99% of Condos in Bangkok have a Management team that work in the Juristic Office whom are there to take care primarily of the building and it’s inhabitants, be they condo owner occupiers or just tenants living on short to long term rentals in Bangkok. However unfortunately given the nature of the position they occupy, Juristic Managers and their staff have plenty of opportunity to abuse their power.

Before I go on, I want to make it clear that although we are a Bangkok Property Agency, and yes the power abuse exerted by Bangkok Condo Juristic Managers is detrimental to our business a lot of the time, I am not writing this as a worker for a Bangkok Real Estate Agency, but more as a landlord of a few Bangkok condos. As a landlord I am acutely aware of how the actions of such people forms an unwelcome blockage in the Bangkok Real Estate Market and reduces the chances of landlords renting or selling properties and potential clients finding condos to rent or condos to buy.

So what are the duties of a Bangkok Condo Juristic Officer or Manager?

Juristic Managers and the staff that work with them are employed to run the Bangkok condominium buildings they are stationed at, but what do these duties entail?

1. Taking care of the physical maintenance of the building
2. Helping residents of the building, where they are renting condos or own the condos they live in
3. Organizing any extra utilities or services required by the residents, such as UBC TV installation or Internet Installation
4. To organize the repair of any communal or structural features that require extra work, such a swimming pool tiles, or light fittings in the corridor

So how to they get paid?

Well every Bangkok condominium building that employs Juristic Management teams also imposes fees upon the owners and renters in the condominium building. These fees are imposed in two ways:

1. Condominium Sinking Fund – this is paid for upon the transaction of the condo unit from the developer to the first owner. Fees for this fund vary, but in the current Bangkok condominium market they are often between THB 500- 600/ sqm that is contained the Bangkok condominium unit the landlord has purchased. This fee is often a one-off payment and unless there is some large condominium structural work that is needed in the future, they are never asked for again.
2. Condominium communal Fees – these are different. They are cheaper, but are not only constantly imposed, they can and often do increase over time as maintenance fees increase and damages need to be repaired. Current Bangkok condominium communal fees imposed in the Bangkok Property Market are on average THB 35 – 50/ sqm/ month.

So these Bangkok Property fees are there to pay for not only damage and wear and tear of the Bangkok condos, but also the pay for the Juristic Managers and their team to perform their duties.

So how do they abuse their juristic powers?

Unfortunately given the level of closeness that Bangkok condo Juristic Managers have with the buildings they work in, they can develop a knowledge of the units within the Bangkok condominium building and know exactly when which unit is for sale or for rent or is already occupied.

So how can they use this knowledge to abuse their power?

Landlords and condo owners inform Juristic managers of the current status of their units, in good faith. For example a landlord has a unit available for rent he will inform the Juristic Manager and pass him/ her some contact details such as a telephone number. They do this in good faith that the Bangkok condo Juristic Management team will pass this on to potential clients and Bangkok Property Agents so that they can rent out their condo.

Unfortunately many times Juristic Managers then use this knowledge to their own advantage and do not pass the information to Bangkok real estate agents unless they are given a commission in a possible deal. However this just places a blockage in the system as Bangkok property agents then just show their clients alternative condo units, and so the condominium unit remains empty when it could be occupied and a tenant happy, the property agent happy and the landlord happy.

Of course the landlord is never informed of the loss of this possible client so none the wiser goes on happily paying his/her Bangkok condominium communal fees and does not realize they are partly paying for someone who is indeed hindering their progress of their real estate investment in yielding better results.

So what can be done?

Well you could end up reporting rogue Bangkok condo Juristic Managers to their superiors or the police, and this would be no bad thing for both you and the other residents of the building, as well as the larger Bangkok property market as a whole. However we are of course not expecting you to do this.

An easier and more palatable solution is to make sure that you inform as many Bangkok property agents as possible of the status of your property, and make sure your property is properly exposed to the Bangkok Real Estate market as a whole. This way you will give your self more chance of achieving the objectives and get the returns on investment you want.

Finally do not rely on sole agents as well, as this only makes you vulnerable to losing out due to poor working practices. Let as many Bangkok Real Estate Agencies know the details so that you may get the best possible collective exposure and service from the Bangkok Real Estate Market.

If you haven’t head On Nut the last stop on the Bangkok BTS Sukhumvit Line, has recently experienced a major revival. With 6 new BTS stations nearing completion on the Sukhumvit Line spreading as far as Bang Na, On Nut is set to become a new centre of East Bangkok.

With a Tesco-Lotus in On Nut area, a Carrefour on On Nut road, Sukhumvit soi 77, and shops, highway links and of course the BTS On Nut station, condos have been developed in vigor to satisfy the growing demand of those who want to live on Sukhumvit or close to the BTS in Bangkok.

