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Uncertainty in Bangkok’s residential property market – CBRE

The Thaiger

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Uncertainty in Bangkok’s residential property market – CBRE | The Thaiger
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CBRE, an international property consultancy company, is reporting ‘looming uncertainty’ in the Bangkok residential property market.

Although developers have recently increased their launches of condominiums, sales to Thai buyers have slowed in some locations and are likely to slow further with the coming imposition of tighter mortgage lending.

Some developers are trying to find locations where there is real demand from Thai end-users and develop projects that buyers can afford. Others have increased their reliance on foreign sales where there is uncertainty as to who will be the final occupier.

The downtown expatriate rental market is stable, but CBRE thinks the local rental market in the midtown/suburban areas is quite flat, so buy-to-rent investors may not achieve the yields they were expecting.

The Bank of Thailand has recently imposed tighter regulations on mortgage lending by reducing loan to values (LTV) for certain categories of purchasers in an effort to curb mortgage and property market risks and improve housing loan quality.

Effective from April 1, 2019, these new measures will favour first home buyers with genuine demand as opposed to buy-to-rent investors with multiple outstanding mortgages, who are searching for yield.

Although the new regulations will not force developers to collect minimum down payments at contract signing, it will encourage them to collect higher down payments to reduce the risk of loan defaults upon transfer. This will reduce the demand from speculative buyers as they will be required to pay up to 20-30% for the down payment from today’s 10-15%. CBRE believe these measures will certainly cool down and stabilise the overall market situation.

As domestic demand is expected to shrink as a result of the new mortgage restrictions, CBRE anticipates a domino effect where developers will further shift their reliance towards foreign buyers, who purchase primarily with their own funds, as all the money must come in from overseas as foreign currency to comply with the foreign condominium ownership regulations.

Many developers have reported that they have increased foreign condominium sales, particularly to Chinese buyers, both in the form of individual purchases and bulk purchases by Chinese property agencies.

Several projects have revealed that they have reached their limits of foreign ownership quota (49% of the saleable area) which has been a very rare occurrence in the past.

“This further raises our concerns on whether high reliance on foreign sales is positive. It is still uncertain whether these foreign buyers will transfer title if they were speculators and there is no clarity on who will live in these units once construction finishes. Most of the foreign buyers are investors and we doubt that they will live in the units which they bought,” said Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand.

Based a survey by CBRE Research, roughly 7,200 units were launched in the downtown area in the third quarter (Q3) 2018, compared to only 1,300 units launched in the first two quarters of the year. The total number of downtown units launched in the first three quarters of 2018 represents an 8% growth from the same period last year.

The average asking price of units in freehold condominium projects which were under construction (high-end and above) in downtown Bangkok increased slightly by 1.7% Y-o-Y to 277,000 baht per square metre.

CBRE says it does not believe that average prices in the downtown area will drop, except possibly in a very limited number of completed projects with a high level of unsold inventory. According to developers, sales performance of under construction condominium units in the downtown area has dropped to 67% compared to 77% from the same period last year.

The outlook is that sales will be relatively slow for most projects in the downtown area with buyers being more selective, especially for projects that are asking for more than 300,000 baht per square metre. Developers looking to achieve high price levels will have to convince buyers that their project is really worth top prices.

CBRE Research reports that a total of 18,200 condominium units were launched in the midtown/suburban areas this quarter, the highest number of units launched in a quarter since Q3 2013.

The total number of midtown units launched in the first three quarters of 2018 represents a decline of 4% from the same period last year. Developers are now focusing on locations along the future mass transit lines such as the extensions of the BTS Green Line and MRT Blue Line as well as the under construction MRT Orange Line, Yellow Line and Pink Line.

Uncertainty in Bangkok's residential property market - CBRE | News by The Thaiger

The average asking price of off-plan condominium units in midtown/suburban Bangkok increased slightly to 99,700 baht per square metre, up by 5.6% Y-o-Y. The sales performance of more than 200 midtown/suburban condominium projects that were under construction was 71%, compared to 59% in the same period last year.

CBRE believes that the improvement in sales performance of projects in the midtown/suburban areas can be attributed to block sales to Chinese property agencies, although it is uncertain whether these sales will actually translate into transfers at completion.

