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THAILAND CONDO SITUATION 2008
Please remember the articles we publish some are written by Property Managers/ Companies who inflate the situation in Thailand for there own gain. eg Pattaya property when you see the numbers of foreign realtors have inflated the property market to overheating. Thanks to the Thai Govt they have made the best decision to curb foriegn ownership in land as it is these foreigners who inflate the property markets for self gain.
It is a good time to buy property in Thailand IF YOU HAVE EXPENDABLE CAPITAL ONLY. Bangkok Bank will lend only to elligilble business owners & property prices are now dropping due to the insecurity of the present economic situation; the US sub prime which hasn't really kicked in in Thailand as yet. This will mean even better bargains as people need to service loans and interest rates are climbing around 7.5% now. Not only this the cost of oil, fares, food to utilies is also climbing so its a buyers market or will be for foreigners who have that cash to buy. However only if you have the spare cash OK but don't look at condos as a cash earning venture unless you get a bargain from an outgoing expat etc. The worse hightmare will be the Management themselves in Thailand as many condo complexes have bad management and sinking funds are not used appropriately. Don't allow Estate managers to hold your titles as they change the circumstances not to your benefit anytime as well as use your titles for further collateral. When buying check out and talk to other owners in the building and especially about maintenance & other projects the owner has. He/she may have over committed?? on new developments and once you pay deposit theres no comeback. Thailand SET index has also been dropping as foreign investment is tending to shift to other countries but we have yet to see any major upheavals.
Swedish Homebuyers Cheated For Millions In Thailand. Source: Scand Asia Apr 26 2008
Up to 50 Swedish families and disabled people have been cheated in a property scandal in Thailand. The investors were dreaming about owning a peace of paradise in Bang Phra, but according to the Swedish tabloid Expressen they lost millions of Swedish Kronor in deals with Thai Care, a company dominated by the Swedish citizen Mr. Curt Timhede.
The sale of three rooms apartments and villas started in 2006. Costumers liked what they saw on exhibitions and the Thai Care website. Swimming pool, rehabilitation center, tailor, security, everything was designed to suitable for families with children, people with handicaps, and elderly people. The buyers felt secure with the Swedish speaking sales staff. And happily they made the needed payments up front, to get closer to their dreams. According to Expressen, the money started flowing the very same year, when every signature from a buyer was followed up with a down payment from 100.000 kronor up to 1.000.000 million. The selling continued, and therefore the money kept flowing in 2007. Expressen mentions a total of 30 million Swedish kronor. The first apartment was promised ready in the middle of the 2006/ 2007 season. But one month after the other went by, and nothing happened. At that time, the buyers had no ideas about the financial disaster. Curt Timhede, had, according to Expressen, previosly gone bankrupt three times in Sweden, therefore has a huge debt to the Swedish State (Kronofogeden). And he never told his costumers, that the money was gone down the drain, out of the project. Living in a village called Bang Sare, he just kept silent. To the Swedish tabloid he insists, that it’s not only the costumers who have been lured. He is innocent. Its other people, who destroyed the project. Mr. Timhede claims, that he has been cheated by his Thai partners. Partners he had to involve, because it’s illegal for foreigners to own land in the Kingdom. The Swedish business man says that the problems are rooted in the cooperation with a mysteries Thai woman, whom he had known for several years. Mr. Timhede, his to sons who are Swedish citizens like him self, and the Thai woman registred a company. And, again, according to the Swede, and the Thai woman’s husband faked Mr. Timhede´s signature. All of a sudden, the Thais were in total control. If there still was even the slightest hope among the buyers to at least get some of there money back, it’s now gone for ever. The official papers at the land department in Thailand, says very clearly that the ownership of the land is taken over by the bank, who did lend out the money at the beginning of the project.
Beware as its not the first time when foreign Business partners have been cheated by Thai partners. It has happened a lot. Never have a limited Partnership in Thailand and make sure the Lawyer you use is straight? Go to www.chiangmailaw.com for any help
Property firms prepare for ear of hot competition
Campaigns already promise attractive deals for investors, and energy-efficient houses seem to take centre stage
Property firms are preparing for another year of intense competition and are planning marketing campaigns to promote their residential projects in hopes of achieving 15-20-per-cent sales growth this year.
Major property developers are working on a wide variety of plans to capture their share of the Bt200-billion property market this year. Colourful marketing campaigns are being devised, with each developer setting a target of 15-20-per-cent growth this year.
From houses designed to save energy and protect the environment to advice that investing in houses gives a better return than keeping money in a bank, developers are preparing to maintain the intense competition that coloured the final months of 2007.
Last year's sluggish economy forced all property firms into heavy marketing activities and big promotional campaigns that reached a peak in the final quarter. With all firms expecting 15-20-per-cent sales growth this year and some having also set targets for next year, there is no end in sight to the cut-throat competition.
The market has now moved firmly beyond the notion that consumers want houses in which to live. Both low- and high-rise projects these days are seeking buyers who want residences as investments, and developers are offering after-sales service that includes finding tenants to rent the properties of new buyers.
The strategy is seen as creating added value to accelerate the performance of property firms, and developers using it successfully include LPN, Asian Property, Plus Property and Preuksa Real Estate. Some have established separate business units - called resell units - to help customers find tenants to rent houses. In some cases, the resell unit begins work at an even earlier stage.
Preuksa Real Estate deputy managing director Prasert Taedullayasatit says the unit can help customers sell their existing homes if they want to buy in one of Preuksa's housing projects. Apart from increasing convenience to customers, it also supports the company's business and represents a major revenue channel.
