I am selling my booking for the Prio condo as I have brought a house instead! The current price for the rooms are 2.7 to 2.9 you will be buying at 2.25 so a saving of at least 500,000 baht! Partial furnished with aircons you can see the room in the picture.
 
1 bedroom, 1 bathroom unit ready to move in.
 
The unit is in a great location with pool and fitness, and you can walk across the road to the airport plaza. Also great access into the Airport. You can be in the center of town in less than 5 mins.
You wont find this unit at this price anywhere else, and you can go to check the quality of the building and view the unit at any time, just let me know before hand. If I don’t sell it in the next 2 weeks I will keep it.

 

 

He gives all that info and yet does not state the sqm .B2,25 M will buy a good house in Chiang mai .

[inThailand]

1 minute ago, anto said:

He gives all that info and yet does not state the sqm .B2,25 M will buy a good house in Chiang mai .

Because like most he is trying to unload an overpriced mediocre product no one wants.

[anto]

Just now, inThailand said:

Because like most he is trying to unload an overpriced mediocre product no one wants.

I agree.

[trogers]

2 hours ago, hugh mckee said:

trogers, I thought you were meant to be the smart guy? you have repeated and quoted on funinsuninbangkok's foolish

claim that sansiri's profit's have risen because they are charging CONDO OWNER'S higher maintenance fees, he made that up.

 

if you had read their results their profits increased due to a number of reasons one of which was an increase in their business management revenue from from 764 million baht to 951 million baht at the same time their rental revenue grew from 15 million baht to 23 million Baht, there is no mention of "maintenance" charges for condo owners, in the same period their costs for business management were 823 million baht

 

you guys just jump on anything to support your argument and make yourself sound just plain stupid

 

really funinsuninbangkok did you think their revenue from condo owner maintenance was 951 million baht?

are you that stupid? yet rental revenue in the same period was only 23 million baht

 

business management and condo maintenance are not the same thing funinsuninbangkok

 

trogers if you really are a smart guy and have much experience/knowledge in the construction industry? please don't

be so quick to quote and vindicate the fool who goes by the name funinsuninbangkok

 

he made a ridiculous claim that their profits rose because they were charging condo owners higher maintenance fees and you backed him up...........shame on you trogers

 

maybe you will be honest enough to admit your foolishness?

You seem to have missed the main point of my thrust - Rental Revenue!

 

Perhaps you may want to ponder over some keywords to understand my main thrust: speculation, overbuilding, attractive to flippers, resale units, renting out unsold inventory, conflict of interest in managing the maintenance of completed projects sold with substantial unsold inventory with management cost paid by common fees...

Edited September 28, 2017 by trogers

[inThailand]

37 minutes ago, anto said:

I agree.

And no mention of ownership method. Must Not be foreigner freehold.

[anto]

45 minutes ago, inThailand said:

And no mention of ownership method. Must Not be foreigner freehold.

I messaged the Guy out of curiosity ''how many sqm ?'' .Got a message back ,that he will find out for me today .A bit strange that that's not off the tip of his tongue ,if that's his Condo .

[funandsuninbangkok]

 

Is it happening again?

 

https://www.rt.com/op-edge/398890-financial-crisis-asia-curency/

 

[cheeryble]

Gotta say I have long appreciated TRogers comments on the subject.

Let's keep it civil so he'll stick around.

 

[ExpatOilWorker]

3 hours ago, funandsuninbangkok said:

 

Is it happening again?

 

https://www.rt.com/op-edge/398890-financial-crisis-asia-curency/

 

Is it happening again? NO!

I will call total BS on that story. He fail to mention and totally ignore the huge foreign reserves the emerging countries have accumulated since the '97 crises. 

Also bonds years also not up, but more limping sideways and the FED seem to take their time with any future rate increases.

 

http://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart

Edited September 29, 2017 by ExpatOilWorker

[hugh mckee]

8 hours ago, trogers said:

You seem to have missed the main point of my thrust - Rental Revenue!