With rising supply and uncertainty about domestic end-user driven demand and some fears about the sustainability of foreign demand, the outlook for the condominium market has become more uncertain.

In the downtown market, there may have to be some realignment of developers’ expectations on prices in the prime areas or concentration on central locations with slightly cheaper land prices such as Sukhumvit 63 (Soi Ekkamai) rather than Sukhumvit 55 (Soi Thonglor). The midtown/suburban market will have to be increasingly reliant on Thai end-user demand for projects where buyers can get a mortgage with fewer speculators and buy-to-rent investors.

In the downtown expatriate residential rental market, the number of expatriates with work permits increased slightly by 2.7% Y-o-Y and there was no change in monthly residential rental budgets. The market situation overall remains unchanged with limited new apartment (single ownership) supply, but increased condominium supply where CBRE estimates that around 30-40% of the new condominium supply will be offered for rent by the individual owners when the buildings are completed.

Uncertainty in Bangkok's residential property market - CBRE | News by The Thaiger

Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand

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Weather

Summer storm warning for 55 of Thailand’s 76 provinces

Greeley Pulitzer

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Summer storm warning for 55 of Thailand’s 76 provinces | The Thaiger

Today Thailand’s Meteorological Department warned people in 55 northern, north-eastern, central and eastern provinces to prepare for possible “strong winds and hail from summer storms”, that are expected through until Sunday. This time of the year is also know as the bridging season between the annual dry and wet seasons. Weather can be unsettled in parts of thailand during this time.

According to the forecast, the storms are due to the convergence of southerly and south-easterly winds, driven by the cold front over Vietnam, Laos and the South China Sea, and the increasingly warm weather over northern Thailand.

Summer storms, some severe, could affect the following provinces from today…

  • Nan
  • Phrae
  • Uttradit
  • Tak
  • Kamphaeng Phet
  • Sukhothai
  • Phitsanuloke
  • Phichit
  • Phetchabun
  • Loei
  • Nong Bua Lamphu
  • Nong KhaiBung Karn
  • Udon Thani
  • Sakhon Nakhon
  • Nakhon Phanom
  • Chaiyaphum
  • Khon Kaen
  • Kalasin
  • Muk Dahan
  • Maha Sarakham Roi-et
  • Yasothon Amnat Charoen
  • Nakhon Ratchasima
  • Buri Ram
  • Surin
  • Si Sa Ket
  • Ubon Ratchathani
  • Nakhon Sawan
  • Lop Buri
  • Saraburi
  • Ayutthaya
  • Bangkok
  • Nakhon Nayok
  • Prachin Buri
  • Sa Kaew
  • Chachoengsao
  • Chon Buri
  • Rayong
  • Chanthaburi

Summer storm warning for 55 of Thailand's 76 provinces | News by The Thaiger

On Saturday and Sunday, the storms are forecast in:

  • Chiang Mai
  • Lamphun
  • Lampang
  • Phayao
  • Phrae
  • Uttradit
  • Sukhothai
  • Tak
  • Kamphaeng Phet
  • Phitsanuloke
  • Phichit
  • Phetchabun
  • Roi-et
  • Loei
  • Nong Bua Lamphu
  • Nong Khai
  • Bung Karn
  • Udon Thani
  • Sakhon Nakhon
  • Nakhon Phanom
  • Muk Dahan
  • Chaiyaphum
  • Kalasin
  • Khon Kaen
  • Maha Sarakham
  • Roi-et
  • Yasothon
  • Amnat Charoen
  • Nakhon Ratchasima
  • Buri Ram
  • Surin
  • Si Sa Ket
  • Ubon Ratchathani
  • Uthai Thani
  • Nakhon Sawan
  • Lop Buri
  • Chainat
  • Ang Thong
  • Sing Buri
  • Saraburi
  • Ayutthaya
  • Bangkok
  • Nakhon Nayok
  • Prachin Buri
  • Sa Kaeo
  • Chachoengsao
  • Chon Buri
  • Rayong
  • Chanthaburi
  • Trat

The weather department says people should beware of severe weather and keep off unsecured buildings and wilderness areas. Farmers should beware of crop damage. Ships at sea should proceed with caution and watch the forecast in their area..