So what’s on offer, and why has this district of Bangkok become so popular?

Well let’s start with price, Bangkok rental prices as people who live in Bangkok know can be at their highest along Sukhumvit. For example mid-Sukhumvit can easily demand THB 500/sqm/month and some Grade A rated Bangkok condos and Bangkok apartments can be even more. However in On Nut many of the Bangkok condos and Bangkok apartments on offer have retained sensible prices and approx THB 250-300sqm/month is a regular price in this area.

Looking at Studio condos and Studio apartments in On Nut, we can see two great examples of why living in On Nut offers residents both convenience and value for money, as well as quality.

Green Bells is within a 5 minute walk of the On Nut BTS station and offers residents a swimming pool, and quality finishes in this apartment. A brand new Bangkok apartment, residents can be in central Sukhumvit in just 10 mins.

With prices starting at just THB 9 000/month for a Studio apartment, this really is good value for quality on Sukhumvit road.

http://www.easyhomes.tv/property/green-bells-1106

My Condo, is a Bangkok condo that was completed at the end of 2009. There are two My Condo condominium buildings in On Nut. One is located in Sukhumvit soi 52, and the other close by in Sukuhumvit soi 81.

These two buildings are identical in every way, in terms of lay-out, units and pricing. And the value is just as good as Green Bells. With Studios starting at THB 9 500/month, My Condo 52 and My Condo 81 offer residents a lobby, car parking, 24 Hour security and a gymnasium fitness room.

If you are looking for something larger than a Studio, but still want to pay under or around THB 20 000/month, then one again On Nut can offer some great Bangkok condo and Bangkok apartment deals. Here are two below:

The Roof Garden is a refurbished condo in Bangkok that can offer a potential resident great value for money considering the space and quality on offer for such a low price. In central Sukhumvit it is difficult to get a condo unit of over 40sqm for THB 20 000/month or under, but at The Roof Garden, one bedroom condos start at just THB 16 000/month and can offer the resident up to 60sqm in stylish chic modern condo unit. With a full kitchen area with an oven and stove, a full living room and balcony. Also a major plus for Japanese clients is the inclusion of a bath-tub in the en-suite bathrooms, a real rarity in modern Bangkok condos.

http://www.easyhomes.tv/property/roof-garden-1007

Perhaps at even better value is the apartment units at Methavanont Manor, an On Nut apartment block located within a 10 minute walk of the On Nut BTS station. A one bedroom in this traditionally designed, but very new apartment block will start at just THB 15 000/month and yet will still be 50sqm in size, ample room for a couple or even small family.

http://www.easyhomes.tv/property/mathevanont-manor-81

Finally are you looking for a two bedroom condo in On Nut?, then these two examples will hopefully catch your eye.

The newly built S-Condo is typical of the modern style and look of new condos in Bangkok that have opened in the last 5 years. Practical, well designed with a swimming pool and gymnasium on the roof. For just THB 25 000/month these 2 bedroom units can offer two equal sized bedrooms, two bathrooms and a soacious living room. All incorporate into a 75sqm condo unit.

http://www.easyhomes.tv/property/s-condo-854

And lastly, but not leastly The Room On Nut is another quality low-rise Bangkok condominium within a 5 minute walk of On Nut BTS station. These 58sqm units are small, but well designed with stylish fixture and fittings.

http://www.easyhomes.tv/property/the-room-sukhumvit-79-535

Priced between THB 25 000~30 000/month to rent, these are slightly more expensive than other Condos and apartments in On Nut, but the cost is justified by the location, and the proximity to the On Nut Sky Train station.

Looking to rent a condo in Bangkok or looking to rent an apartment in Bangkok can be a daunting task for the first time renter and recent arrival in Bangkok.

There are lots of stories and rumors of how Thai landlords and Thai landladies don’t refund deposits and how they treat tenants renting Bangkok condos and Bangkok apartments like rubbish. How properties will fall apart around you and how when appliances and basic necessities break, Thai landlords will not maintain their Bangkok Condo or Bangkok Apartment.

Well of course most stories are exaggerated and of course like in any market, the Bangkok property market is mainly run professionally. With plenty of competition from other landlords with Bangkok condos and Bangkok apartments, Thai landlords will often play it straight. However of course to be safe and secure, you are best dealing with a known and trusted Thai Landlord.

So how can you gain security and confidence in a Thai Landlord and know that Bangkok Condo or Bangkok apartment you are about to rent will be maintained properly and the contract signed with the Thai landlord honored? How can you know that you can trust the Thai landlord that owns your Bangkok Condo or Bangkok Apartment?