 

Perhaps you may want to ponder over some keywords to understand my main thrust: speculation, overbuilding, attractive to flippers, resale units, renting out unsold inventory, conflict of interest in managing the maintenance of completed projects sold with substantial unsold inventory with management cost paid by common fees...

on the contrary, I exactly get your "main thrust", you and that fool funinsuninbangkok, you'll argue whatever to support your desires for a Thailand property crash, claiming maintenace fees from condo owners was responsible for an increase in profits was just plain silly and a lie but you supported your friend with this claim.

 

many many smart people locally and abroad are still ploughing money into Thailand, yet on here we are supposed to believe

that trogers, funinsuninbangkok, expatoilworker, these keyboard experts actually know better than the successful businessman investing heavily in Thailand.

 

now we have the fool funinsuninbangkok posting speculation from RT, he'll use any source, reliable or unreliable to fuel his argument but at the same time ignore anything which says that Thailand is actually doing ok, there is many many postive news stories on the web about Thai property and economy from far more reliable sources than RT,  you guys on here will ignore that and cherrypick from wherever any possible negative stories you can find, you will then add to this your own fiercely negative opinion and add the odd lie as well to try and create your illusion.

 

face it guys, Thailand's property prices are low compared to many countries, local and further afield, it's a growing economy, and 3rd most popular in the world for tourism, it has the foundations in place to grow and improve on it's current situation, the likeliehood of the type of crash you guys are hoping for is very low, not sure of the motivation of you guys, cheap rent? cheap ownership? just wanting others to suffer? whatever it is your most likey going to be disappointed.

Edited September 29, 2017 by hugh mckee

[InMyShadow]

Yawn.. same guys hammering away with doomsday predictions even silly thread head lines. I guess they think if they keep renewing  this thread that it may come true LMAO

 

If you search back to 2008 on TV still hundreds of posts  " keep your home in the USA, dont invest in Thailand" and then BOOOOM!!! 

Sub prime crises and USA real estate smashed to pieces, Thailand unaffected.

 

What idiots but I get a good laugh out of it.

 

Those expats packed their bags and went home when the rent money dropped 50% -80%...no doubt they are still posting the same mantra today

You only need to see the new Q condo project attached to Nana BTS  entry level 1 million USA dollars and up to 4.5 million USA dollars and in nana no less! That clearly tells us where the market is going when it smashes records in an area rife with drug dealers and hookers. Im guessing they didn't build on a whim and a prayer !

 

The lack of readily available development land is quickly pushing up prices as developers are forced to buy out blocks of existing business ..supply and demand is a bitch at times.

 

Its unfortunate that the guys on this thread missed the boat. New prices clearly out of reach for many now..sadly 

 

Edited September 29, 2017 by InMyShadow

[funandsuninbangkok]

55 minutes ago, InMyShadow said:

Yawn.. same guys hammering away with doomsday predictions even silly thread head lines. I guess they think if they keep renewing  this thread that it may come true LMAO

 

If you search back to 2008 on TV still hundreds of posts  " keep your home in the USA, dont invest in Thailand" and then BOOOOM!!! 

Sub prime crises and USA real estate smashed to pieces, Thailand unaffected.

 

What idiots but I get a good laugh out of it.

 

Those expats packed their bags and went home when the rent money dropped 50% -80%...no doubt they are still posting the same mantra today

You only need to see the new Q condo project attached to Nana BTS  entry level 1 million USA dollars and up to 4.5 million USA dollars and in nana no less! That clearly tells us where the market is going when it smashes records in an area rife with drug dealers and hookers. Im guessing they didn't build on a whim and a prayer !

 

The lack of readily available development land is quickly pushing up prices as developers are forced to buy out blocks of existing business ..supply and demand is a bitch at times.

