Exact Address: 44/3 Soi Thong Lo, Khwaeng Khlong Tan Nuea, Khet Watthana, Krung Thep Maha Nakhon 10110, Thailand
We were introduced to Just A Drink (Maybe), a nice little cocktail bar by a very good friend of ours. This is my interview with the boss of the place, Herman. He is from Taiwan and he was really helpful and friendly in introducing the various gin cocktails to us. I personally am not a gin person and am usually more of a beer person but I have to say that his gin cocktails are really good! This is the type of place that I can really see myself hanging out at in Bangkok if I were on a holiday. Bangkok has turned into a place I come to for work and I hardly get to spend a nice night out with friends but I was so glad that I got to know about this hole in the wall cocktail bar.
From the outside, you would never guess that this particular street would house a place like this. This part of Thong Lor mainly houses residential landed properties and many of the wealthy Thais reside in this area. Many of the bungalows in this area are exceptionally huge and grand. To many, the heart of Thong Lor is located around Thong Lor Soi 10 where the area is littered with high-end bars, restaurants and cafes. Thong Lor Soi 1 is somewhat in the middle of Thong Lor BTS and Thong Lor Soi 10. Our taxi driver who brought us to Just A Drink (Maybe) relied on my phone’s Google Maps to get to this place. It is not difficult to navigate to the bar but when you are along the street, drive slowly. Our driver overshot by a couple of metres as the place is not conspicuous. However, once you enter, the deco and feel of the place are really welcoming. The staff are friendly and the boss, Herman, extremely patient with introducing us to the menu and educating us about the different types of gin.
Here is my interview with Herman:
What made you come to Bangkok?
Well, it’s really simple. I love Bangkok and before I moved here, I come here every holiday season and about 4 years ago I decided to move here for good. I wanted to live and explore life in Bangkok.
Where do you live in Bangkok and why do you choose to live there?
I have been living in Bangkok for over 4 years and for the first two years I lived in Sathorn but since last year I moved to Thong Lor where my bar is. I think these two areas, Sathorn and Thong Lor are very unique. In Thong Lor, you will get more locals who are from the high-society of Bangkok as well as wealthier expatriates. Sathorn is a more relaxed place and the lifestyle is different from Thong Lor. Both places are pretty nice places to live.
What are the biggest challenges that you face as a foreigner working and living in Bangkok?
The culture shock! Language-wise and culture wise. This is why I am learning Thai. You do not need to speak Thai in Bangkok but it will help if you do. In fact, it will help a lot if you could speak just basic Thai so that you can communicate with the locals. As for culture shock, it is the same everywhere when you first move into a new city. You will love the city but when you are living in the city, you will experience it in a different light and that is the culture shock that I am facing. Not in a bad way though. It is different in a fun way.
How do you spend your free time in Bangkok?
I go to the gym, hang out with friends, go out for brunch, go to bars, check out some new restaurants. I try to live as local as possible.
Which location in Bangkok do you think are the growth areas in terms of population growth, business and inflow of foreign talent?
There are mainly two central business districts (CBDs) in Bangkok, one around Asok and another in Sathorn. However, I think that there are more people moving into Ari. That is a really good area which investors could explore. There are many hip cafes and night stalls. It is very different from the traditional areas like Thong Lor and Sathorn or the usual places along the Sukhumvit Line. Ari is a really cool place to live in my opinion.
In the time that you have spent in Bangkok, what are the changes or improvements you have seen in the city?
In the four years that I have been living here, I keep seeing condominiums and shopping malls being built almost every day. I do not know how many shopping malls do we need in Bangkok and as we speak, a new mall just opened across the river called Icon Siam. I really do not know when will they stop building but that is Bangkok currently. It is just different every day.
Where do you think is a good area to purchase property in Bangkok?
I would suggest from Phrom Phong to Ekkamai, close to the BTS line and the Sathorn area.
Will you retire in Bangkok and why?
I am still considering. Maybe I will retire in Taiwan which is a nice country. I am here because I don’t favour the economy there but when I get enough money I’ll move back to Taiwan probably. I will maybe keep Bangkok as a base. I will have two homes. Here and Taiwan.
