Property News
Condo-mania strikes Bangkok again
Buyers lost billions in the 1997 crash, now warnings of another bubble burst are causing people concern
A towering cement skeleton on Phahon Yothin Road, one of Bangkok’s notorious “ghost” buildings abandoned after the 1997 financial crisis, still haunts Nichapat Tulsakchuentana.
Her parents paid over one million baht for a condominium in the unfinished high rise. The fallout from the 1997 crisis, which devalued the baht and caused businesses to crumble, did not spare this project.
Almost 15 years later, her family has yet to get a single baht back from the developer.
“I learnt a costly lesson. I’ve been very afraid to buy any property,” said Ms Nichapat, 29. “We have no money to buy a place now because all our hard-earned savings were put into that condominium.”
Since the 1997 crisis and the subsequent collapse of several property projects, the Office of the Consumer Protection Board (OCPB) has received numerous complaints from homebuyers. The office has recommended that 20,294 of them take developers to court to seek a total of 4.6 billion baht in compensation.
Ms Nichapat and her family were among 42 buyers who purchased units in “The Natural Place Phahon Yothin” condominium project and who have spent the last decade in courts fighting for the return of their payments.
The courts have found in their favour, but the developer has declared bankruptcy and only two buyers have had their money returned to them.
While for Ms Nichapat and her family, the battle for compensation continues, the property itself is getting a new lease on life by a developer who is continuing the project with a different name, embracing Bangkok’s rapid condominium growth and increasing interest from buyers.
Bangkok’s latest property boom has brought with it a flood of new complaints to the OCPB. Even though developers are said to be regulated more strictly and consumer protection laws have been passed, prospective condominium buyers are told to avoid complacency.
Last month, outgoing Bank of Thailand governor Tarisa Watanagase warned that buyers should be prepared for a hiccup in the rapidly-growing condominium market to avoid a similar experience to the 1997 bubble.
Other analysts said there are no signs of a bubble yet, but warned the condominium market must be closely monitored.
“It is necessary that consumers spend a great deal of time studying property projects they want to buy,” said Nirote Charoenprakob, OCPB secretary-general.
Buyers are encouraged to thoroughly investigate whether high-rise projects have received a construction permit and environmental impact assessment approval from government agencies, as well as loan approval from banks for their projects, he said.
Purchasing units sight unseen also exposes buyers to potential problems, Mr Nirote said.
“In most cases, it’s safer for them to buy finished projects rather than those with no construction in place,” he said.
However, consumers have long criticised the OCPB for failing to offer sufficient and timely protection. The agency cites a lack of staff for its slow response time.
PM’s Office Minister Ong-art Klampaibul, who oversees the agency, promised on Monday he would work to track down “bad operators” and keep buyers better informed.
“Within a month, we will get information from banks and financial institutions on which property projects have had rejected loans and related permits,” he said.
The data will be available and updated regularly on the agency’s website, http://www.ocpb.go.th, along with lists of approved and troubled projects, he said.
“This will keep them informed about which projects they shouldn’t buy,” he said, adding financial institutions will be asked to reject loans for projects that are still waiting for construction permits.
In recent years, numerous legislation has been introduced to protect homebuyers from meeting a fate similar to those affected by the 1997 crisis.
The Condominium Act of 2008 protects consumers against misleading advertisements. This means developers must fully deliver on what they promise in advertisements as part of a legal agreement with buyers or face a maximum 100,000 baht fine.
The Escrow Agreement Management Act 2008 enables a third party to hold a downpayment on a project until the delivery of ownership or project completion.
“Consumers may not know that they can negotiate for an escrow account since this is not legally mandatory but voluntary,” said Mr Nirote.
However, banks have been reluctant to act as escrow agents, citing a need to review the law and related regulations, said Ladavan Tanatanit, an adviser to the Thai Condominium Association, a group of 197 developers.
Financial institutions are also concerned that they wouldn’t earn enough from the venture, as the service fee is set at 0.3% of downpayment, she said.
“I am confident the escrow management plan can practically begin by late next year,” she said.
“By then consumers will be better protected. If any problem occurs, they will get either the piece of property they bought or their money back,” she said.
Mrs Ladavan, a former executive vice president for property development at Bangkok Bank, played down the central bank’s warning of a potential property bubble.
Current developers have better cash flow and better management than those during the 1997 crisis, while financial institutions are stricter with their lending measures, she said.
During the next few years, condominium development will continue to grow steadily, with about 70,000 units offered to buyers every year, she said.
“Competition will be fierce. But consumers will be better-served with quality property,” she said.
- Published in Bangkok Post: 4/09/2010 at 12:00 AM
- Newspaper section: News
Pruksa plans to launch 41 projects by Q1
The top-ranked developer Pruksa Real Estate Plc (PS) plans an aggressive launch of 41 new projects worth a combined 28.7 billion baht by the first quarter of 2011 after doubling its annual budget for land acquisition to 14 billion baht to head off rivals.
Of the 41 projects, 29 worth about 22 billion baht will be launched this year. That will bring its launches to 68 this year worth 47.6 billion baht, 20 more than it projected earlier this year.
Somboon Wasinchutchawal, chief financial officer, said that so far the company had spent 10 billion baht to buy new plots due to its strong financial status and a potential business platform covering every market segment.
