Buying Condos and Apartments in Bangkok

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Fitness centres are standard with many condos

Due to strict laws and restrictions regarding foreigners purchasing land in Thailand, the most popular option is to invest in condos and apartments. Within Bangkok, there are several property developments owned and managed by foreigners who specialise in providing services to the expat community. Many more Thai development companies also target this increasingly lucrative sector of the market, and all new buildings will have an English speaking sales team, reception, and management members.

For those purchasing condos and apartments in Bangkok, there is an incredibly large market for luxury upscale units. Recently completed condominiums have begun a movement of competition for those who are selling or leasing their properties and units, creating even more options for potential buyers. Over the past couple of years, more than 19,000 units have been started or completed.

Many of the recent developments tend to be around the areas of Sukhumvit, Sathorn and Silom. The size of the units typically range from 45sqm to 80sqm and include one or two bedrooms. For the high-end condos in these areas, three to four bedrooms ranging from 90sqm to 190sqm are quite common. There is also an emerging market for buying bargains in modest or ageing buildings (that might have had difficulties during the ’97 crash), renovating them and selling them on at a profit.

The latest trend in purchasing condos is the off-plan method, in which buyers no longer need to see the actual unit they will be buying. They simply trust in the company’s reputation and make their decision based on the development’s show rooms. This is not at all uncommon in Bangkok and thousands of units have been sold via this method.

Buying pre-built qualifies you for good discounts; up to 30 per cent. If the project sells out and is successfully completed the value may rise even further. Typically a deposit and instalments are due throughout the building schedule (up-to 18 months), with transfer of ownership upon completion of building and payment.

Many investors make good income from these, selling before transfer from the developer is made, also avoiding transfer tax. In some cases, the more progressive developers offer to lease the units on your behalf, with guaranteed returns sometimes in excess of 10 per cent, although this figure is unusual. However, buying ‘off spec’ is risky and projects do fail, leaving buyers out of pocket. Despite the lessons learnt from the 1997 financial crisis – which left many half finished buildings dotting the Bangkok skyline even a decade later – companies regularly run out of capital or encounter cash flow problems.

It’s very important to thoroughly vet the developers’ reputation, the rate of sales in the building, and the economic outlook, as these all conspire to leave some investors in an ugly legal situation that sometimes becomes difficult to resolve fairly. In other cases, the developer has defied building restrictions, counting on bribery to resolve any problems. Authorities have begun to crack down, though, and some buildings have had their construction approval suspended as a result of illegal activities.

Bangkok’s condominium market’s selling prices today average around 120,000 baht per square metre in the city centre. Prices continue to increase at around 10 per cent a year.

Assistance from Property Report – Asia’s leading real estate magazine.

 
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