"We have more products now, particularly condominiums. Therefore, we need to have a tool to support the business. The resell unit will be a major support tool. Today, they're just a department [of the company], but in the future they may transform into a new company," Prasert says.
Many property developers have also focused on websites, which have proven to be an effective marketing channel.
The developers are able to display their model homes, the land, locations and many other potential attractions before customers visit the physical site. Websites are also cheaper than leaflets, brochures or direct mail and can reach precise target groups.
Suparat Veerakul, vice president for corporate communications at Land and Houses, says his company's website also provides information on consumer demand and allows it to customise houses for specific clients.
"We use integrated marketing tools, but next year we plan to focus more on marketing through websites. Although we allocate only Bt7 million for the websites, they can reach exact targets. We've already seen good consumption trends from this marketing channel," he said.
The proportion of Land and Houses' sales made through websites was 10 per cent last year. Already, this figure has risen to 20 per cent and the company expects the proportion to reach 25-30 per cent this year.
With limited consumer purchasing power, marketers feel they must launch products this year with campaigns that make consumers feel comfortable about buying and that it is worthwhile paying for a residence instead of leaving their money in the bank.
Sena Development was the first developer to initiate this kind of campaign, by joining with the Government Housing Bank (GHB). The campaign features new investment alternatives for customers who are hesitating about buying houses out of insecurity arising from economic uncertainty and an unclear political situation.
All houses selling under the campaign are sold at initial prices for ready-to-transfer homes. The bank is asked to extend by two years the period over which customers will be paying instalments. For example, if the contract is for 20 years, customers buying under this campaign will be able to pay instalments over 22 years. However, the interest calculation begins in the third year, so customers pay total interest applying to a loan over 20 years. For the first two years, the customers need not pay instalments to the bank.
Customers with a good credit history can also save the first two years' instalments with the bank, so that they can access a big chunk of money with which to reduce the principal of the original mortgage. For example, if they save Bt10,000 over the first two years, they can borrow Bt240,000, which can be used to reduce the principal sum of the mortgage, resulting in much lower repayments in the third year and thereafter.
Another alternative begins with offering customers two years' ownership of a new house without any payments. Customers may accept this deal on its own or also lease the house, collecting rental fees to enhance their ability to reduce their bank loan.
The campaign, which applies to Sena Development's six housing projects, is still available. There are two projects left with a total of 50 units, including single-detached houses for between Bt2.6 million and Bt5.4 million; Sena Grand Home Rangsit, with homes from Bt2.6 million to Bt6.4 million; Sena Villa Ram-Indra, priced at Bt2.7 million to Bt4 million; and Ruamfan townhouses for Bt1 million to Bt3 million.
Tararom Enterprises is conducting another campaign featuring purchases for investment at its 40-unit Parkway Place project on Ramkhamhaeng Road. The project's "double-front shophouses" allow customers to separate a rental area from the residence. Each house is priced at Bt4.6 million. After a down payment is made, contracts are signed and the property transferred. The Bt3.2-million loan with interest at 8 per cent over 20 years requires monthly instalments of Bt27,000 to the bank. With an ability to rent half the property for about Bt15,000 to Bt20,000 a month, customers can use the rental fees to cover up to 70 per cent of their instalments.
New houses designed with an "environmental preservation" concept are another attractive choice, because they tap into the hot social issue of global warming. Property developers are now joining environmental organisations to build awareness of the problem.
The Energy Ministry said 25 per cent of all energy consumed in Thailand last year was used by businesses and residences. This sector was third in energy use, behind the transport and industrial sectors. Property developers themselves are tending to consume more and more energy, with customers inevitably shouldering increased costs, both directly and indirectly.
To ease the problem in long run, the ministry's Alternative Energy Development and Efficiency Department has organised a competition for energy-efficient houses. It began in 2005 with a campaign for all housing developers to apply thermal considerations to designs. Up to now, more than 90 housing designs have been entered in the competition, and developers are seeing it as an opportunity to promote themselves should they win.
"Property Perfect will use environmental and energy-preservation issues to build awareness," said Property Perfect deputy managing director Teerachon Manomaiphibul. "We will have to arrange big events."
As well, all developers are expected to incorporate environmental and energy-saving considerations in their marketing and brand-building strategies this year.
Supalai president Prateep Tangmatitham believes all developers should join together in the interests of preserving the environment and that the ministry's competition should be expanded to include high-rises, such as office buildings and condominiums.
French development-assistance agency Agence Francaise de Developpement (AFD) has shown its willingness to fund housing loans totalling Bt2 billion with low interest over 15 years for consumers borrowing to buy energy-saving houses. It has discussed the issue with the GHB and three representatives from the property sector.
The discussion followed the signing of a memorandum of understanding between the Neighbouring Countries Economic Development Cooperation Agency and the AFD.
GHB president Khan Prachuabmoh says the bank plans to consider other solutions to support consumers wanting energy-efficient houses. It could separate its own budget for housing loans or combine it with the AFD's financial support to expand the sum available for loans. It will also work with developers in using materials for constructing environmentally friendly houses and ask scholars from Chulalongkorn University to help by studying the details.
"It's a big issue," Khan says. "We must help in the campaigning. Construction costs may increase 5-10 per cent, but if we can then save up to 30 per cent in energy costs, I think it's worthwhile."
Thai Condominium Association director Athip Peechanont agrees with the bank's plan to offer low-interest loans as the basis for a campaign on the energy-efficiency issue. If the plan becomes reality, developers will have to set aside part of each new project for energy-efficient residences that comply with its requirements.
Property reporters The Nation
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