“Our only financial worry is debt-bearing interest, which may rise from 0.36 to 0.7 or 0.8 times by the end of the year if we ask for project loans for future development,” he said.
The company received approval from its board to issue bonds totalling 7.5 billion baht. If the economy is good and the rate satisfactory, it will issue bonds of 3-5 billion baht in November. Another 2.5 billion will be bills of exchange.
PS has also increased its sales target from 25 to 35 billion baht. Though it maintains target revenue of 24 billion baht in 2010, the final number could exceed the target by 10%.
Mr Somboon said the company could now realise revenue from low-rise units within 90 days, meaning sales in the third quarter can be realised in the fourth. Each month it has sales of 2 billion baht from the low-rise segment on average.
At the end of June, it had a sales backlog of 23 billion baht, highest in the industry. Of that amount, 10.52 billion will be realised in the second half. The company is likely to realise at least 6 billion in the fourth quarter from low-rise sales in the third quarter.
In July it had sales of 2.6 billion baht and another 500 million baht in the first week of August.
During the first half of the year, it posted 20 billion baht in presales, up 121% year-on-year. It posted a fifth consecutive new record for sales in the second quarter with 11.43 billion baht, up 128% year-on-year.
PS reported a first-half net profit of 2.07 billion baht, up 56% year-on-year from 1.32 billion baht, on revenue of 12.61 billion, or 53% of its annual target.
PS shares closed yesterday on the Stock Exchange of Thailand at 24.50 baht, unchanged, in trade worth 23.8 million baht.
- Published In Bangkok Post: 12/08/2010 at 12:00 AM
- Newspaper section: Business
Cabinet extends property fees cut
The cabinet on Tuesday has approved the extension of a measure to stimulate the property development sector for another month, reports said.
The cabinet extended the reduction of the asset transfer and mortgage registration fee to 0.01 per cent until the end of June. It was due to end on May 31.
The extension was approved on the grounds that the political violence had halted the granting of loans and assets registrations over the past month.
- Published in Bangkok Post: 25/05/2010 at 01:57 PM
- Online news: Breakingnews
Transfers surge at deadline
These all are headline of property news. To read the full news, please click the link, at the end of every news.
The expiry of property tax incentives triggered a 51% year-on-year rise in the number of properties that were transferred in the first quarter, while their value more than doubled, according to a report by the Real Estate Information Centre (REIC).
A total of 79,825 properties, including land plots as well as residential units, transferred in the first quarter, a 31% increase from the fourth quarter last year.
Residential units numbered 61,200, up by 35% from the fourth quarter of 2009 and by 59% from the same period last year, said REIC director-general Samma Kitsin.
Condominium units climbed by 106% year-on-year to 26,852 units, while townhouse gained by 33% to 16,767.
Single houses rose by 35% to 10,363, and shophouses by 47% to 5,770. But duplex houses dropped by 26% to 1,448 units.
“The number of transferred properties was a record high as homebuyers, developers and financial institutions hurried their transactions to complete within the earlier expiration date [on March 28],” said Mr Samma.
However, it was announced on March 23 that two of the three incentives _ low transfer and mortgage fees _ would be extended until the end of May.
In March alone, 37,837 housing units were transferred, almost as many as the total for the final quarter of 2009, which was 38,454 units. In March last year only 18,014 units were transferred.
Non-residential units transferred in the first quarter totalled 18,625. Most were land plots, which contributed 17,120 items, a 45% year-on-year increase.
REIC estimates new units outstripped second-hand units by a ratio of 56:44 _ a shift from 49:51 in 2009 _ that could reflect developers speeding up completion of units to gain incentive benefits.
New units topped resale units for condominiums and duplex houses, but most single houses, townhouses and shophouses were second-hand.
The value of transferred properties was around 275.99 billion baht, up by 124% from the same period last year. Residential units were worth 149.16 billion baht, an 89% increase. Non-residential units gained by 187% to 126.83 billion baht.
Condominiums contributed 47% of the value of residential units, up by 179% to 69.64 billion baht. Single houses made up 26%, rising by 50% to 38.99 billion baht. Townhouses provided 15%, gaining by 44% to 22.74 billion. Shophouses contributed 10%, increasing by 45% to 14.73 billion. Duplex houses provided 2%, up by 38% to 3.08 billion.
The total space of condominiums transferred was 1.22 million square metres, a rise of 111%. Bangkok contributed 1.02 million sq m, an increase of 115%. Nonthaburi made up 115,000 sq m, a gain of 69%. Samut Prakan provided 70,000 sq m, up by 176%.
- Published: 22/05/2010 at 02:59 AM
- Bangkok Post Online news: Economics
Developers’ outlook hinges on incentives
Global recession brings changes to Chiang Mai’s property market
Chiang Mai has a special appeal for retirees because it is much cooler and has more seasonal variations than the rest of Thailand
In northern Thailand’s biggest city the strong wave of British purchasers has subsided dramatically. But buyers from other European countries and Australia are now taking up the slack, said Ed Schroeder, manager of the real estate brokerage Century 21 Lanna Company.
“Previously we had a very, very strong British presence, but then the recession hit – the baht went up against the pound and it got horrible,” he said.
“And England is still in recession, so our customer mix has changed considerably. Before more than half of our customers were English. Now most of the customers are other Europeans because the euro has not suffered as the pound did.”