 

Its unfortunate that the guys on this thread missed the boat. New prices clearly out of reach for many now..sadly 

 

Yes we have missed 10 years of riots, rain, rabies, and flat rents.  All the while enjoying a 4 fold increase in boring stocks on the NASDAQ

 

[hugh mckee]

24 minutes ago, funandsuninbangkok said:

Yes we have missed 10 years of riots, rain, rabies, and flat rents.  All the while enjoying a 4 fold increase in boring stocks on the NASDAQ

 

funandsuninbangkok, you have a very unhealthy obsession with money?

 

and before you say so do I, I bought a condo at 42 baht to the £ knowing full well the £ can rise 10%, 20% as it is so low, my first visit to thailand i got 67, last year 52, life is for living, having money is no good if you don't spend it, never heard of anyone yet whose managed to depart this life and take his money with him, I own zero stock or shares, not interested and have worked hard enough to afford to retire early and escape UK winters in beautiful sunny Thailand.

 

it's ok for you to be greedy, to have stock and share and investments, that's your life but if you come on to a forum spouting lies and false claims all in the hope that you can make even more money,  pathetically hoping Thailand has a catastrophic event inflicting their economy, god knows maybe you even wish for a war in North Korea? who knows? anything that will give you more money to count, funinsuninbangkok, why don't you lay off spouting  more lies on here and go and spend some of your money and enjoy your wealth, your greed is a very unattractive disposition.

Edited September 29, 2017 by hugh mckee

[trogers]

1 hour ago, hugh mckee said:

on the contrary, I exactly get your "main thrust", you and that fool funinsuninbangkok, you'll argue whatever to support your desires for a Thailand property crash, claiming maintenace fees from condo owners was responsible for an increase in profits was just plain silly and a lie but you supported your friend with this claim.

 

many many smart people locally and abroad are still ploughing money into Thailand, yet on here we are supposed to believe

that trogers, funinsuninbangkok, expatoilworker, these keyboard experts actually know better than the successful businessman investing heavily in Thailand.

 

now we have the fool funinsuninbangkok posting speculation from RT, he'll use any source, reliable or unreliable to fuel his argument but at the same time ignore anything which says that Thailand is actually doing ok, there is many many postive news stories on the web about Thai property and economy from far more reliable sources than RT,  you guys on here will ignore that and cherrypick from wherever any possible negative stories you can find, you will then add to this your own fiercely negative opinion and add the odd lie as well to try and create your illusion.

 

face it guys, Thailand's property prices are low compared to many countries, local and further afield, it's a growing economy, and 3rd most popular in the world for tourism, it has the foundations in place to grow and improve on it's current situation, the likeliehood of the type of crash you guys are hoping for is very low, not sure of the motivation of you guys, cheap rent? cheap ownership? just wanting others to suffer? whatever it is your most likey going to be disappointed.

Lots of words and optimism but none would explain why a large developer of housing project for sales would have to depend on rental returns for profits.

 

With all that foreign money coming in, at low sales prices compared to overseas, there should not be any significant unsold inventory to provide such profits.

[InMyShadow]

33 minutes ago, funandsuninbangkok said:

Yes we have missed 10 years of riots, rain, rabies, and flat rents.  All the while enjoying a 4 fold increase in boring stocks on the NASDAQ

 

I wouldn't call sub 5 mill 80 sqm bought 12 years ago and 40 k rent flat. I'm halfway between Nana and Asoke. 

 

There are very few making regular gains in the markets. In fact if you believe the posts here everybody rents while killing it in the markets 

 

Most lost it all in the last global meltdown and never recovered. 

 

TV is the hub of trading gurus lol.. Can't  make this stuff up 

Edited September 29, 2017 by InMyShadow

[hugh mckee]

1 hour ago, trogers said:

Lots of words and optimism but none would explain why a large developer of housing project for sales would have to depend on rental returns for profits.

 

With all that foreign money coming in, at low sales prices compared to overseas, there should not be any significant unsold inventory to provide such profits.

so it's rental returns now trogers, have you dropped the belief they are making their profits from charging condo owner's higher maintenance which was the belief you were peddling on here only a few hours ago?

