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Uncertainty in Bangkok’s residential property market – CBRE

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Uncertainty in Bangkok’s residential property market – CBRE | The Thaiger

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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Syrian woman arrested with fake Spanish passport at Suvarnabhumi Airport

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Syrian woman arrested with fake Spanish passport at Suvarnabhumi Airport | The Thaiger

PHOTOS: Immigration Bureau

Immigration officers at Suvarnabhumi Airport have arrested a Syrian woman with a fake Spain passport.

The Immigration Bureau reports that, while they were patrolling the airport, they found the woman who was acting suspiciously.

They asked to see her passport which had her name listed on the passport as Alampana Albana, a Spanish national. She was waiting for a flight to Germany.

Officers also found another Syrian passport which identified her name as Mrs Manal Ahmad Alnayed.

The woman admitted that the Syrian passport was her real passport. She told officers her husband, who lived in Germany, arranged it for her.

She says she purchased the fake passport in Malaysia. She received the flight tickets from a foreign woman at the KL airport.

Mrs Alnayed has been charged with illegal possession of, and using, a fake passport.

Syrian woman arrested with fake Spanish passport at Suvarnabhumi Airport | News by The Thaiger

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Bangkok

Spanish man arrested in Bangkok over alleged raped

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Spanish man arrested in Bangkok over alleged raped | The Thaiger

PHOTO: INN News

Immigration Officers have arrested a Spanish man after he allegedly raped a handcuffed Thai woman.

INN News reports that the 30 year old Spanish man was arrested following the issuing of an arrest warrant for the alleged rape of the woman. The incident happened last Saturday at a luxury condominium in Thong Lor, Bangkok.

The female Thai victim told officers she and her friends were drinking at an entertainment venue in Thong Lor. She went back to her room with the Spanish man.

After that the Spanish man used handcuffs with the victim before biting her neck and raping her.

Immigration Officers discovered that the Spanish man has entered Thailand 38 times in the past. He works as a marketing consultant in Spain. Police are continuing their investigation and questioning those involved.

SOURCE: INN News

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Bangkok

Dog patiently watches over deceased master on Pathum Thani roadside

The Thaiger & The Nation

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Dog patiently watches over deceased master on Pathum Thani roadside | The Thaiger

A man, who had left home a month ago to live by the roadside with a stray dog in Pathum Thani, has been found dead. The dog was watching over the body when others discovered the deceased man. Pathum Thani is just north of Bangkok.

The deceased has been identified as 45 year old Surachai Khamsue. He was found lying by the side of a road in Moo 2 village in Tambon Klong Nueng, Klong Luang district, beside the old and un-roadworthy pickup that he had been using as a home.

His sister, 40 year old Chalermsri Sohsawaeng, told police that Surachai had left home to live in the car a month ago, and that she and other siblings had given him money to buy food.

Her brother liked to drink alcohol, she added. The body was sent for autopsy at Thammasat University hospital.

Dog patiently watches over deceased master on Pathum Thani roadside | News by The Thaiger

SOURCE: The Nation

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