Finally! A property broker that admits Bangkok’s high-end property market is struggling. When you look around Bangkok today there are several new condominiums costing THB 100,000 – THB 150,000+ per sqm, that have all been fully sold out, but a quick glance inside the buildings and you’ll find that the majority of units have very few actual tenants living there.
There’s a very simple reason for this, the wealth in Thailand is concentrated within a very small percentage of the population, I remember a factoid that 0.7% of the bank accounts in Thailand represent 80% of the value of deposits here, but please don’t quote me on this.
Because of this, condominiums can be 100% sold out and yet remain largely tenant free. Most of these buyers do not need capital immediately and are willing to wait decades before achieving a return on their investments. This demonstrates that there isn’t a real demand for these price point units/developments in Bangkok. With the average salary in Bangkok @ ~THB 30,000/month, it is impossible that they will be able to purchase a small 1 bed room (~35sqm) costing THB 3.5 mn, @ a 90% LTV, 30yr mortgage, results in them paying ~THB 21k monthly to the bank. You can see how this is a problem.
So no, we aren’t surprised that there is a problem, this is why we are avoiding a property company like Sansiri Plc despite good management and the stocks cheap valuation but their business is just far too focused in this area.
As the high-end condominium market remains sluggish, there are a number of resale units available in the Ekamai area, and the developer Gaysorn Property Co has had to maintain unit prices of its Mode Sukhumvit 61 since its launch in March this year
Source: Bangkok Post : High-end condo market losing steam http://bit.ly/okPjDB