Let’s talk a little about City Center Residence by Matrix. We can talk about it now because, according to the local press, the project has reached 50% sold units and EIA approval has been granted, there is less uncertainty regarding the project. The project was put on the market in march 2012.
It has been one of those projects that has been under close surveillance because of sales numbers that under normal circumstances should have been much better. Now City Center Residence is off the hook and investors will feel more relaxed. It is very important when a project is out of the danger zone, that means the developer can deliver as promised.
Out of the danger zone means I can write about it. Believe me, there are many other projects I cannot write about without risking hurting the project. This article is not about a specific project, it is about explaining that the local market is weak.
Ask yourself the following questions:
- Is it a great central location?
- Are the prices attractive?
- Is it a good project?
- Has the developer previously had successful projects?
Affirmative on all questions regarding City Center Residence. Yes, it is a great central location. There are very few centrally located new condominiums in Pattaya. Yes, the prices are reasonable, the project looks modern and the developer has had many successful projects, especially in the Jomtien area with projects like Park Lane, Paradise Park and Amazon Residence.
If the market was healthy City Center Residence would have sold out in a matter of weeks.
“If the market was healthy City Center Residence would have sold out in a matter of weeks“
Believe it or not, Matrix announces more projects in the pipeline despite of the difficult market conditions they have experienced. It looks like they are trying to keep up appearances by pretending it is business as normal.
It is NOT business as usual, this is a fact that is not up for debate. Keeping up appearances is not my style, I report what I see. Only few people can report independently because of the dependency of the industry.
“Only few people can report independently because of the dependency of the industry”
The developers in Pattaya are struggling very hard just to get 50% of the units sold, in many cases they need 2 YEARS to reach that magic number.
50% sold is indeed a magic number because is means there is a high chance of getting project finance approval. It means the banks will most likely support the project, however it does not necessarily mean that the developer will be making money on the project.
We have been talking about City Center Residence but we might as well have been talking about Unixx by Raimon Land that was launched 23 November 2011, two years ago. Unixx has started construction and is starting to rise above ground. Unixx have experienced similar difficulties with low sales numbers.
Let there be no doubt, if I were an investor I would have invested in both Unixx and City Center Residence. If you look at the basics there is no doubt that both developments ought to be good investments. The market is acting weird and that is the reason for these property articles.
There are those around that close their eyes and ears and hold on to the past. They believe nothing has changed. Perhaps they are addicted to the game? Perhaps the risk is worth the reward? I can’t explain it.
“Some developers believe nothing has changed. Perhaps they are addicted to the game? Perhaps the risk is worth the reward?”
With the arrival of developers from Bangkok that are listed on the stock exchange it is unlikely that there will be room for developers who drag out the time before construction starts. A ‘dead period’ of two years with no activity is a thing of the past.
Dragging out the time before construction starts is becoming very dangerous for developers. He will get a bad reputation, investors will be very nervous and most likely invest where the risk is lower.
If a project fails for various reasons, be it low sales numbers or lack of EIA approval, investors should NOT come to me for sympathy. Even if the developer end up pocketing 50 MB from the failed project, still don’t come to me for sympathy or ask for your money back.
When you invest in off-plan developments you gamble, then you must be man enough to take the losses if they come.
Published 12 November 2013
Pattaya’s Property Bubble Bursting