 

if you actually read the report, you'd see that "property management" accounted for 16% of their total profits, oh and 0% from charging condo owners higher maintenance.

 

so 84% of their profits have got nothing to do with rental returns which is bizarre as you write trogers that this large developer depends on rental returns for its profits..........once again fake news trogers, really if you are as smart as you claim try writing like you are a smart guy and not leave yourself open to ridicule with your continuous ridiculous posts.

 

to simplify things for you "smart guy" trogers, their rental revenue was 23 million baht,

hardly dependent on that are they? they made net profit of 804 million baht, 35 times

their rental revenue

 

"Sansiri and its subsidiaries reported net profit of 804 Million Baht, an increase of 29 percent from net profit of 622 Million Baht in 2Q-2016, making the net profit as of 6M2017 increased from 1,178 Million Baht in 6M2016 to 1,316 Million Baht "

 

In 2Q-2017, the revenue from projects for rent amounted to 23 Million Baht, increasing from 15 Million Baht in 2Q-2016

Edited September 29, 2017 by hugh mckee

[trogers]

35 minutes ago, hugh mckee said:

so it's rental returns now trogers, have you dropped the belief they are making their profits from charging condo owner's higher maintenance which was the belief you were peddling on here only a few hours ago?

 

if you actually read the report, you'd see that "property management" accounted for 16% of their total profits, oh and 0% from charging condo owners higher maintenance.

 

so 84% of their profits have got nothing to do with rental returns which is bizarre as you write trogers that this large developer depends on rental returns for its profits..........once again fake news trogers, really if you are as smart as you claim try writing like you are a smart guy and not leave yourself open to ridicule with your continuous ridiculous posts.

 

to simplify things for you "smart guy" trogers, their rental revenue was 23 million baht,

hardly dependent on that are they? they made net profit of 804 million baht, 35 times

their rental revenue

 

"Sansiri and its subsidiaries reported net profit of 804 Million Baht, an increase of 29 percent from net profit of 622 Million Baht in 2Q-2016, making the net profit as of 6M2017 increased from 1,178 Million Baht in 6M2016 to 1,316 Million Baht "

 

In 2Q-2017, the revenue from projects for rent amounted to 23 Million Baht, increasing from 15 Million Baht in 2Q-2016

Should they have no unsold inventory in the projects that they are managing, yes, 0% overcharging. If the project team is also managing the rental of unsold inventory while being paid from the common fees, then, yes they would be overcharging.

 

Overcharging can mean invoicing higher cost into the accounts, and not just demanding a higher monthly fee.

 

Since you are open to discussion, perhaps you can offer the reason for your optimism in view of developers having substantial unsold inventory and have to rent them out, knowing that such units would lose their 'Virgin' status and become used condo units.

Edited September 29, 2017 by trogers

[ExpatOilWorker]

On 9/27/2017 at 2:58 PM, JohnLick said:

I'm just reading on bangkok post about TELA Thonglor

 

apparently 90% sold

- 63 to 210 million per unit

- 110 to 350 sq metre units

- 330k per sq m

 

 

Please explain me why, why would someone buy it? The building is nothing great... It doesn't even have a rooftop pool, almost even Lumpinis ghettos have it. The only pool is on 5th floor facing extremely busy road so full of fumes and noise. Ultimate luxury, yeah.

 

You basically pay this crazy cash just so someone else fits the unit with stuff you may not want/like. But actually the furnishing is likely not included in the price lol.

 

Why not buy older and fit EXACTLY the way you want. You could use freaking gold and Japanese female-like robots as servants and still probably save cash.

 

The below post by Steveromagnino answer your question:

 

If I can add my 2c to this. Firstly, the Thai real estate sector is running on several distinct tracks, and each has its own strengths and weaknesses. I will only talk about Bangkok as I don't know enough about some provincial markets.