Mr Schroeder said he was getting a lot of Swiss, French and German buyers, plus some Danes. A large number of Australians are also keen on buying real estate in the “Rose of the North”.
The sharp drop of British buyers also led to younger foreign clients being replaced by retirees.
“Before 2008 younger English people were looking to come here because they liked Thailand and Chiang Mai and a lot of them wanted property here,” he said. “But since the 2008 crisis it has been the retirees that have been looking up here; it’s not the young people at all.”
While retirees are attracted to all Thai resort towns because the infrastructure is good while accommodation is very cheap compared with other countries, Chiang Mai’s special appeal is that it is much cooler and has more seasonal variations than the rest of Thailand.
“Up here it gets a little bit cool and even in the hot season it doesn’t get anywhere near as hot as Bangkok. In the rainy season, when there are showers in the afternoon it cools down considerably at night. So overall the weather pattern here is much more pleasing to Westerners.”
Oakwood sees good demand
The serviced apartment operator Oakwood is optimistic about Thailand, expecting an occupancy rate of 70% for its new property on Sukhumvit Soi 18 this year and 90% in 2011.
“The world economic crisis has eased since late last year as we saw a pickup in occupancy in October to November 2009,” said Bjorn Richardson, general manager of two Oakwood properties in the Sukhumvit area.
“I’ve been in Thailand for 16 years, feeling more Thai than Swedish. Most foreigners familiar with Thailand and visiting here several times don’t feel any violence from the political situation,” he added. “Oakwood has a lot of guests who return to Thailand frequently.”
Oakwood entered Thailand in 1999 with a building on Narathiwas Road. Last month it started operating its fourth property, Oakwood Apartments Trilliant Sukhumvit 18 and it is now 35% occupied. Room rates were 2,000 baht a night or 42,000 baht a month.
Another three properties are in Bang Na, Thong Lor and Sukhumvit 24. The two projects on Sukhumvit Road are owned by the Thai-Indian investor Boutique Group of Companies. Currently, Oakwood operates a total of 470 units and plans to add at least 200 units to its portfolio within this year.
Mr Richardson, who also manages the three-year-old Sukhumvit 24 site, said it had an occupancy rate of 87%, a slight decline from 90% a year ago.
Though the two Sukhumvit sites are close to each other, he said they had different targets. Sukhumvit 18 targets short-stay guests and young expatriates while Sukhumvit 24 focuses on long-stay guests and executives.
Most guests at Sukhumvit 24 are Japanese, American and Singaporean while Sukhumvit 18 attracts more Indian, European and Singaporean expatriates.
- Published: 31/03/2010 at 12:00 AM
- Newspaper section: Business
Incentives’ end could boost big developers
Supalai sees no threat in expiry of tax break
The gap between big and small developers will widen further if tax incentives for the property sector are not extended, says Tritecha Tangmatitham, Supalai’s manager for business development and investor relations.
The government’s property tax incentives are due to expire on March 26 this year and the cabinet has decided there will be no extension.
“Big developers do not have problems surviving or driving growth without the extension of the tax incentives as our financial positions are strong and we’ve got future project plans in place,” said Mr Tritecha.
“But small developers still have limited access to loans and less confidence from home buyers, making it hard for them to enter the market.”
The end of tax incentives will advantage big developers in the long run, he said.
The market share of the top eight developers rose to 49% last year from 34% in 2008. Big developers are also expected to gain market share in the near future, although the withdrawal of tax privileges may slightly reduce their profit margins.
http://www.bangkokpost.com/business/economics/33624/incentives-end-could-boost-big-developers
Property perks to end
Housing prices could rise 4% from April
Housing prices are forecast to rise by at least 4% starting in April after the government announced the end to a package of tax incentives for homebuyers.
Cabinet ministers yesterday declined to extend tax breaks set to expire on March 28, which include temporary cuts in transfer fees to 0.01% from 2%, in mortgage fees to 0.01% from 1% and in special business tax to 0.1% from 3.3%.
The government will also allow to expire a programme subsidising water bills, but agreed to extend until June a programme waiving electricity charges for up to 90 units per month for households. Free bus rides and third-class train fares will also be continued until June, with the total cost of the subsidies projected at 4.5 billion baht.
The property tax breaks were first launched in 2008 under the Samak Sundaravej government, and were later extended by the Somchai Wongsawat government. The public utility and mass-transit subsidies were launched by the Samak government and extended by the Abhisit Vejjajiva government because of the severe economic slump.
Mr Abhisit said yesterday that with the economy now clearly on the road to recovery, it was proper to review the stimulus measures.
But property executives said that allowing the breaks to expire would hurt the industry and the economy. Atip Bijanonda, president of the Thai Condominium Association, said the property sector, which employs 2 million people, had not fully recovered.
http://www.bangkokpost.com/life/property/33420/property-perks-to-end
Property Perfect plans B17bn in projects
The listed developer Property Perfect Plc (PF) plans 14 new projects worth a combined 17 billion baht this year, says chief executive officer Chainid Ngowsirimanee.
‘‘Possible political problems on Feb 26 are likely to have less impact on the property market than the expiration of property incentives on March 26. . . . If the incentives are not extended, the market in the second quarter will be sluggish,’’ says Mr Chainid. WISIT THAMNGERN
The company has also set its sights on expanding into major tourist destinations with the aim of annual revenue topping 10 billion baht within the next three years.
