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beautifulthailand99

Is it truly game over for the medium range condo market in farang tourist areas (Bangkok excepted). 

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I'll concentrate my discussion on areas that have a large proportion of the condo market for western retirees, snowbirds (including eastern Europeans particularly Russians) etc which will be principally, I would have thought , Chiang Mai, Phuket , Pattaya , Jomtien and Hua Hin. I’ll leave Bangkok out of the argument as it truly an international hub with its own cosmopolitan market at all levels and should be more resilient than the other tourist areas (sea levels may be an issue in the longer term but not for this thread !) 

 

There can be no doubt that the relentless rise of the baht and decline of many western currencies coupled with ever increasing onerous visa requirements have led/are leading to a mass exodus of farang retirees and making future prospective retirees look elsewhere to live. It’s a situation that I can’t see changing in the short to medium term if at all. The rise of that market in the last couple of decades has led to huge speculative building particularly so in the Pattaya/Jomtien areas with most of the condo blocks being sold that having the magic 49% foreign quotas. And it is a building boom that seems ongoing and seemingly endless at the current time.

 

What is going to happen to those condo blocks in the longer term if units cannot be sold or even rented except at giveaway prices. Will the Chinese/ Asian/Indian markets come in at some point to bottom out the prices and bring all the issues that those cultures bring to those happy living in a ‘farang ghetto’. Or will the blocks go into ongoing long term decline as maintenance fees remain unpaid and rules go to pot.

 

Maybe the married couples scandinavians with good pensions and only wanting 3 months in the sun will sniff bargains and take up some of the slack. Or digital nomads on genuine ED visas  will see the attractions of living by the sea and bring a more youthful vibrant culture. Smoked out Chiang Maiers and Bangkokers who aren’t leaving Thailand the reasons stated before may also move to the seas for the fresher air. Or maybe they won’t and massive oversupply and poor demand will lead the charge of decline and fall. 

 

My wife remembers living in a condo block when she was a teenager with her siblings where the lift was out of action as the block could no longer raise enough money to pay for repairs.I have stayed/visited a number of low end Thai condos blocks in my time and whilst compared to a slum/Africa they are relative palaces I would never choose or want to live in such places. Is that where these condo are heading ?

 

I ask this question as we have a high floor studio apartment in a well maintained block in Jomtien where we visit for 3 months of the year and are very happy with the block and location.And if the status quo was to maintain then all would be hunky dory. 

I’d like to buy a big one bedroom in the same block as somewhere we can call our Thai base and after I’m gone she can call her home. She has family members close by and a big and close family nationwide. She won’t be short of a bob or too when I’ve gone so she will have the freedom to travel and her family will be happy to stay on sofa beds and the like as long as they are with her. So a big 1 bed condo would suit her fine for many reasons in the short and long terms. 

 

But for the reasons I’ve outlined above  we have concerns that some of these blocks will ‘die’ or go into terminal decline. If that is likely then there will be no point in buying a bigger condo and we can happily pimp our studio as our base for the foreseeable. So as the thread title says ‘Is it truly game over for the medium range condo market in farang tourist areas ?’

Views please. 
 

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One thing's for sure if Thailand has a wise/engaged government keen on maximising the countries economic potential these potential death spirals could be avoided. Condos in Pattaya/Jomtien are cheap as chips as compared to SE England.

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With the Chinese being the main purchasers albeit thats dropped significantly, the future of condos in Thailand looks bleak. Best learn Mandarin so can take part in AGMs

 

Edited by baansgr
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Never put all your eggs in one basket....so don't buy another one in the same area/country.

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I think it is. The farang buyers are shrinking, and the developers keep building. Classic oversupply. Definitely a renter's market outside of Bangkok.

I was having lunch at Charin Garden today, a popular food spot in Mae Suai for tourists and Thais alike. Normally packed to the rafters with customers, it was about two-thirds empty. High season in Chiang Rai feels like low season.

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BEautifulthailand99, I stay through the winter in Jomtien, near the night market. .I love the area for the Rompo market nearby and its location near the baht bus, bus station, Tesco’s etc. I don’t go to the beach for obvious reasons, but  my condo has three pools. Nearby are the awful high rise condos and the Caribbean on it’s way up. The high rises are empty as are nearly allnew condos .  I would not buy mine, as it’s badly built and things keep falling off! I was planning on buying a nice studio in a similar area , but , having thought about it , and the baht , I have decided not to. It’s easy to rent. In your position, i would sell your present condo ( if possible) and buy a solid quality place in a small building. I liked the ones next to Rompo , the names on the tip of my tongue, ( there’s a few in  Jomtien and Pattaya) . GOod luck.

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4 hours ago, newnative said:

     I would steer clear of any of the large new or newer condo projects.  Some become instant hotels and that drives away long-term owner residents and long-term renters--many, including me, do not want to live in a hotel environment with all that entails.  

    I've told the story of attending an annual meeting at one of these new projects where many of the owners were up in arms at their new residence becoming a hotel overrun with illegal daily renters.   However, one owner stood up and said, in effect, wait a minute. I pay over a million baht a year in condo fees and why shouldn't I be able to rent my condos short-term?  Even if it is illegal.