And that wraps up my interview with Herman, the owner of Just A Drink (Maybe). I think that the bar scene in Bangkok is really vibrant. There are many entrepreneurs out there taking risks and this is a direct benefit of having a lower business running cost as compared to places like Singapore and Hong Kong. This coupled with the fact that Bangkok is a very cosmopolitan city and the most visited city in the world, it just turns into this melting pot of culture and this resonates in the food and beverage scene in Bangkok.
If you are in Bangkok and would like a nice, pleasant place to hang out with some friends, do visit Just A Drink (Maybe).
So you would like to ‘flip’ your Bangkok property. (flipping means to sell the contract of the property you purchased before the condominium completes)
Firstly, we would suggest that you should not be buying a property with ‘flipping’ as the main motivation. Go back to the fundamentals and look for good properties that are in good location and will be easy to rent in the future.
Truth be told, we do have a number of clients who managed to ‘flip’ their Bangkok properties but we never recommend a purchase to clients with ‘flipping’ as the end goal.
A lot of it will depend on the market conditions also, which is something beyond our control.
As a guide, we will suggest that you go for developments that are not too large or mass market. This is because, in order for you to be able to ‘flip’ your property, the foreign quota will have to first be sold out.
The second thing to note also is for good developments, developers tend to sell their units in phases, increasing the price with each later phase. This will, in turn, give clients an extra boost if they are the earlier buyers and are looking to sell the property subsequently.
Thirdly, we will suggest that you stick with the reputable, public listed developers. These developers, such as Sansiri, Ananda, Noble Development, etc have a wide global outreach. As such, it is more likely potential buyers will only look at developments on offer from these developers. And if the particular development they are interested in is already fully sold out, the only way for them to purchase a unit will be to get one from the secondary market. Then the chance for you to ‘flip’ the property for a profit will come.
In conclusion, we do not advocate clients to purchase Bangkok property with only a short-term horizon in mind. Focus on the fundamentals and when the right time comes along, you will get the opportunity to sell the property quickly for a good return on investment.
The cost to ‘flipping’ a property in Bangkok is relatively low. All you have to incur is the agent’s commission and the administrative fees for the change of contract. Taxes are not applicable before the completion of the property.
Q Sukhumvit is a condominium project developed by Quality Houses. The condominium is located right next to Nana BTS. In fact, it is linked to Nana BTS via a link bridge. Residents can get to Q Sukhumvit in less than 10 metres after tapping out from the station. This development is the luxury category and caters to the wealthy Thais and expatriates living in Bangkok. The development is 42 stories high and consists of 273 units. It is located one BTS Station away from Asok and three stations away from Siam.
New mortgage curbs could shrink domestic demand as a shift to foreign buyers raises other concerns, says CBRE.
Uncertainty is looming in the Bangkok residential property market, according to CBRE, the international property consultancy. Although developers have recently increased launches of condominiums, sales to Thai buyers have slowed in some locations and are likely to slow further with the coming imposition of tighter mortgage lending.
Some developers are trying to find locations where there is real demand from Thai end-users and to develop projects that buyers can afford, CBRE says. Others have increased their reliance on sales to foreigners, even though there is uncertainty as to who will be the final occupant.
The downtown expatriate rental market is stable, but CBRE believes that the local rental market in midtown and suburban areas is quite flat, so buy-to-rent investors may not achieve the yields they were expecting.
The Bank of Thailand recently imposed tighter regulations on mortgage lending by reducing loan-to-value (LTV) ratios for certain categories of purchasers in an effort to curb mortgage and property market risks and improve housing loan quality.
Effective from April 1 next year, these new measures will favor first-home buyers with genuine demand, as opposed to buy-to-rent investors with multiple outstanding mortgages who are searching for yield.
Although the new rules will not force developers to collect minimum down payments at contract signing, they will be encouraged to collect higher down payments to reduce the risk of loan defaults upon transfer. This will reduce the demand from speculative buyers, as they will be required to pay up to 20-30% down instead of 10-15% now. These measures will certainly cool and stabilize the overall market.