“If we want our revenue to exceed 10 billion baht, we need to go outside Bangkok and enter provinces nationwide,” he said. “The property market in the provinces is interesting and only a few developers have entered it.”
PF is considering Chiang Mai as it first upcountry destination where it plans to develop a condominium project worth 700 million baht under a new brand, Uniloft.
http://www.bangkokpost.com/life/property/33080/property-perfect-plans-b17bn-in-projects
Promotions target end of tax incentives
Korn warns that perks must be reviewed
Property developers are preparing strong campaigns to push homebuyers to commit before the current property tax incentives end on March 26.
Developers have responded to comments from Finance Minister Korn Chatikavanij yesterday that incentive measures must be reviewed.
“People wanting to buy a house during this time should not wait until the last day. They should make a decision right away. There is no need to explain what I mean,” he told a seminar.
In Mr Korn’s view, these measures were introduced during economic crisis so they should be reviewed now that the country has emerged to a recovery stage to maintain discipline and create fairness for other industries that received no tax benefits.
The incentives have reduced the transfer fee to 2% of the appraisal price and cut the mortgage fee from 1% down to 0.01%, while the special business tax is down from 3% to only 0.1%.
http://www.bangkokpost.com/business/economics/32838/promotions-target-end-of-tax-incentives
Property perks likely to continue
Incentives may only benefit homebuyers
Property developers are confident the government will continue tax incentives for the real estate industry that were set to expire in late March.
The Finance Ministry is likely to seek cabinet approval soon for an extension, said Atip Bijanonda, president of Thai Condominium Association.
Speaking at a seminar organised by three real estate associations yesterday, Mr Atip said the extension would improve the overall economy though the government may only extend incentives that benefit homebuyers, such as mortgage and transfer fee reductions.
The Finance Ministry considers that the special business tax incentive only benefited developers, he said.
But Issara Boonyoung, president of the Housing Business Association, said the government should extend the whole package of incentives as developers are likely to pass costs to home buyers if they do not benefit from a reduction in the special business tax.
http://www.bangkokpost.com/business/economics/32767/property-perks-likely-to-continue
Protect your most valuable asset: yourself
What is your most valuable asset? Is it a property you own? Maybe it is a portfolio of several buildings. Perhaps it is your pension fund. Many of us do not see the obvious and it is staring us in the mirror. Our most valuable asset is ourselves. So many of us neglect this fact and do little to protect it.
When we are younger we have a tremendous asset in our earning potential in the future. Let’s take a typical expat of, say, 38 years old. He might be working for a multinational company and have a career ahead of him. He may have the opportunity to be an expat for the rest of his career. Let’s say he is now earning 60,000, or $96,000 per year. He will also have company benefits that give him a hefty disposable income. We assume a modest earnings growth rate of, say, 8% per year accounting for cost-of-living increases and promotions. If he works until he is 60 his salary in his final year will be 302,000 ($480,000). In his lifetime, from now until that point, he will earn a total of 3.32 million ($5.32 million). If you compounded that up at a growth rate of 5% it would amount to a whopping 5.27 million ($8.43 million).
Source: Bangkok Post
BoI Home speculation a concern
The property business overall will record flat growth this year and there is a mild risk of a speculative bubble in low-cost housing, according to the independent real estate consultant Agency for Real Estate Affairs (AREA).
The agency, which conducts field surveys twice a year, found 1,183 projects still open for sale as of the end of last year. Of the total, 843 projects have at least 20 available units.
AREA chairman Sopon Pornchokchai forecast that low-priced condominiums and housing units developed under BoI Home incentives from the Board of Investment (BoI) would dominate the market this year.
The agency sees bright prospects for single houses priced from 1-3 million baht due to strong demand from middle-income earners. It also sees a better outlook for townhouses priced below 1 million baht and condominiums at 1-2 million. Both are promoted by the BoI and there is demand from young people as well as some speculation, it said.
http://www.bangkokpost.com/business/economics/31519/boi-home-speculation-a-concern
Fine Home leads provincial push with Hua Hin project
Fine Home Housing Development, a small property developer, has expanded into the provincial market with the launch of its first project in Hua Hin.
FineHomeshifted its investment focus from Bangkok to Hua Hin after struggling to find suitable land plots for property development in the capital. It is confident of closing sales at the project, which features both mountain and sea views, once construction has been completed by mid-2011, says Mr Sukit.
The company decided to invest in the Prachuap Khiri Khan resort town due to increasingly tough competition in the Bangkok market, said managing director Sukit Traiwanapong.
It is targeting both Thai and foreign buyers, especially Scandinavians, with its 500-million-baht pool villa and condominium project, located on an eight-rai plot on Hua Hin Soi 56, said Mr Sukit.
The project will have 12 pool villas priced from 18 million baht, and 36 condominium units starting at 52 square metres and 2.5 million baht.
http://www.bangkokpost.com/business/economics/31453/fine-home-leads-provincial-push-with-hua-hin-project
Buyers return to resuscitate market
The entire property market except the industrial sector and serviced apartments is showing signs of recovery as the political situation, the government’s stability and policies to promote foreign investment are helping revive foreign demand.