You have the pre 1998 crash high quality buildings; a few of these which are owned by high-end Thai families (e.g. Somkid Gardens, Langsuan Ville, Grand Langsuan) in prime neighborhoods with a majority of large units and owner occupiers have seen a minimal number for sale and good maintenance....so you also see good capital appreciation and now these are all selling for deals around 125 - 150k per sqm despite the buildings being older. The only units in Langsuan for 200k per sqm+ are newer buildings (Q House Langsuan, etc) not the older ones.

You have the pre 1998 mid to lower quality buildings; often owned mostly by Thais, these will likely never go anywhere and will be mired around 40k per sqm for the foreseeable future until the location becomes so appealing that the building can be rejigged - however once the building goes down the vicious circle of being cheap so attracting cheap owners who don't pay much in maintenance which means building starts getting run down....it is very hard to fix. Who wants to live in a dump? This is the cheap end of the market; appealing on face value - best avoided.

You have the post 2003 buildings aimed at the upper end market; if they are from a reputable developer (meaning generally publically listed), decent specification, reasonable sizes (i.e. 1 bedroom 50sqm; 2 bedroom 90sqm+; 3 bedroom 140 sqm) with between 90 - 250 units, decent build quality (and some are some aren't) then these have also seen good appreciation if they are in a good neighbourhood and reasonably well run buildings despite not being brand new - examples of these would be buildings like The Lakes, Legend, Domus, Emporio Place. There are owner occupiers and renters in these buildings (including high end Thai renters nowadays - loads of them) but the reason why some buildings succeed and others fail (failures include buildings like The Met, Watermark, Empire Place) tend to be very specific to that building alone and the Thai market perception drives the success or failure for the most part as that's most of the buyers although not always.

Then you have the post 2003 buildings aimed at the mid end. This is where the bulk of the units are LPN etc - then it all comes down to publically listed developer, good building management (LPN are excellent at it), ok facilities and a load of units - difficult to make a lot of money in this type of unit but the rentals can be good - again PLENTY of Thais that rent buildings for 20,000b++ a month.

The bubble if any is forming in the mid end to the gap between mid end to high end. The truly high end (185, MahaNakorn, Sukothai Residences) has a high society market that will live in those both owner occupiers and renters made up of both Thais and expats (mostly Singaporeans and HK Chinese) so these have seen good capital appreciation so far and almost no supply; in fact 185 would be one of the best investments had anyone bought in 2009 at 200,000b per sqm and sold at transfer around 290,000b net (Langsuan side low floor actual numbers); that's a huge gain (with leverage based on 35% deposit something like almost 100% return). I have several friends that did exactly this. again, though it is very project specific, and the end result and quality strongly dictates the success or failure of some of these buildings; Royce would be an example of a building that didn't really fire. The Millenium is another that has struggled until recently.

There is a big difference between buying from a 'proper developer' (meaning Sansiri, Noble, Raimon Land, AP, Pruksa, etc) and a non listed smaller one - the smaller one it is harder to get financing in the secondary market, more difficult to know whether they will ever complete...so the smaller developers don't get a premium and that stays that way long term generally unless the building is sensationally good or the developer has some other business that is related (example: Domus from Gaysorn which has roughly doubled in price since completion in part due to design, location, reputation of the developer, rental income). Compare it to Wilshire which is only a block away, but has pretty much gone nowhere, and if compared to say La Maison Siam in the same vicinity which is still under 100k per sqm...well that demonstrates the way the market perceives value. Even listed developers some projects succeed and some don't this is where choosing carefully is so important. Freehold always will outdo leasehold, although Four Seasons seems to be changing that perception slightly - I don't really believe the CPB numbers from Langsuan being representative of the whole market, like Iconsiam big conglomorates sell to the insiders and suppliers and boom their project is mostly sold straight off.

Buildings with less than 100 units often have problems with maintenance and any building that has a low number of units and a monthly fee of 30b per sqm, well it is going to end up in the toilet long term.