Well the best way to handle this is to of course contact a Bangkok Real Estate Agent, as they should know the Thai landlord they advise you to deal with. They should also be familiar with the Bangkok Condo or Bangkok Apartment you are interested in.

All well and good so far, but it is well worth doing further investigations, after all how well do you know your Real Estate Agent?

It is best to be aware that there are plenty of fly-by-nights, rogue traders and scam artists in Bangkok and unfortunately these people can slip into the Bangkok Property Market only too easily and prey on unsuspecting expats new to Bangkok.

Just because these people may know the locations and names of a few Bangkok Condos and Bangkok Apartments that may be of interest to you, does not mean that they have the credentials or commitment to provide a professional and proper service.

Beware of the Free-Lancers

There are unfortunately many expats residing in Bangkok with little or no income, they are desperate for a quick and illegal buck, and will unfortunately prey on the new and unsuspecting expat that has just arrived in Bangkok.

Sure they know the city better than the new arrivals, sure they can speak with some knowledge of locations and rental prices of Bangkok Condos and Bangkok Apartments in the Bangkok Property Market, but do they have any commitment to offer a full and professional service? The answer, unfortunately for the client that has just signed his Bangkok Tenancy Agreement with the help of this rogue trader, the answer is often….NO!

We unfortunately have come across many a client whom has become a Bangkok tenant with the help of a rogue trader and then come into difficulty as the tenancy agreement was not properly negotiated and then not surprisingly the Real Estate free-lancer has then gone missing and is not answering his phone calls.

What can the tenant do? Well unfortunately as the Bangkok Real Estate free-lancer was operating outside the umbrella of a registered Thai Company, and probably from no fixed abode and a pre-paid telephone number, there is very little the poor this poor expat client can do. He is then at the mercy of the Thai landlord and stuck in a Bangkok Condo or Bangkok Apartment that is perhaps unsuitable or is forced to leave his Bangkok Condo or Bangkok Apartment.

So what to look out for?

When you arrive in Bangkok and are looking to Rent a Bangkok Condo or Rent a Bangkok Apartment, then contact a registered Bangkok Real Estate Broker, with a registered Thai company. This will help give the protection you need, as you can be sure they have a registered Thai Company address and a Thai Tax ID number, all of these details can be handed to a Thai Lawyer if needed.

Ask to see proof of the Thai Company Registration Papers and Thai Tax ID Card before proceeding with the signing of your Bangkok Rental Contract, check out the internet for details on the company before agreeing to take one of the Bangkok Condos or Bangkok Apartments they offer.

Remember there are many rogue traders in the Bangkok Property Market, so please watch out and be safe rather than sorry before you agree to sign up to Rent a Bangkok Condo or Rent a Bangkok apartment.

Good luck in your search!

For those of use who live in the real world, and therefore the Capitalist World (the only form of human development that has any long lasting durability) we have to face the fact that with the Booms come the Busts, as with all aspects of life, with the Smooth comes the Rough!

We can’t have it good all the time and one can have too much of a good thing, so there have to be bad times ahead even in the best of times.

Ok enough with the clich?s, let’s get to the point. Bangkok and the whole of Thailand has just mimicked the rest of the world in that it has been a part of the Global Recession, a recession that has lasted in some parts of the World such as the US for 6 Quarters and in countries like the UK for at least 7 Quarters and is still not out of the woods.

Thailand, having learnt its lesson from the 1997 Asian Economic crash, where Thailand and particularly Bangkok was the catalyst in disaster has been better placed than the UK, US and Europe to withstand its own domestic recession, however as a modern global country, Thailand is of course dependent on and vulnerable to the successes and failures of the West.

Of course Thailand’s exporters such as those of Electronics, Cars and Rubber will suffer when the Western markets enter recession and this will bring a negative effect on the economy, particularly Bangkok’s which is the hub of all trade in Thailand. However Foreign Direct Investment (FDI) will also be affected and therefore expats living in Bangkok and potential immigrants to Bangkok will also be negatively affected.

International Property Agents have reported earlier this year that Condo sales to foreigners are down by 36% on last year, which is of course not good news for the market as a whole, especially when it is considered that up to 17% of condos in Bangkok are indeed owned by foreigners since the Condominium Act of 1997.