With domestic demand expected to shrink as a result of the mortgage restrictions, CBRE foresees a domino effect: developers will further shift their reliance towards foreign buyers, who purchase primarily with their own funds, as all the money must come in from abroad in foreign currency to comply with foreign condo ownership regulations.
CHINESE BUYING IN BULK
Many developers have already increased foreign sales, particularly to Chinese buyers, both in the form of individual purchases and bulk purchases by Chinese property agencies. Several projects have reached their foreign ownership limits (49% of the saleable area), something that used to be a rare occurrence.
“This further raises our concerns about whether high reliance on foreign sales is positive,” said Aliwassa Pathnadabutr, managing director of CBRE Thailand.
“It is still uncertain whether these foreign buyers will transfer title if they are speculators, and there is no clarity on who will live in these units once construction finishes. Most of the foreign buyers are investors, and we doubt that they will live in the units that they bought.”
According to a survey by CBRE Research, roughly 7,200 units were launched in the downtown area in the third quarter of 2018, compared with just 1,300 in the first half of the year. Total units launched downtown in the first three quarters are up 8% from the same period last year.
The average asking price of units in freehold condominium projects under construction (high-end and above) in downtown Bangkok edged up 1.7% year-on-year to 277,000 baht per square meter. CBRE does not believe these prices will drop, except possibly in a very limited number of completed projects with a lot of unsold inventory.
According to developers, sales of under-construction condominium units in the downtown area have dropped to 67% of the total available from 77% in the same period last year. The outlook is for sales to be relatively slow with buyers being more selective, especially for projects that are asking for more than 300,000 baht per sqm.
CBRE Research reports that a total of 18,200 condominium units were launched in midtown/suburban areas in the third quarter, the highest since the third quarter of 2013. The total for midtown, however, was down 4% from the same period last year.
Developers are now focusing on locations along future mass-transit lines such as the extensions of the BTS Green Line and MRT Blue Line, as well as the under-construction MRT Orange, Yellow and Pink lines.
The average asking price of off-plan condo units in midtown/suburban Bangkok increased 5.6% to 99,700 baht per sqm. The sales performance of more than 200 projects under construction was 71%, compared with 59% in the same period last year.
TRANSFERS UNCERTAIN
CBRE attributes the improvement in sales performance in midtown/suburban areas to block sales to Chinese property agencies, though it’s uncertain whether these sales will actually translate into transfers at completion.
With rising supply and uncertainty about demand from domestic end users, the outlook for the condominium market has become more uncertain.
In the downtown market, developers may have to revise their price expectations or focus on central locations with slightly cheaper land such as Sukhumvit Soi 63 (Ekamai) rather than Sukhumvit Soi 55 (Thong Lor).
The Midtown/suburban market will have to be increasingly reliant on Thai end-user demand for projects where buyers can get a mortgage, with fewer speculators and buy-to-rent investors.
In the downtown expat rental market, the number of expatriates with work permits increased by 2.7% in the third quarter and there was no change in monthly residential rental budgets. The market situation overall remains unchanged with limited new apartment (single ownership) supply, but increased condominium supply.
CBRE estimates that 30-40% of the new condominium supply will be offered for rent by the individual owners when the buildings are completed.
Question: Can foreigners buy landed property in Thailand?
Answer:
Strictly speaking, foreigners can only own condominium units in Thailand. Landed properties are reserved for the Thai locals.
However, some foreigners have worked around this by buying landed property under a nominee structure. They create a Thai company with a nominee Thai director and with this company, they proceed to purchase landed property with it.
However, we strongly discourage anyone from taking this route. The intent of the Thai government is clearly to allow only the Thais to purchase a landed property. By taking advantage of this loophole, you run the risk of running afoul with the Thai government.
Foreigners, however, are allowed to get landed property on long-term leases.
In conclusion, foreigners are NOT ALLOWED to buy landed property in Thailand. As a foreigner, you should stick to buying condominium where you can legally own the property without encumbrances.
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