Low rise is usually much more tricky to sell than high rise also.

A lot of the inflation in pricing is not developers getting rich; rather the cost of labour, cost of land and cost of materials has seen substantial inflation. At the high to very high end of the market there are a limited number of contractors; now that CPB are doing the huge Langsuan development with Thai Obayashi and given BTL doing a number of projects, the choice of contractors is limited now and so prices have gone up, which makes selling prices increase.

The ideal mix of owners is mostly Thais with a decent number of expats, and a larger proportion of owner occupiers. It is not true that "Thais don't buy high end they can't afford it" given that 185 is 80%+ Thai; most of the Major projects are 80%+ Thai - increasingly Thai people with money will live in a condo (or their younger generation will)

Lest you think AEC won't have an impact on property.....there are already major corporates moving head offices from Singapore to Thailand, with up to 100 (in the case of one large finance firm alone) senior executives all earning 300-800k USD++ a year looking for high end places to live - this will potentially increase and they aren't going to be living in McMansions for 10k per month with hot Ramkamhaeng students. Well, maybe they will have that as a separate weekday 'pad' but at least they won't be hanging out there with their wife and kids. Some of these intend to buy some are intending to rent - right now there's only about 4-5 developments they will even look at at the CEO level.

So....if there is a bubble what will happen if it bursts? Given that the high end and top end of the market are mostly financed with cash and no debt, you will see like in 1998, almost no sales going through, and a complete lack of liquidity - people will just sit on what they own. High end Thais who are self employed owning businesses tend to be fairly cash rich; they know that property is one part of an investment strategy along with shares, money, etc - long term if Singapore is 4X and HK is 10X Thai prices....there is still room to move and Bangkok has a lot of strengths if things are improved - the market overall will creep up but prime property will race ahead and suburban sprawl will struggle.

The mid end there will be an issue but as long as people can service their debt then units will end up worth less on paper, yields from rent may decrease, but guys, this is Bangkok, there is a huge office worker & student market for LPN level studios; just that the returns will get worse and worse. Sales the prices will only massively slump if people cannot transfer for some reason; that won't be solely a property crash, it will be an entire economy crash with people not working and so on. What we may see though is the speculators getting burned. For this reason, I personally never buy condos where the downpayment terms off the plan are <15% total before transfer...that's like an invitation to speculate.

The ones that will really slump are the less known developments, smaller number of units, low operating budgets and large numbers of renters; once these start to go down, it becomes very hard to save them. We all known "Deeluxe apartments in the sky' that ended up like this post 1998 (Muang Thong has a ton of them) and once they go down, that rental market moves elsewhere or starts renting someplace else.

 

[ExpatOilWorker]

2 hours ago, hugh mckee said:

so it's rental returns now trogers, have you dropped the belief they are making their profits from charging condo owner's higher maintenance which was the belief you were peddling on here only a few hours ago?

 

if you actually read the report, you'd see that "property management" accounted for 16% of their total profits, oh and 0% from charging condo owners higher maintenance.

 

so 84% of their profits have got nothing to do with rental returns which is bizarre as you write trogers that this large developer depends on rental returns for its profits..........once again fake news trogers, really if you are as smart as you claim try writing like you are a smart guy and not leave yourself open to ridicule with your continuous ridiculous posts.

 

to simplify things for you "smart guy" trogers, their rental revenue was 23 million baht,

hardly dependent on that are they? they made net profit of 804 million baht, 35 times

their rental revenue

 

"Sansiri and its subsidiaries reported net profit of 804 Million Baht, an increase of 29 percent from net profit of 622 Million Baht in 2Q-2016, making the net profit as of 6M2017 increased from 1,178 Million Baht in 6M2016 to 1,316 Million Baht "

 

In 2Q-2017, the revenue from projects for rent amounted to 23 Million Baht, increasing from 15 Million Baht in 2Q-2016

Since you mention Sansiri it it worth noting that they have had a hard time selling all their units since 2015 and still build more. It is just the nature of a public listed company.