So by looking at the figures if just the reduction is Sales of Bangkok Condos to foreigners are taken into account, then the Condominium market as a whole has reduced by approximately 6%. However of course it is more than this as many Thais have not been buying, in fact Thailand’s largest developer LPN Development PLC has stated that in the first 2 months of 2009, Thai clients were looking but not buying. In fact they thought that property prices would drop considerably and so condos, town-houses and detached houses in Bangkok were not purchased. In fact the prices did not drop so much and so now there has been a realization of their mistake and now there is a relative buying frenzy in the last few months of this year. In fact projects like the Ideo in Wang Wien Yai, and The Citrine also located near to the Wang Wien Yai BTS station in Thonburi have sold out.

So the question has been answered….right?

Well not quite!

Yes there are lots of negatives, and of course by definition a recession or even worse a depression is not a good time for any economy. However it is also not all gloom and doom, as every cloud has a silvers lining (I will try and make this the last cliche for this blog ).

When recession hits it is a chance to reduce the also-rans in the market. And therefore the Bangkok market is left with far more quality rather then quantity as a result.

As the market is deflated, the banks who supply the blood to run the economy are the first to notice. Repayments are not made, and non-performing assets (NPA) are on the increase. Therefore Banks are reluctant to lend, to either developers or potential owners. This is going to have a short-term negative effect on individuals or individual companies, but in the long-term will be of benefit.

Only the Developers with low debt to equity ratios will be able to obtain money from the banks and therefore, many ‘first time’ or ‘relative amateur’ developers will not be able to obtain the loans.

In addition Bangkok Bank announced that Developers have to close on between 20-25% of units in their pre-sales before further loans will even be considered. Not only that but the location and quality of the buildings are also greatly considered in times of recession. Siam Commercial Bank have stated that the new developments they have been supporting all have to be within 200m of either a BTS or MRT station or a BTS or MRT line. And the quality should be such that the units can realistically sell for THB 100 000/ sqm, which represents the higher-end of the market.

So to summarize it can be seen by laying down the following criteria that only a few and choice projects will in fact be allowed to proceed in such tight market conditions:

1. Developer must be credit worthy and be of sound quality and reputation
2. The projects must be located in desirable and highly sought after areas (such as near the Sukhumvit BTS, Silom BTS or Ratchada MRT lines)
3. The buildings must be of high-end quality so that they can realistically attract buyers of up to THB 100 000/ sqm

So what does this mean to the medium term future of the Bangkok Real Estate Market?

Well it initially reduces the supply of properties in Bangkok and in particular condominiums in Bangkok. It seems just the best and most popular areas of Bangkok such as Sukhumvit, Silom, Sathorn and Ratchadaphisek will be significantly developed further in the near future.

Projects that have already started and have received banking approval will be finished in due course and will be of good quality. In addition as the developers have had to undergo strict financial tests to gain the loans they need, then clients that have invested in off-plan condominiums can be assured that they are likely to receive the property as planned.

Potential owners of condos too will be subject to strict investigations before they are issued with a mortgage and so there should be less defaulting on loans and the development of a sub-prime mortgage crisis, such as has been experienced in the West.

So all in all the future of the Bangkok Property Market looks good, with only the best developers being granted loans to develop condominium, townhouse and detached house projects near the Bangkok metro and transit systems. And in addition they have only been granted the right to do so when the buildings are of high quality.

Also with the US announcing its departure from recession and the other G8 nations (except for the UK) it looks like Bangkok’s market will move towards better times ahead!

Well as we near the end of the year, which a traditionally a time when the Bangkok Property Market eases of and waits for the start of the new year with the hopeful new wave of investment that accompanies the start of the new year (in normal times), we can have a look over the market this year.

First Quarter & Second Quarters

Well in the First Quarter of 2009, we were right in the vortex of the Global Recession, as some may recall March 9th was the real low point for the stock market’s of the world, and this of course was reflected in all Investment Markets as well as that of Real Estate in Bangkok.

The average Bangkok Condominium prices dropped by 15-25% depending on the location, quality and age of the buildings. And although this is always the best time to buy, of course very had the courage or conviction. Throw into the mix the strange character of the Bangkok Property Market, particularly in regards to Bangkok Condos, and very few purchases were made.

Many Thai Real Estate investors are indeed cash-rich and therefore very few have large costly an strenuous mortgages that they have to service, therefore if the market takes a dip, then they just sit tight and wait for the recovery. This attitude and situation is so alien to foreigners that we often have to explain to our clients why Rental Prices or Sales Prices are not being reduced to the levels they would deem to be sensible.

Anyway back to the market and in the first 6 weeks of the year the market was in panic mode, and this was reflected in attitude of virtually every client we came across.

