Udon Condominiums

[JimboPSM]

As condominiums are a new concept in Udon it is difficult to know how successful they may be; in my opinion there is a pent up demand for units at the right combination of cost per square metre, quality build, good management company and ongoing management charge.

The economic climate has changed (probably for at least the next decade) and the potential customers (both Thai and western) are most unlikely to be willing to pay the prices that formerly produced the very high profit levels condominium projects in the past used to obtain – they are no longer realistic today (if speculators have been buying the existing projects in bulk they may well get their fingers burnt).

The projects that I have looked at don’t appear to be sufficiently large to offer the economies of scale to provide value for money – although the market demographics are quite different, when you look at what you get for your money with a condominium and compare it with what you get with a house, the condominium units suffer badly.

From the plans I have seen (which are not all of them) the room sizes in most of the units are too small (certainly by western standards) and there are not enough units to achieve the economies of scale that is needed for a good management operation at a reasonable management charge.

Compared to condominium prices (in what some may consider to be more attractive locations) such as Bangkok and Hua Hin, the cost per square metre and the facilities offered appear to represent poor value for money.

It may be that local planning regulations and the proximity of a combined civilian and military airport may not allow the building of sufficient numbers of floors to achieve the economies of scale that would make for competitive pricing with Bangkok and Hua Hin – although I would have thought they could go at least as high as AEK Udon Hospital provided they were located at least as far away and similarly displaced from the approach and departure paths.

[KHONDAHM]

I tell ya...IMO, the best location in the city would be the road which runs parallel to the train tracks across from UDT. I could imagine that whole road being widened with condo buildings running along the east side of that road with additional parking on the west side and a walkway bridging it to UDT...everything would be right there. Shopping, hospitals, train, bus station, schools, park, night market, views east and west, etc., etc...

The Mrs. tells me that land is government-owned, but sooner or later...

Ah, well. We decided to take the investment plunge if something comes on the market we like at a reasonable cost per square meter. I checked into Skyland and that is one of the 4 I know about. The cost per square meter is nowhere close to being competitive with the other developments. Decent location, but wth would one park? No parking in the pics I've seen and only street parking within walking distance other than a back-alley public lot with virtually no visibility for safety/security at night.

I spoke with a friend of mine at length who has extensive experience buying/selling condos in Thailand. His advice is to buy like Thais buy: compare cost per square meter and to heck with the bells and whistles we westerners typically use to justify higher pricing...

[parrot]

KD, there is a carpark in the skyland building. I'd suggest stopping by for a look.....it's one of the scarier inclines in town. That said, they have inside parking.....don't know if others offer the same.

[KHONDAHM]

KD, there is a carpark in the skyland building. I'd suggest stopping by for a look.....it's one of the scarier inclines in town. That said, they have inside parking.....don't know if others offer the same.

I stand corrected, then. I went to the clock circle and saw signs where (I thought) it might be based on the maps. I recall a building from awhile back with a scary incline which was abandoned at the time. Perhaps that is the same building. In any event, the prices advertised on FBI's site scared me off. Good luck to whoever buys there.

[wiking]

before they try to rent it out for a shopping place - but think the bussiness was bad -

but the poster is nice but where is all the grass, is there any window in this building

[parrot]

Another CP sponsored condo project due to go up on SriChomCheun Rd, just down from the mosque. The name is Grand Park (แกรค์ พาร์ค). Advanced sales begin 10 Nov. Their sign says it will have a large swimming pool and beautiful garden(s)....but no other info on pricing.

More Condo....signs all over town on telephone poles, prices start at 8.99k Baht. According to the phone sales clerk, construction due to begin later this year. website http://www.ideas.co.th shows an 8-story project, but no further info on amenities, exact location, etc. The sales clerk says it's to be near Nongbua market, I believe on Soi Prachasanti (she could only speak at high speed). 1000 baht holds your reservation and you'll save 50,000 baht from now until 31 Dec.

Condo.......the new buzz word in Udon!