 

Sansiri have 20 billion baht worth of unsold units, so lets build some more!

Sansiri turns focus back to Bangkok

CHULARAT SAENGPASSA

THE NATION

SANSIRI will launch eight condominium projects worth Bt21 billion this year - all in Bangkok, as the residential developer shifts its focus back to the capital.

"Purchasing power in the provincial market has faded in the face of falling crop prices," said Uthai Uthaisangsuk, the firm's senior executive vice president of business development and high-rise project development.

"We've set our condo sales target at Bt22 billion this year and we're confident that we can achieve it."

The firm's total revenue target is Bt34 billion.

All of the new condo projects will sit along Skytrain routes.

The Line will be developed by a joint venture with Skytrain operator BTS Group Holdings. It will be located near Chatuchak station. The Bt5.6-billion project will be launched next quarter. The first project is the Bt1.4-billion The Monument, sited just 300 metres from Sanam Pao Station.

"We are proceeding in line with our 'engineer for growth' approach," Uthai said.

Last year, Sansiri's profits came very close to its target rate of 12 per cent despite the economic slowdown.

It attracted many foreign customers, with the Chinese buying the most units. The biggest group by value is the Russians.

To respond efficiently to the changing circumstances upcountry, Sansiri has decided to concentrate on just Bangkok this year. Also, there was no clear-cut information on transport-infrastructure development in the provinces.

Sansiri decided to suspend plans to develop two condo projects in the Northeast as it waited to see how the new rail route would be developed in the region.

The firm now had Bt15 billion in unsold condos upcountry and Bt5 billion in Bangkok while existing projects continue.

Sansiri will not stay away from the provincial market for long, Uthai said, pointing out that the upcoming Asean Economic Community would likely spur the upcountry market and the firm would definitely make investments there. Plus Concierge will be a new service designed to respond to customers who have bought units for investment. It will be available in six provinces this year.

This builds on the success of Sansiri's Rental for the Holiday, which was brought out last year. It offers long leases for foreign customers interested in vacation homes, he said.

This year, Sansiri has a Bt7-billion budget in hand for the purchase of land that will be used for its 2016 projects.

http://www.nationmultimedia.com/business/Sansiri-turns-focus-back-to-Bangkok-30256304.html

[hugh mckee]

2 hours ago, trogers said:

Should they have no unsold inventory in the projects that they are managing, yes, 0% overcharging. If the project team is also managing the rental of unsold inventory while being paid from the common fees, then, yes they would be overcharging.

 

Overcharging can mean invoicing higher cost into the accounts, and not just demanding a higher monthly fee.

 

Since you are open to discussion, perhaps you can offer the reason for your optimism in view of developers having substantial unsold inventory and have to rent them out, knowing that such units would lose their 'Virgin' status and become used condo units.

I don't have optimism or pessimsim, I just go on what I read fron news reports, from the likes of bangkok post, reuters, the nation etc and EVERYTHING I read from them contradicts the "experts" on here.

 

I plan on spending maybe 5 months per year in thailand so yes it suits me if the country is prospering, not too bothered about property prices, buying a new condo in thailand is a bit like buying a new car at home, you accept it's bad value but you do it because this is what you want, to be the first and only owner and for this you accept there is a premium, I know buying my condo was risky, bad value and possibly not too smart but my condo building is now 70% complete and 90% sold, great location, 50 yards from a nice quiet beach, hopefully and most likely I will be fine, if it drops 20% in value afterwards I'm not too bothered, nothing I can do about that and I get exactly the condo I wanted

 

I wish and hope for Thailand to prosper but not for financial reasons unlike the posters on here who wish for Thailand not to prosper in fact they wish for the total opposite they hope for financial crashes, many thai and foreign people suffering just so as they can benefit, selfish to extremes, lets hope these parasites do not get their wishes, these guys do not care what lies or even slander they produce, they basically will say anything and back up any lie to support their argument.