    Knowing the condo fee per square meter and doing the math, this gentleman has 30 or 40 condos--maybe more--in the building and is operating his own illegal boutique hotel within the condo project.  Suppose he decides to stop paying his condo fees?  Is he in such a powerful position that the condo has to allow him to operate his illegal business?  And, he is not the only owner in the project with multiple units renting them illegally.  You need to have multiple units to make any real money renting short-term.

    No matter how you look at it, it's a bad situation--one I don't want any part of.  I don't want to live in one of these big projects and I don't want to invest, either.  As an investor I could only afford one condo and I can't attract a long-term tenant to live in one of these projects--and you don't make any money and its too much of a hassle renting short-term with just one condo.  Plus illegal.

     I think smaller, older projects in good locations are still a safe bet--especially projects that came on the market before Airbnb became popular.  These projects have more owner residents and more investors renting their 1 or 2 units long-term.  Being older and smaller, it would be difficult for someone to come in and buy 30 or 40 units to set up an illegal hotel that results in the condo project deteriorating and becoming an undesirable place to live long-term.  As more people become fed up with living in these condos turned hotels, some might start looking around for a smaller, older project to buy into or rent long-term.  I say that, in part, because that's what my partner and I just did. 

All wise words as regards new build it is relentless and I have visited a friend of the missus in a tower block at the back of Jomtien near Suk. Road. 5 floors are designated condotel but it doesn't stop other rooms being rented out. Opposite is a huge Chinese food area and the coaches keep turning up spewing hordes into the place. The balconies have a glass barrier and you would only go out on them if you had a nerve which I don't. And the baht buses don't go down the soi so it's a long trek or a pirate taxi driver to get anywhere. 

 

As for older projects you get a better feel for what you have - we are in View Talay 2 which is great at the moment - but what happens if the market dies for sale and rent there is the cloud hanging over our thoughts. We will probably sit on her hands for the 3 month over-winter and see what happens. 

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41 minutes ago, geisha said:

BEautifulthailand99, I stay through the winter in Jomtien, near the night market. .I love the area for the Rompo market nearby and its location near the baht bus, bus station, Tesco’s etc. I don’t go to the beach for obvious reasons, but  my condo has three pools. Nearby are the awful high rise condos and the Caribbean on it’s way up. The high rises are empty as are nearly allnew condos .  I would not buy mine, as it’s badly built and things keep falling off! I was planning on buying a nice studio in a similar area , but , having thought about it , and the baht , I have decided not to. It’s easy to rent. In your position, i would sell your present condo ( if possible) and buy a solid quality place in a small building. I liked the ones next to Rompo , the names on the tip of my tongue, ( there’s a few in  Jomtien and Pattaya) . GOod luck.

Many thanks for that , I know the area well - it's good , loads of Russians but they are trouble free if somewhat surly. They tend to live in what I call the prison condos - there are three cheek by jowl at Jomtien beach Condo. They look grim but are probably  cheap and cheerful is what you are after. I like your comment of a good quality place in a smaller building - it's something we will explore further. In China all property is sold on a 70 year lease from the government and the prices in major cities are at London prices so Thailand is cheap as chips in comparison. Whatever we decide there is absolutely no hurry at the moment. 

 

Image result for Jomtien beach condominium

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5 minutes ago, wolf81 said:

Back when I stayed in Pattaya (Jomtien) I initially stayed in a View Talay condo, which was a very nice experience I might add. Later on I looked with my girlfriend for a cheaper condo. I visited a few condos in the Jomtien areas and the state of some condos did make me scared. Some condos couldn't have been that old and must have looked great at one time, but certainly wouldn't be places where I would like to live now. Some of those condos looked a bit like derelict buildings.

 

Still I'd like to buy a condo in the future at some point, but I feel one shouldn't by too quickly. Do some proper research. Perhaps live for a year in a condo building to experience the neighbours and area around the condo, to get a better feeling of how things are handled around there. 

 

I feel it's probably a good idea to buy some oceanfront condo though, seems to me those are most likely to keep value because of the view. Especially if many nice shops, restaurants and good transportation is nearby. Perhaps owners of these condos would also be more inclined to keep paying maintenance payments on time, since those kinds of condos might also be easier to rent out.

 

However I also feel a worldwide economic crash could be due anytime soon (for many reasons I won't go into right now), so it's probably best to wait with buying anyway until some people might be forced to sell cheaply, which is more likely to happen after an economic crash.

 

Apart from that, I am not sure if Europeans will be able to still visit Thailand en masse in the foreseeable future. I feel EU policies (e.g. mass immigration) will put a lot of pressure on the welfare state and this will force national governments to increase taxes and reduce the coverage of the social safety nets. People will need to pay for more things (e.g. some medicines) by themselves as less and less things will be covered by national governments over time. 

Thanks I think you're right about oceanfront but we won't be wanting to rent out. Rents seem to be tumbling from 10k+ for a studio to some I've seen at 7.5 so it is a buyers/renters market for sure. 

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