Aliwassa Pathnadabutr, managing director of the property consultant CB Richard Ellis Thailand, said 2010 had begun with better market sentiment. The improving global economic outlook and brighter perceptions of Thailand’s political situation, together with lower prices than other mature property markets had restored confidence in investing in Thai property.
In the first nine months of 2009, foreign buyers making transactions through CBRE plunged from 35% of buyers in 2008 to just 16%. But the proportion picked up in the fourth quarter to 20%.
http://www.bangkokpost.com/business/economics/31380/buyers-return-to-resuscitate-market
Pruksa eyes 27% growth from 48 projects
The listed developer Pruksa Real Estate Plc – a new English spelling removes the “e” from Preuksa – plans to invest at least 20 billion baht to develop new projects this year, CEO Thongma Vijitpongpun said yesterday.
It aims for 27% growth in sales and revenue this year, recording 29 billion baht in sales and 24 billion in revenue.
The company also targets overseas expansion with more developments in India and its first project in the Maldives. It plans to launch 48 new projects worth 30 billion baht this year. Of those, 16 are townhouse estates, 14 single house developments, 16 condominiums and two overseas projects.
Mr Thongma said 6.8 billion baht would be spent to acquire land for all new projects and 12.6 billion for construction of the projects. It will also invest 1 billion baht to expand its precast factory as well as 150 million baht to upgrade its information technology system to support business enlargement.
http://www.bangkokpost.com/business/economics/31327/pruksa-eyes-27-growth-from-48-projects
Tararom to invest B2.5bn in 4 new sites
The property developer Tararom Enterprise plans to launch four new projects worth 2.5 billion baht after freezing new development last year.
Managing director Wasant Kiangsiri said the property market this year would grow by 5% as the sector had improved since late last year. Major factors are higher purchasing power, the expiration of income tax deductions, and developers’ campaigns.
“The resurgent market will continue in the first quarter, boosted by property incentives that expire on March 28,” he said. “The stimulus had a strong impact on homebuyers.”
Chatchai Payuhanaveechai, first senior vice-president of Kasikornbank, confirmed the impact of incentives, saying the bank approved home loans of 7 billion baht in December last year, almost double the normal amount of 4 billion baht released each month.
http://www.bangkokpost.com/business/economics/31326/tararom-to-invest-b2-5bn-in-4-new-sites
Lalin forecasts 30% sales growth
Developer ready to invest again
After downsizing investment and new project launches over the past 18 months, listed developer Lalin Property Plc now plans to launch seven new projects worth 3.18 billion baht with target sales growth of 30%.
”We’ve faded for the past 18 months to avoid the US crisis,” chief executive Chaiyan Chakarakul said. ”Like in 1997, we survived because we were very cautious. Now we are ready to invest.”
The company is planning for usiness expansion based on positive signs for the Thai economy, which has improved since the third quarter of last year.
Mr Chaiyan said Thai economic figures, including exports, private investment, consumer confidence and tax receipts have improved since the world’s economy bottomed out in mid-2009.
Source: Bangkok Post
Laying the ghosts to rest
New government regulations should see many, if not all of Bangkok’s unfinished developments, changing hands in the first half of this year
Among the major property transactions this year will be the sale of some old semi-completed buildings in Bangkok and new distressed projects in resort areas, according to Phil Alexander, president of Martello Realty.
A few of the 10- to 15-year-old unfinished buildings in Bangkok, commonly referred to as “ghosts” by those who see these eyesores every day, will likely change hands within the first half of this year.
Mr Alexander believes deals are imminent because the government has become more flexible on rules and regulations covering these ghost buildings and those in prime locations will be picked up by investors.
“If the government maintains the original FAR [floor area ratio], that is if they are allowed to extend their permits and can build something that they cannot build today, then obviously that makes it financially more attractive,” he said.
http://www.bangkokpost.com/news/investigation/31181/laying-the-ghosts-to-rest
Land tax due this year
PM: Not popular but ‘the right thing to do’
The long-awaited land and building tax has been tabled and should be enforced this year as the Thai economy is now on the path to recovery from the global recession, says Prime Minister Abhisit Vejjajiva.
Introducing the so-called asset tax is a key economic policy for the second year of the Democrat-led administration, along with restructuring agricultural debt and implementing the Thai Khem Khaeng scheme to cut logistics costs and strengthen the country’s competitiveness, said the premier.
The draft of the law is set to be proposed to the cabinet for consideration in the first quarter, said Finance Minister Korn Chatikavanij.
“It’s my intention to get the asset tax done this year,” Mr Abhisit told the annual dinner of the Foreign Correspondents’ Club of Thailand.
The tax, aimed at promoting more efficient use of property, will impose an annual charge on land assets and property nationwide, with local administrations being given flexibility in setting rates, based on their communities’ development priorities.”It [the tax] is not a popular thing to do in political aspects – like increasing taxes on alcohol and cigarettes last year, which we did because it is the right thing to do,” he said.
http://www.bangkokpost.com/breakingnews/31116/land-tax-due-this-year
Mint to gain from St. Regis
The listed food and hotel group Minor International Plc (MINT) expects to book revenues from its property business again after no sales and transfers last year.
Minor will officially launch sales of St. Regis Residences Bangkok, a 30-year leasehold condominium on Rajdamri Road, late this month, said Caroline Murphy, the company’s vice-president for property sales and marketing.