[merchant seaman]

8.99k or 8.99mil? I think that's million

[parrot]

The sign says "เริ่มต้น 8.99 แสนบาท" as in 8.99k

Get a chance to ?win? a Suzuki Swift to boot!

[Firfox]

My wife has an English school on Sri Chum Cheurrn opposite the new condos. The building looks like it is nearly complete. I assume they are ready to start now working on the interiors.

[rct]

The CP project on Srichumchen Road is just a sign with dirt (as Parrot posted), my wife tried to ring and they did not pick up, perhaps they are busy already, will try again.

All I know is the photo on the billboard, which looks impressive for Udon Thani. Most likely the place will fill up with students whether renting or bought by their families, so many schools nearby. If there is a zone in the development with relatively larger units, a bit separated from all the studios, a stronger likeliood of a somewhat peaceful lifestyle in an otherwise densely populated building with lot's of young people.

[rct]

Went to the CP Project sales office this morning at 09h15, informed I was 30 minutes too late, the place was seriously packed with buyers, cash in hand for down payments, who had been getting information and picking out their units for the last two days. Will be interesting to learn more about the sales progress there.

The sales staff could care less about my presence and questions, even though there were some loitering around and not attending to other buyers. Unlike in Bangkok or Phuket where the sales staff immediately try to give service to the foreigner buyer.

Also hear LPN (Bangkok) bought 17 rai near Aek Udon Hospital, for eventual development, not sure if this was discussed already.

If ever a project within 300-500 meters of Central Mall, may be an even better investment.

[parrot]

I also passed the sales office and noted it was packed. It boggles my western mind that someone would pluck down a fair amount of cash for something that hasn't yet been started.......and has no track record of service....at least in the Udon area.
Across the Nongbualamphu Hwy from the PTT station at about kilo 7, someone in filling probably 15+ rai.....a convoy of trucks dumping load after load (by the thousands, no exaggeration). Given that it's directly across from the gas station, I'll guess the area will another business....but could well be another housing development. No signs posted just yet.

[rct]

Parrot, I look at it this way, a simplified example: suppose I paid 1.8 million baht for a furnished 30 m2 condo with only 20% down, best of it's kind in Udon, in a not so bad location. If I wanted a rental return of 5%, only need to rent it for about 7,500 baht per month, not out of the question, and this is before capital gains.

Now suppose I did a bank loan on it, as a Thai, and then counted on the renter to pay back the mortgage for say 20 years, then in 20 years I own it free and clear and it doubled in value meanwhile.

Now suppose I did that with 5-10 units, make it ten. I put in 3.6MB down on ten units. In 20 years once all paid, if double in value at same exchange rate, it's worth 36 million baht. A tenfold return on my money, albeit with some effort along the way and a bit of risk.

This is what preceded the Asian economic crisis that began in Bangkok when "Lights out in 20% of Bangkok" in the Bangkok Post. Speculation, and assuming one can either rent it to pay the mortgage, or flip it and sell for a profit before the actual handover upon completion.

The trouble with that CP Building for me, while attractive, is it is entirely small units in the range of 28-32 m2.

[KHONDAHM]

The trouble with that CP Building for me, while attractive, is it is entirely small units in the range of 28-32 m2.

I have to agree with you there. If one buys, at least go for two together so one has the option of joining both into a decent-sized unit.

The area may be mostly schools now, but my sources tell me that area has a lot more coming to it. They say completion won't be for another 2 years, so realistically 2015. Condos are selling out in preparation for the Udon of 2015 and beyond, not the Udon of 2012-13. Bad comparison, but think Pattaya 2000 vs Pattaya 2012. Massive difference. Ridiculous returns.

Is it another speculative bubble ala 1997? Well, in 1997, Baby-Boomers weren't retiring in increasingly massive numbers, ASEAN was a wet dream, economic crisis refugees from Europe and America weren't rushing to SE Asia, China wasn't 40+ million wives short (= population of Canada) thanks to the One Child policy, China didn't have a burgeoning middle class, and Thailand wasn't just a train ride away. But that's the new macro-reality. Since 1997, effective reforms have also been implemented which "should" prevent a recurrence. Thailand's weathering of the 2008 crisis is proof positive those reforms are working.