 

still find it hard to believe that yesterday 2 frequent posters trogers and sunandfuninabangkok were claiming that a massive comapny like sansiri were only in profit beause they were overcharging condo owners for maintenance fees, any little credibility you may have had went there, you guys proved you are clowns who will say absolutely anything.

 

 

Edited September 29, 2017 by hugh mckee

[trogers]

51 minutes ago, hugh mckee said:

I don't have optimism or pessimsim, I just go on what I read fron news reports, from the likes of bangkok post, reuters, the nation etc and EVERYTHING I read from them contradicts the "experts" on here.

 

I plan on spending maybe 5 months per year in thailand so yes it suits me if the country is prospering, not too bothered about property prices, buying a new condo in thailand is a bit like buying a new car at home, you accept it's bad value but you do it because this is what you want, to be the first and only owner and for this you accept there is a premium, I know buying my condo was risky, bad value and possibly not too smart but my condo building is now 70% complete and 90% sold, great location, 50 yards from a nice quiet beach, hopefully and most likely I will be fine, if it drops 20% in value afterwards I'm not too bothered, nothing I can do about that and I get exactly the condo I wanted

 

I wish and hope for Thailand to prosper but not for financial reasons unlike the posters on here who wish for Thailand not to prosper in fact they wish for the total opposite they hope for financial crashes, many thai and foreign people suffering just so as they can benefit, selfish to extremes, lets hope these parasites do not get their wishes, these guys do not care what lies or even slander they produce, they basically will say anything and back up any lie to support their argument.

 

still find it hard to believe that yesterday 2 frequent posters trogers and sunandfuninabangkok were claiming that a massive comapny like sansiri were only in profit beause they were overcharging condo owners for maintenance fees, any little credibility you may have had went there, you guys proved you are clowns who will say absolutely anything.

 

 

I think you are reading posts like these in this section of TV forum for the wrong reasons.

 

There will be posts that debates on the investment aspect of real estate in Thailand. That's the money part. While you are in the category of buying for your own use and pleasure, there would be others who buys as an investment.

 

There would be people holding different viewpoints, some optimistic, some pessimistic, and some preferring investing in the financial markets and just rent.

 

Readers on such a debate would gather ideas and formulate their own opinions and course of actions. There is no good or bad nor right and wrong.

[trogers]

1 hour ago, InMyShadow said:

You want some info that will certainly cement your views? 

 

Trogers claims to own several condos in bangkok lol, I guess he thinks it gives his countless bearish posts credibility or he thinks we are stupid? 

 

Go ahead and click on his nic and search .. He isn't hiding it. Or just ask. 

Yes I do own 5 condo units that I purchased in 2007-8. They are all old units that I refurbished and rent out. My investment strategy was formulated after being a consultant to two condo projects launched in 2003 and 2005.

 

I have no plans to sell them within the next decade and I am neutral as to the present state of the market, but hold an interest in the direction the market is moving.

 

I am only considering selling my apartment unit in HK at this time because it's 30-year lease is expiring next year and require payments on land rent and building upgrading.

 

I am not confident that there would not be another exodus of the HK people when the Red Army moves in nearing the end of that 50 years agreement with the UK.

[JohnLick]

6 minutes ago, hugh mckee said:

be surprised after that if they can't afford to pay their electricity bill but what do I know you stay in a "high end" area of bangkok and they can't afford electric there, that does surprise me???

 

but I learn something new every day on here, now I understand that when I move into my condo, I don't pay my electric bill direct to the electric company but in fact I pay it to my condo management, thank you for enlightening me John Lick..........you buffoon!

 

I can add that gem to the fact apparently that Sansiri only made a profit because they charged condo owners higher maintenance fees.

Check this you id?ot https://ibb.co/nBbrWG it says "pay to MEA" ... means Metropolitan Electricity Authority you joke