With prices starting from 60 million baht a unit, the 46-storey luxury project retails at 186,000 to 220,000 baht per square metre. About 15% of the 53 units, mostly penthouses, have been reserved in presales, which were worth about 1 billion baht.
http://www.bangkokpost.com/business/economics/30930/mint-to-gain-from-st-regis
HBA seeks extension of property tax cuts
Association says breaks would boost economy
Property tax incentives due to expire this March should be extended to boost the industry and the overall economy, says Issara Boonyoung, president of the Housing Business Association.
Extending the breaks beyond March 28 would help combat negative factors which are likely to crop up this year, said Mr Issara.
Potential headwinds for the Thai economy and the property sector include political instability, the Map Ta Phut case and a possible hike in interest rates in the second or third quarter of the year, he said.
http://www.bangkokpost.com/business/economics/30880/hba-seeks-extension-of-property-tax-cuts
Prices in Bangkok to climb by 10%, says Colliers
Prices of residential projects close to Bangkok’s mass transit system and rents for grade-A office and retail properties in the central business district will rise by about 5% to 10% this year, says property consultancy Colliers International Thailand.
Managing director Patima Jeerapaet said prices of luxury and mass residential units will this year increase by 5% and 5% to 15%, respectively.
http://www.bangkokpost.com/business/economics/30881/prices-in-bangkok-to-climb-by-10-says-colliers
Detached-home proving to be a hit
Developer offers buyers a twin home, built to look like two places – and watches as sales increase by a third in one year
Good design is a big selling point, and some companies have grown by leaps and bounds by offering buyers exactly what they want, when they want it.
In the property world, Thanasiri Group Plc has tapped into a novel approach, by offering buyers twin houses that are almost completely detached and townhouses with similar features.
When clients come to see the company’s twin houses, they almost consider each one as a single house because it is connected to its double with only a few horizontal beams, said Sutthirak Sateanraphapayut, managing director of Thanasiri, which listed its shares on the market for alternative investment last month.
http://www.bangkokpost.com/news/investigation/30799/detached-home-proving-to-be-a-hit
Foreign market slow to rebound
The effect of a large number of foreign buyers shunning Thai properties is harder on some resort markets than others
Hopes that the Thai property market will pick up in the new year have been shaken by both the Dubai World crisis and lingering political problems within the country, said Frank Khan, director of Knight Frank Chartered (Thailand) Company Ltd.
The Dubai World debt moratorium is a big blow for global real estate markets and property players have to watch developments in the emirate, in addition to the performance of US and European economies and the direction of gold and oil prices. Europeans, especially those from Scandinavia, Germany and the UK, are the biggest foreign property buyers in Thailand, followed by Singaporeans and Hong Kong residents.
http://www.bangkokpost.com/news/investigation/30800/foreign-market-slow-to-rebound
L.P.N. targets 20% sales expansion
Pin Klao and Lat Phrao projects strike gold
The condominium developer L.P.N. Development Plc recorded sales of more than 10 billion baht after two projects in Pin Klao and Lat Phrao were sold out and expects its sales to grow by 20% in 2010.
Despite the volatile economy and politics, the company hit its sales target and recorded 8 billion baht in revenue in 2009, up 14% from the year before, said managing director Opas Sripayak.
This year L.P.N. plans to launch six to eight new condominium projects and targets sales of 13 billion baht, up 20% from 2009.
In the first quarter of 2010, the company will launch three projects – Lumpini Condo Town Bang Kae, Lumpini Place Rama IX phase two and Lumpini Place Phahon-Ratchada – worth a total of 6.1 billion baht.
http://www.bangkokpost.com/business/marketing/30738/l-p-n-targets-20-sales-expansion
Thai property market lagging Asia
REIC: Politics, Map Ta Phut cloud optimism
The property market should improve this year due to progress on new mass transit routes and greater capital flows, but mitigating political risk will remain a key factor in ensuring a smooth recovery, says the Real Estate Information Center (REIC).
The strength of East Asia’s economy in part buoyed the Thai economy last year, helping the country to better cope with upheavals caused by the global financial crisis, the report said.
Economies such as China, South Korea and Taiwan, recovered quickly due to an increased influx of capital seeking the higher returns available in the region.
The rise in East Asia’s stock markets outperformed those in other regions, enabling investors to reap the gains and make investments in property, said the report.
Stimulus packages implemented in China and other countries including Thailand, aided the rebound.
http://www.bangkokpost.com/business/economics/30587/thai-property-market-lagging-asia
Big developers gear up for competition
Competition among the property market’s key players will remain intense this year, while prime locations would prove to be recession-proof, industry executives say.
“Heavy competition” among major developers would shape the market in 2010, said Chanond Ruangkritya, chief executive of Ananda Development.
Small and medium-sized developers were squeezed out of the market by the recession last year. “The weak will continue to be forced out of the market [this year] and the remaining big developers will need to work hard to develop their products and find strategies to differentiate themselves,” said Mr Chanond.
But products in premium locations – such as Phaya Thai were units could be sold at more than 100,000 baht per square metre – could rise even more in price, he said.
http://www.bangkokpost.com/business/economics/30461/big-developers-gear-up-for-competition
Property developers to offer mortgages from 2010
Local property developers are expected to provide mortgage services next year after the Financial Institutions Act 2008 has permitted them to offer mortgage loans as long as they do not raise funds from the public.