The micro-reality is that all over Udon, land rich, but cash poor Thai families are monetizing their land holdings. That is creating a new middle class with a keep-up-with-the-Joneses spending mentality. As you know, spending on real property (i.e. buying condos) is extremely stimulative to the local economy. Each baht spent on real property has a multiplicative impact locally. Provided things don't get TOO crazy, that local activity would help cushion the blow from bumps or failures in the general Thai economy - including the popping sound of the housing market in other distant cities. An argument could be made that a crash in Bangkok (for example) would actually be beneficial to Udon.

In any event, condos are just starting to go up. There are not many markets in the world where early buyers - to include speculators - were shafted. Buying now is a lot safer and lucrative than buying 3-5 years from now...

[KHONDAHM]

...It boggles my western mind that someone would pluck down a fair amount of cash for something that hasn't yet been started...

My thinking exactly. But there I was...shelling out the loot to the Mrs...and she hasn't been wrong since I started taking her ideas seriously years ago. =D>

[KHONDAHM]

Bad comparison, but think Pattaya 2000 vs Pattaya 2012. Massive difference. Ridiculous returns.

Correction. Think Udon 2000 vs Udon 2012. Massive difference. Ridiculous returns.

[parrot]

KD, I'd never be successful in business.......if I had been Steve Jobs, I'd have built a few handfuls of iPhones......and if they sold, then I'd build a few hundred more, etc etc etc.

All the building in Udon, it seems to me, is based on the premise that the Udon will be the pot of gold at the end of the rainbow when the ASEAN Economic Community (AEC) integrates in 2015. If I saw the potash mine open, the high speed rail line begin, 4G finally hit the country.......then I might be willing to plunk a few million baht in a rice field where I'd have to plunk a few more million baht to get it out of the flood plain and then several million more to build a building that might be in the sweet spot of Udon. But, like I said, I'm not a betting man.
Having said that, there's no question a lot of people are making a lot of money betting on the outcome!

[FrazeeDK]

and of course, eventually the government will totally wise up and increase property taxes commensurate with the "bubble" values of land in Thailand.. Watch the crying and gnashing of teeth then..

[parrot]

On my way to Thai class today, I stopped in the CP Condo sales office on Srichomcheun. A friendly gaggle of ladies ready to answer my every question.
The project will be in two phases....A and B.
Total number of units: 500
Floors: 12
Parking for 200+ autos
Sales for Phase A begun, with about 50 units remaining. Phase B sales not yet started.
They estimate monthly condo fees of about 1000 baht. The project is due to have a large swimming pool, gym, outdoor exercise area, playground. Wifi, CCTV security, some sort of card entry system (don't know if that's for the gate or for the common areas).
Condo sizes start at 25.87 sq meters and up to 34.47 sq meters.

And to think, one short year ago, condo was almost an unknown word in Udon (with the exception of yakking on udonmap)!
Phase A is projected to be finished around December 2014

[KHONDAHM]

Sales for Phase A begun, with about 50 units remaining. Phase B sales not yet started.

Please help clear up my confusion about this statement.

I was told there would be two buildings. Building A (broad side facing east) and Building B (broad side facing west). Building B sold out. Building A sales began after Building B sold out.

Are you saying these two buildings are allegedly Phase 1, and there will be some other building(s) for Phase 2 (if so, where because there is no more room on that lot)?

OR

Are you saying Phase A = Building A and Phase B = Building B? If so, then there is confusion about the buildings because I am absolutely sure Building B sold out and Building A was to go on sale (at slightly higher prices) after Building B.

FYI for anyone following this thread, CP Condo has completed projects in Khon Kaen (and I think other cities, but can't recall clearly at the moment). The project being discussed in this post is their 2nd in Udon. Their first is the one which I posted about previously opposite the Museum/Land Office.