At this time let's take a look at an instance of this phenomenon. There was a new condominium launched not too long ago on a plot of land adjacent to another older building. The latter is a little over 10 years old, however when it was first constructed it was regarded as one of many few real grade A condominiums in Bangkok. It has a beautiful podium stage, with a tranquil pool space, tennis court, every other facility you'll anticipate, and each unit measures not less than 300 sq. metres. Why am I telling you this? It is because the sales prices in this condominium are little over one-half of the sales prices in its new neighbor-to- be.
For comfort, for instance that the older condominium is selling for fifty five,000 baht per square meter and the new one is selling for one hundred,000 baht per sq. m. Is the distinction in value really justified?
We will easily rule out the land value, as the two condominiums are right next to every other. So what is the difference?
Construction strategies? Doubtful. In reality, many older condominium units are arguably more stable than the newer counterparts. Many builders producing decrease-grade new condominiums are utilizing materials, such as plastic imitation parquet flooring, which are unlikely to final more than a 12 months or two. Additionally, lower-grade supplies can enable sounds from neighboring units to pass through.
Facilities? Not within the case above. The older condominium has a full range of facilities already.
Calibre of the co-owners? In this case the new condominium has a number of smaller units, geared to perhaps a more center- class market than the older building which contains massive units only.
The appearance of the building? This must be it. The new condominium could have a nice, shiny new foyer, a clean and newly painted exterior, freshly laid flooring within the common areas, and new furniture. The old condominium is waiting for a repaint, and a new foyer can be good too.
Then why don't the owners of the older condominium make these improvements? Probably because when it comes to purchasing a condominium, people are ready with their chequebooks, but for ongoing maintenance, this is not the case. Or maybe the condominium committee members aren't nearly as good at selling-in this case the thought of a necessary cosmetic upgrade to add value - as these working for the developer.
Does this mean that in five or 10 years' time the new condominium will look like the old condominium? Is buying a condominium like shopping for a car; the value depreciates over time?
Well, when you gave the older condominium mentioned above a repaint, gave it a new lobby with new furniture and resurfaced the rostrum stage, and renovated the small amount of common space in entrance of the units, after which the difference between the 2 wouldn't be that great. I don't see many prospective patrons drilling into the concrete structure to check the integrity of the concrete.
Bear in mind that in the event you buy a unit in an older condominium, there is a good probability that inside there could be a number of old wooden fitted furniture that's 10 years out of fashion. It's possible you'll need to rip the whole lot out and start from scratch. If you happen to carried out a radical renovation of the unit-new floors, new furniture, new electrical and sanitary fitting, then you definately would probably be looking at spending within the area of 10,000 baht per square metre.
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