The Secondary Mortgage Corporation will meet leading developers and three real estate associations in early 2010 to discuss the possibility, said SMC president Duangporn Arbhasil.The SMC mediates between financial institutions and investors to build liquidity in the mortgage loan market through issuing mortgage-backed securities.
In 2010, it plans to make a securitisation worth about 400 million to 500 million baht each for Kasikornbank and Kiatnakin Bank.
“Mortgage companies operated by property developers are likely next year if they are ready,” she said.
- Published: 29/12/2009 at 12:00 AM
- Newspaper section: Business
Raimon Land plans large projects for Thai buyers
The listed developer Raimon Land will continue building luxury condominiums but with a new focus on larger projects and Thai buyers, a shift from its previous focus on foreigners, says chief executive Hubert Viriot.
The previously troubled company has almost completed a financial restructuring, resolved its “internal issues” and is ready to move forward with greater confidence, he said.
Mr Viriot was appointed CEO in March, replacing Nigel Cornick who resigned under a cloud of controversy and falling sales figures. At the time, the company postponed the launch of three projects and industry observers speculated that its flagship project The River, a 15-billion-baht 838-unit development, was in trouble.
Since then, the former vice-president of investments and acquisitions at Kuwait-based IFA Hotels and Resorts, Raimon Land’s major shareholder, has implemented a “sound, but substantial” rehabilitation plan that has cut the company’s operating costs by 40%.
http://www.bangkokpost.com/life/property/30027/raimon-land-plans-large-projects-for-thai-buyers
4-5% condo sales dip seen
Condominium sales this year have been estimated at 70,000 units, a decline of 4-5% from 2008, according to a study by the property consultant Colliers International.
The company said that around 60 new condominiums were launched this year, with approximately 22,000 units, an increase of 9.8% from last year.
New launches of high-end condominiums have slowed, as developers have focused on projects aimed at the middle and upper-middle income segments.
http://www.bangkokpost.com/business/economics/29825/4-5-condo-sales-dip-seen
CONDO MARKET SET FOR RESURGENCE
Heightened demand is likely to follow last year’s slowdown which saw the addition of only around 10,000 new units in the capital By Nina Suebsukcharoen
As many property developers have cautiously reduced project launches this year, the pace of new developments is likely to pick up in the new year because they now have few units to offer, said Apisit Limlomwongse, managing director of Nexus Property Consultants.
Nexus can attest to this trend because it is swamped with requests to find good land plots for development.
”We think the trend is for the supply to increase next year, but it will not expand in a directionless way,” said Mr Apisit. ”The growth will be carefully handled because people have learned their lesson and still worry about the economic situation.”
http://www.bangkokpost.com/business/economics/29625/condo-market-set-for-resurgence
Developers told to get greener
Environmental impact among top concerns
Property developers next year will need to take environmental impact management much more seriously as government scrutiny will become stricter, according to Anant Asavabhokin, the president of the property giant Land & Houses Plc.
The debate surrounding industry in Map Ta Phut has brought demand for higher standards and the Office of National Environment Policy is responding. As a result, he said, environmental issues will be followed closely in real estate developments.
http://www.bangkokpost.com/business/economics/29348/developerstold-to-get-greener
MahaNakorn sees full revival in 2010
The Israeli real estate company Industrial Buildings Corporation Ltd (IBC) is optimistic the Thai property market will fully recover by the end of next year, says chief executive Dalit Braun.
Market sentiment has improved since early this year when the company and its Thai partner, Pace Development, formed a joint venture to construct the 14-billion-baht MahaNakorn project.
“IBC entered the project for the long-term. During our entrance, the world was in the middle of a financial crisis but we insisted on investing in Thailand,” said Mrs Braun. “We have an optimistic outlook on the Thai property market in the long run.”
Albright opens new condo
The new property developer Albright Holdings Co Ltd shifted from exporting textiles to launch a high-priced condominium worth 4 billion baht on Sukhumvit Soi 24.
As the company is a newcomer, it launched the project only after construction reached the fifth floor to build buyers’ confidence, said managing director Somchai Amnueypornsakul.
Bright Sukhumvit 24 is located on a 4.5-rai site on Sukhumvit Soi 24, comprising 292 units sized from 66 to 542 square metres and priced between 7 million and 70 million baht or approximately 120,000 baht per sq m.
Mr Somchai, the owner of the textile manufacturer Siam Acrylic Co Ltd, took over Albright Holdings in 2002 from President Park, owned by Wichai Plapongpanich, with an investment of 200 million baht.
http://www.bangkokpost.com/business/economics/28616/albright-opens-new-condo
The proposed new Property Tax
We’re going to interrupt our series on family law issues because we’ve received a number of emails asking us to explain about the proposed real estate tax law, formally known as Land and Building Tax Act BE (the Draft Act) pending before Parliament. The Draft Act was prepared by the Ministry of Finance and has been approved by the Council of State.
On Aug 25 this year Korn Chatikavanij, the Minister of Finance, presented the Draft Act to the cabinet. It will probably be brought before Parliament and voted upon this year, though there is, as yet, no date set for a vote. If approved, the Draft Act will be effective in January 2010. The tax rates mentioned below would be phased in over a five-year period.