SOURCE: Thai PBS World

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Thailand

Bangkok Airways cancels all domestic flights from April 7

Anukul

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Bangkok Airways cancels all domestic flights from April 7 | The Thaiger
PHOTO: Facebook@FlyBangkokAir

Bangkok Airways has announced today that they will cancel all it domestic flights from April 7 – 30. The company’s vice president, Tresarum Sitakalin says the flights that are being cancelled are…

  1. Bangkok – Chiang Mai
  2. Bangkok – Phuket
  3. Bangkok – Trat
  4. Bangkok – Sukhothai
  5. Bangkok – Samui
  6. Samui – Phuket

“The company had previously decreased flight frequencies on these routes and also using some of their smaller ATR aircraft instead of their Airbus 320 aircraft.”

“From April 7 onwards until April 30, we will cancel all flights.”

Requesting for a refund can be done at www.bangkokair.com/refund or contact their ticketing offices at +662 270 6699 or Bangkok Airways Call Centre on 1771 . For passengers who purchased their tickets through travel agencies, please contact their travel agency directly.

SOURCE: The Nation

Bangkok Airways cancels all domestic flights from April 7 | News by The Thaiger

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Coronavirus (Covid-19)

Urgent repatriation notice for Swiss and German citizens as immigration rules tighten

Greeley Pulitzer

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Urgent repatriation notice for Swiss and German citizens as immigration rules tighten | The Thaiger

An urgent repatriation notice has been issued for Swiss and citizens in Thailand. According to Richard Barrow’s Twitter feed, flights are being urgently chartered to evacuate citizens of both nations: A notice posted on the Embassy of Switzerlad’s website reads…

For Swiss travellers in Thailand: Swiss charter flights from Thailand to Switzerland/update…

Bangkok – Zurich
– Good news: seats are still available for a 2nd charter on Sunday April 5 (at 13:05). To register, please send the requested information below for all concerned passengers to: bangkok.bkk@eda.admin.ch -> Deadline: Thursday April 2, 20:00

Phuket – Zurich
– The charter flight is now confirmed for Thursday, April 2, at 23:35. People who have registered will receive a confirmation soon.
– Good news: a few seats are still available. To register, please send the requested information below for all concerned passengers to bangkok.hkt@eda.admin.ch ->

Requested information to be sent…

1. Point of departure: Bangkok or Phuket
2. Family name, first name(s)
3. Date of birth
4. Passport number/Residence permit in Switzerland
5. Validity date of the passport or residence permit in Switzerland
6. Phone number where you can be reached at any time

• Please note that no health certificate is required to board on these flights. However, people with Covid-19 related symptoms are not allowed to travel. More information on these flights is available on our website (www.eda.admin.ch/bangkok)

A similar notise was posted for German nationals…

Urgent repatriation notice for Swiss and German citizens as immigration rules tighten | News by The Thaiger

Due to the Covid-19 coronavirus crisis, travel restrictions and requirements in Thailand are sometimes difficult to navigate. One netizen told The Thaiger this morning that Immigration officials in Hua Hin were demanding the following for an extension of stay…

  • Application form (TM.7)
  • Fee 1,900 baht
  • 2 photographs (passport photo)
  • Copy of applicant’s passport (Data page, Visa page, Stamp page, TM6 card)
  • Letter of confirmation and request for a temporary stay from the embassy and consulate in Thailand
  • Proof of address: In case stay at Hotel – Letter of confirmation of stay from hotel – Hotel booking – Photograph of foreigner at hotel 2-3 pictures. In case rent a house/condominium – Rental agreement – Copy of Lessor’s ID card and copy of Lessor’s house book – Copy of house book from where you rent – Photograph of foreigner at house/condominium 2-3 pictures
  • In case of foreigner own the property – Copy of a house book – Copy of Title deed – Photograph of foreigner at the property 2-3 pictures
  • Map from house to immigration
  • Note: Foreigner must prepare all documents for 2 copies

SOURCES: Twitter | Embassy of Switzerland

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