THE PAVILIONS PHUKET BRITISH INTERNATIONAL SCHOOL, PHUKET Kata Rocks
Login | Create Account Poll Currency Weather Facebook Youtube Search

Condo group warns of ‘fly-by-night buyers’

BANGKOK: Condo developers should be wary of “speculative” buyers in the high-end segment who may opt out of buying the units once a project is completed, says the Thai Condominium Association.

propertyconstructionlandeconomicstourism
By Bangkok Post

Friday 21 July 2017, 10:26AM


Workers construct a building at a site in Bangkok. Photo: Bankok Post / Panumas Sanguanwong

Workers construct a building at a site in Bangkok. Photo: Bankok Post / Panumas Sanguanwong

President Prasert Taedullayasatit said the condo market is seeing a growing number of speculative buyers in middle- to-higher-end projects in some locations.

“It’s unusual for upper-end projects to see buyers queuing up to book a unit,” he said. “For high-end customers, they won’t buy a unit if they have to take a long queue.”

The upper-end segment is unlike the lower-end market. The latter has a secondary market of buyers who will buy a condo unit when construction is complete and move into the unit because they cannot afford to pay rent and a down payment at the same time, Mr Prasert said yesterday (July 20) at a seminar on condo development.

CAPACITY TO PAY

He said developers involved in joint ventures with partners must use big and aggressive marketing events to launch projects. Some need to build up their presales, regardless of buyers who might be speculators.

“Speculative buyers will backfire on developers when the project completes construction, as some of these buyers may refuse to get a unit transferred,” Mr Prasert said.

He said many condo developers shifted to the upper-end segment after the lower-end market experienced “problems”, namely with potential buyers experiencing weak purchasing power, high household debt and rising mortgage rejections.

Developers should screen customers, particularly those buying a unit for B10 million or more, before allowing them to book a unit, he said.

“We should prevent a situation such as what happened in the provincial condo market five years ago,” he said.

“At that time, many condo projects in major provinces like Phuket, Chiang Mai and northeastern provinces sold out in a short period but had very few unit transfers upon completion.”

BRITISH INTERNATIONAL SCHOOL, PHUKET

CALL FOR LONGER LEASES

Mr Prasert spoke of a new landscape in the property market over the next three years, with at least eight mixed-use projects spanning 360 rai under development in Bangkok.

The largest is One Bangkok on 104 rai at the junction of Wireless and Rama IV roads with an investment of B120 billion. The project is a development of TCC Assets Thailand, a subsidiary under the group owned by tycoon Charoen Sirivadhanabhakdi.

“All of these mixed-use projects are on leasehold plots,” Mr Prasert explained. “The leasehold property trend will be not in large-scale projects but in the consumer market, as land prices keep rising higher than people can afford.

“The government should thus consider an extension of the leasehold period to at least 50 years, so that consumers can afford a condo unit in the city and the bank will give a higher credit line than for a 30-year contract.”

Peerapong Jaroon-ek, chief executive of SET-listed Origin Property Plc, said his company is adjusting to cope with changes in the environment and consumer behaviour.

Origin has shifted to the upper-end market, with condos priced at more than B3 million a unit making up 62% of supply this year, up from 18% in 2014.

The group also acquired Proud Residence Co, which is developing the Park 24 condo project in Sukhumvit Soi 24, as a way to enter the high-end segment earlier this year.

 

Read original story here.

 

 

Comment on this story

* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.

Comments Here:
Comments Left:
# Characters
Username:
Password:
E-mail:
Security:

Be the first to comment.

Have a news tip-off? Click here

 

Phuket community
Chalong Underpass road surfacing to cause delays, project on target for end of May finish

Nevermind the Underpass and this silly Circle! Why not finish the Chalong Hospital! but this would b...(Read More)


Welcoming HMAS Canberra: Australian Navy head to Phuket for training and community activities

Stop cleaning up Thai's garbage and force the nation to confront the people's ignorance of t...(Read More)


Welcoming HMAS Canberra: Australian Navy head to Phuket for training and community activities

"And I make my hands dirty by keeping clean and fresh my place..."Wow,what a great achieve...(Read More)


Free emergency water to be delivered to Kamala residents

This whole water droughts crisis did reach present stage due to a governor with a ostrich syndrome. ...(Read More)


Free emergency water to be delivered to Kamala residents

You don't mean to say a certain personage got it wrong when he said there was no drought do you?...(Read More)


Chalong Underpass road surfacing to cause delays, project on target for end of May finish

Talking about Chalong hospital, was that not opening this month April? Comparing with the short con...(Read More)


Chalong Underpass road surfacing to cause delays, project on target for end of May finish

Chalong Underpass construction is already causing 3.5 years traffic delay. Another extra 6 weeks to ...(Read More)


Mains water supply outage announced

"Interesting mental output at 5.16," maybe, but then I was following your example "&q...(Read More)


Phuket Town rolls out emergency water supply

Guess water hydrants and sprinkler systems in shopping centres all over Phuket have now not the need...(Read More)


Phuket Town rolls out emergency water supply

When this Governor declares that Phuket has a water drought crisis in 'full swing'? When red...(Read More)