The tax rate in the Draft Act for residential property on which there is no commercial activity will be 0.1% of the appraised price. The appraised price, incidentally, always includes a value for improvements such as houses or buildings on land. The existing tax scheme is in practice largely ignored. The changes in the Draft Act will, therefore, place an additional cost upon owning residential property.
http://www.bangkokpost.com/news/investigation/26685/the-proposed-new-property-tax
Narai sees healthy five years
The real estate developer Narai Property Co expects 4.5 billion baht in annual sales over the next five years, supported by continuous launches of new projects, according to deputy managing director Jainchai Limvattanakul.
The new phase of Park Land Srinakarin Lakeside will have 878 units priced from B1.39 million.
The company this year projects 2.5 billion baht in sales from two new high-rise condominiums. In the first half of next year, it plans another four to five projects including two low-rise developments and one condominium. The plan for the second half will depend on overall economic conditions.
http://www.bangkokpost.com/business/economics/26817/narai-sees-healthy-five-years
Condos appeal to investors
Cash-rich early birds are investing in condominiums for attractive returns at a time of low deposit interest rates, says Kittisak Jumpathippong, chief executive of the property consultant Century 21 Realty Affiliates (Thailand) Co Ltd.
The Voque on Sukhumvit 16 will have 140 units priced from 69,000 baht per sq m.
”No business generates higher margins than property,” he said. ”The situation now is like in 2000-01 when the country just came out of the crisis and investors started their investments”
http://www.bangkokpost.com/business/economics/26887/condos-appeal-to-investors
Govt to help property firms go global
The government is ready to help Thai consultant, design and construction companies penetrate the world market, Prime Minister Abhisit Vejjajiva said on Thursday afternoon.
Speaking at a seminar on government’s policy , the prime minister said the world property market was worth as much as 150 trillion baht a year. The value of the property markets in Asia, Africa and the Middle East was about 70 trillion baht annually, nearly half of the world market value.
“But Thai property firms have less than one per cent of the world market share, or only about 24 billion baht,” Mr Abhisit said.
http://www.bangkokpost.com/business/economics/159198/govt-to-internationalize-property-developers
Prices for new houses climb 30%
Units in Bangkok up to B3.5m from B2.7m
The average new house price has soared by 30% this year even as the purchasing power of lower-income earners decreased, says Sopon Pornchokchai, president of the property consultant Agency for Real Estate Affairs.
“It has been a struggle for low-income earners,” he said. “Many factories hurt by the financial crisis needed to close down.”
This year the average housing price in Greater Bangkok is 3.542 million baht, up from 2.718 million in 2008. New houses built this year total 44,846, worth a combined 158.81 billion baht, down 36% and 23% from the year before, respectively.
Land prices of plots close to the BTS rose 92% between 1998 and 2009, an average of 8.3% a year. The highest increase was in Siam Square at 163%, or 14.8% a year.
At locations near three BTS stations – Siam, Chidlom and Phloen Chit – land prices this year rose by 23-25% from 2008, while land prices at other locations along BTS routes increased 12.3% on average. In all of Bangkok, they rose by 2.6% on average.
The highest increase for plots close to the MRT was on Silom, with a 25% increase, while the average increase along the MRT was 11.7%. From 2005 to 2009, land prices along the BTS and MRT rose 47% and 46% respectively. Bangkok’s average was 18% over the past four years.
http://www.bangkokpost.com/life/property/27278/prices-for-new-houses-climb-30
New Pattaya condo planned
Daika Estate Co, the property development arm of Daika Group, will continue its expansion in Pattaya next year with plans to launch a luxury condominium project worth more than 2 billion baht.
Pattaya still lacks high-end supply despite demand for such products from both Thai and foreign buyers, said Suebpong Atichartakorn, executive director at Daika Estate.
“The condominium market in Pattaya has been growing by over 10% each year, although it has slowed down since last year due to the recession,” Dr Suebpong said.
http://www.bangkokpost.com/business/economics/28006/new-pattaya-condo-planned
Market ‘on the rise’, say developers
20% more units sold in Q3 than in Q2
The local property market continues to rebound thanks to stable interest rates, improved economic sentiment and stronger consumer confidence, say property developers.
Thongma Vijitpongpun, chief executive of Preuksa Real Estate Plc, the country’s second-largest developer, said the number of units sold in the third quarter increased by 20% over the second after bottoming out in the fourth quarter last year.
“Consumer confidence is picking up,” he said.
In the third quarter, the consumer confidence index rose to 74.5 from 72 in the second quarter, according to a University of the Thai Chamber of Commerce survey.
http://www.bangkokpost.com/business/marketing/28122/market-on-the-rise-say-developers
ERA keen on second homes
The recovering Thai economy is likely to stimulate property sales, prompting the real estate brokerage ERA Franchise (Thailand) to expand into resales and rentals of second homes and resort units in tourist locations.
The company will start with a regional franchise in Pattaya that will act as a real estate broker for five neighbouring provinces. This franchise will focus on reselling holiday homes, as the company anticipates stronger demand from both Thais and foreigners following the economic rebound.
Voradet Sivatachanon, ERA’s chief executive officer, said the company would use its regional network of brokerages in Singapore, Malaysia and Indonesia to enhance its prospects.
http://www.bangkokpost.com/business/economics/28615/era-keen-on-second-homes
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