Not only did they want down-size from a larger or more expensive property to a cheaper smaller unit in perhaps a marginally inferior location, but also they did not want to commit to even a 6 months Rental contract. A typical client who was perhaps living in a 2 Bedroom Condo in Sukhumvit and paying THB 40 000 for about 120sqm, would come to us prepared to downgrade to a 70-80 sqm 2 Bedroom condo in Ratchadaphisek area of town. Therefore downgrading on almost every front, in order to reduce their costs. However as I said they would want a 3 months contract as they thought they may have to leave Bangkok at any point.

Of course landlords were not interested in such a contract so it took long negotiations to talk them up to at least 6 months contract, which most were at least willing to do, if not reluctantly.

Increased Supply in the Market

Well the saying goes, it never rains but it pours! And that is true so often in economic environments, and the Real Estate Market in Bangkok is so exception.

First a brief bit of history: In 1997 Bangkok was heavily involved in the Asian Economic Crisis, which hit the Property Market in Thailand very, very hard. In fact from 1997 almost all private infrastructure development was halted as banks licked their wounds and large potentially impressive structures were left to rot in the Bangkok Sky Line. Therefore since 2003 when new properties started to hit the market there has been a huge up take of units from new developers and over 40 000 units have been released by developers over the last 3 years, most of them taken up by investors.

However the Global Economic crisis did have an effect on developers and has resulted in a mixture of:

1. Projects launches being cancelled,
2. Project launches being delayed indefinitely
3. Projects launches delayed until recovery looks possible
4. Projects already in production being delayed, whilst their clients’ cash-flow situations improve.

Two such examples Point 4 are The Wind on Sukhumvit Soi 23, Asoke, this project built by Major Development PCL and The Emporio Place built by TCC Capitalland PCL on Sukhumvit Soi 24, Phrom Phong.

Both projects are prestigious, both aimed at the higher-end of the market. Both were initially scheduled to be completed in the 1st & 2nd Quarters of 2009, but now they will delay completion till 1st & 2nd Quarters of 2010. This does not mean the projects have been abandoned in a similar fashion to developers in 1997, but instead work has just been slowed so that the market has time to recover before transfers are forced upon the buyers.

Third and Fourth Quarters 2009

However of course any crisis is always outlined by opportunity and sometimes delays work to one’s advantage. This applies to Asian Property PCL (AP) and an example of Point 3, AP had announced a brand new luxury condo to be launched in Oct 2008 on Sukhumvit Soi 28 near the The Emporium shopping center. They were toying with the idea of branding the condo The Metropolis Condo, a brand name they had never used before.

As the condo was in such a prominent location, this building was going to have to high-end and suitably highly priced. Therefore AP had to make sure the recovery was well on the way before the launch. Also in addition to design of the building and timing of the launch, they had to make sure that the building sounded as prestigious as it was, and therefore it was judged ‘The Metropolis Condo’ just did not cut it. Therefore given the success and reputation of 3 of their previous projects which had been well received by the market and were currently being enjoyed by their clients, AP went with the brand name ‘The Address’. After all “The Address Sukhumvit 42’ located in Ekkamai only 300m from the Ekkamai BTS station, ‘The Address Chit Lom’ located only 450 m from the Chit Lom BTS station and ‘The Address Siam’ only 400m from the Ratchatewi BTS station and all had impressed the Bangkok property investors who had been fortunate to buy the units.

The launch of the new building was made on September 2009 and “The Address Sukhumvit 28’ located 250m from the Phrom Phong BTS station was an instant hit. With over 400 units available to buy they managed to sell out all the 1 Bedroom units on the first day of the launch and almost all the 2 bedroom units by the end of the second day of the launch. In fact by the end of the second day, only 15% of the units remained available to buy! Quite amazing when it is considered that the average selling price was THB 150 000/ sqm, so an average sizes 50sqm 1 bedroom condo would cost THB 7.5m!!

Not only that, but AP have also launched “The Address Asoke’ located 50m from the new Makkasan Airport Link station, “The Address Sathorn’ near Surasak BTS Station and ‘The Address Phayathai’ again with a close link to the new express train line that goes to Suvanabhumi Airport . Again all these units have been selling well and have shown that Bangkok Real Estate is certainly in recovery mode.

Couple this with launches by TCC Capitalland, Major Development, Sansiri PCL, Lumphini developments and even more by Noble Developments it is clear that the developers see a trend of recovery in the market.

Summary

The last 9-12 months have been difficult and no one likes recessions or economic crisis, but unfortunately these are part and parcel of growth and development. But as long as Landlords, Tenants and Developers adopt adequate strategies to deal with the situations, then results can still be achieved.

And in the grand scheme of improvement in the Bangkok Condo and Bangkok Housing Market, some times a bit of a crisis is a good thing. It allows the market to cool down, not over heat and take stock of the situation.