From glitzy sales galleries, stunning renderings and flashy launch events, everything about new projects are infused with an aura of buzz and hype!
New developments are usually sold by charming buyers into envisioning themselves owning a “picture perfect” lifestyle. Therefore, off-plan marketing is often a polished and well-choreographed performance, that can sweep unsuspecting buyers up in a frenzy of excitement.
Prospective buyers, are therefore advised to keep a calm and rational state-of-mind. Carefully evaluating a project’s selling points and specifications, while assessing local market conditions. No matter how big or reputable a developer, the savviest and most successful buyers, “tread carefully” and remain cautious!
Fresh’s Editorial Team has therefore prepared a list of “3 Bangkok Real Estate Pitfalls and Risks” to avoid when buying off-plan:
1. Non- Completion
This is a risk that is not specific only to Bangkok real estate, but that is important to mention nonetheless. Off-plan projects come with the inherent risk that the developer fails to make good on their development obligations.
While non-completion is not as prevalent in Bangkok, buyers are always advised to do some research into the developer’s financials and track record of completed condos. Risk-averse buyers, can restrict their condo purchase to companies that are listed on the Thai Stock Exchange.
2. EIA Approval
Bangkok’s thriving urbanscape and booming transformation, is subject to a stringent set of planning and building regulations. Therefore, as part of this regulatory framework, condo developments need to obtain Environment Impact Assessment (EIA) approval.
EIA applications can take many months, before being granted; especially if government officials impose modifications that impacts the building’s final design or concept. Failing to be granted an EIA approval, can delay completion or in the worst case even force developers to stop a project altogether.
It is important to note that the marketing of a project and the launch of its sales gallery, can start before EIA is approved. Therefore buyers should be cautious and always check the status of the EIA approval of any project.
3. Promoters and Sales Channels
Developers in Bangkok often enlist a complicated advertising and marketing network; comprised of the company’s in-house sales and a combination of local and international property agencies to help sell their projects.
This dynamic business environment, has given rise to specialist agencies dubbed underwriters, that bulk-buy or guarantee condo reservations from developers in return for steep discounts. Underwriters in effect, buy discounted condos “wholesale” with the goal to resell on a “retail-basis” to individual buyers with a markup. The practice is common in Bangkok and prevalent in many real estate markets across Asia.
However, when buying from underwriters buyers should ensure that the prices offered to them are competitive, especially relative to the development’s direct in-house sales channels. Pricing mismatch and double pricing are common, and unsuspecting buyers are oftentimes left with units at over-inflated and uncompetitive prices!