Fears that the condo bubble is about to burst in Bangkok - especially if foreigners pull out

[webfact]

Fears that the condo bubble is about to burst in Bangkok - especially if foreigners pull out

 

Picture: Thai Rath

 

Thais were busy sharing a Thai Rath story about the condo glut in Bangkok. 

 

Despite a sluggish economy cheap housing especially in the form of condos and town houses continues to be built in the capital. 

 

There are fears that a property crash is about to happen - especially if the Chinese pull out. 

 

Dr Sophon Pornchokchai of the Agency for Real Estate Affairs who are property consultants, spoke of the oversupply and mushroom like growth. 

 

He has said that construction on hundreds of project continues yet few ordinary people have the money to buy. 

 

There are fears that if foreigners pull out - especially Chinese - this could precipitate a crash. Some 20% of condo units are being bought by foreigners. 

 

He had said earlier in the year that a crash could come in 2019 but this has so far not been seen despite properties being discounted. 

 

The ongoing trade war between the US and China was seen as problematical. 

 

The outlook remains risky with the possibility of a crash over the next year or two. 

 

Source: Thai Rath

 

 

-- © Copyright Thai Visa News 2019-08-01

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[RotBenz8888]

12 minutes ago, webfact said:

The outlook remains risky with the possibility of a crash over the next year or two.

A replay of 1997 crash. All those overpriced shoe boxes turn out to be completely worthless, who would have thought......

[Metapod]

Hoping for a crash so that I can buy-in

[SammyT]

Anyone surprised? They go up using cheap materials and cheap labour so they deteriorate real quickly. I have friends who are in condos only a few years old that leak, the plaster is cracking and things are stopping working. Not an investment I'd be keen to make. Especially with many condo buildings forbidding AirBnB as a form of income. 

[Mikisteel]

Who was about in 97?

 

What kind of bargains we talking about? If that property crash happened in bok does it spread nationwide?

[Henryford]

I can't imagine why any foreigner is paying 100,000 baht + a sqm with the current exchange rates. A small condo in Bangkok for $300,000 !!

[peter14]

am already  selling  2 of my  condo !!!  Any buyer  ?as  they  treat me shit  saying am not tourist when i come stay there.  

[NCC1701A]

24 minutes ago, RotBenz8888 said:

A replay of 1997 crash.

it will not be anything like 1997. just a bubble in condo prices.

[geoffbezoz]

Well the "experts " on this forum have been denying it for ages, mainly I suspect because they invested heavily and don't want to admit they will lose money. Also many of these self same "experts" have been predicting that the Thai economy is sound under the current regime and won't falter.

 

Well let's see once the Thai economy goes into free-fall due to the policies of the current puppet government including spending on military hardware yet wanting a 2020 fiscal budget with higher deficit forecasts,  exports suffering due to the policies of the last few years artificially ensuring that the baht is too strong, let's see how the many experts fair then.

 

It would appear that several voices within Thailand are now becoming realistic as to the Thai economy's weaknesses and the reliance upon foreign buyers, notably the Chinese, to artificially increase demand, thus pushing up condo prices, so all I would ask is ;  Where are the shops selling those rose tinted glasses that once worn eradicates all common sense and economic pointers ? Perhaps those so called "experts" on this forum could advise where they bought their own from ????

 

 

Edited August 1, 2019 by geoffbezoz

[miamiman123]

1997 all over again. NO it will be much worse now. 
In 97 the Thai’s who owned those unsellable condos sat on them and would not budge no matter what. Cognitive dissonance ...the same with that ole Mitsubishi Pajero they own. “But I paid 1.6 million and it’s only 15 years old”. Ha! 
This time there are many many more owned by foreigners, but the majority of those vacant condos are bank owned....keep the lights on at night to keep “Dracula” away, because the loans are being held by the banks. 
It won’t be pretty this time and they keep building them as I speak, but “tempus fugit”. 

[RotBenz8888]

2 minutes ago, NCC1701A said:

it will not be anything like 1997. just a bubble in condo prices.

And the Baht...????

[ezzra]

Foreigners buying i.e. westernes, are not the biggest buyers, Chinese, Indian and Malaysians are the people with the money, i have bought a 3 bedder condo in a middle of Sukhumvit back in 2001 when the build quality was still good, still living in it hassle free and the price gone up 5 forlds... 

[marcusarelus]

44 minutes ago, RotBenz8888 said:

A replay of 1997 crash. All those overpriced shoe boxes turn out to be completely worthless, who would have thought......

Probably read up on the 1997 Asian financial crash.  Now Thailand has among the largest cash reserves in the world.

[marcusarelus]

1 minute ago, ezzra said:

Foreigners buying i.e. westernes, are not the biggest buyers, Chinese, Indian and Malaysians are the people with the money, i have bought a 3 bedder condo in a middle of Sukhumvit back in 2001 when the build quality was still good, still living in it hassle free and the price gone up 5 forlds... 

That's what the article said.  It was worried about the Chinese never mentioned Farang.

[marcusarelus]

28 minutes ago, Henryford said:

I can't imagine why any foreigner is paying 100,000 baht + a sqm with the current exchange rates. A small condo in Bangkok for $300,000 !!

The Chinese are doing and have been doing it for a couple of years to get their money out of China.  The Farang don't matter much in this market anymore.

[TallGuyJohninBKK]

Thai real estate market predictions are about as cheap as the paper they're printed on, and about as reliable as the local weather forecasts from the TMD, which are invariably wrong.

 

I have no idea what's going to happen this year or next in the Thai real estate market. But I do know, an awful lot of the condo units being built in BKK are not owner-occupied, and these newer projects often are being built and sold at prices out of the rental or purchase reach of ordinary Thais.

 

In central BKK in a very expensive area near my home, there's a very nice and modern solo house (not a cookie cutter moo bahn style house) that's been sitting empty for most of the decade plus I've been familiar with the area. Has always had a "for rent" sign outside for years, but only actually been rented out for a few months to some Middle Easterners, and then they were gone. I think the owner is asking something in the neighborhood of 100,000 baht per month.  And so, whomever the owner is, basically has sat on an asset producing no income for the better part of a decade.  Some things, I just don't understand.

Edited August 1, 2019 by TallGuyJohninBKK

[Dcheech]

If you have parked 800K in a thai bank for Visa reasons. You can get panicky now, it's ok.

[StayinThailand2much]

No way a crash of the condo bubble is coming in 2019! The Chinese are still buying...

 

It will happen in two or three years, once the Chinese are tired of Thailand, or once they discover other, more worthwile places to invest.

[thirdleg]

22 minutes ago, marcusarelus said:

Probably read up on the 1997 Asian financial crash.  Now Thailand has among the largest cash reserves in the world.

For a reason!! 

 

They can manipulate the baht with a lot of foreign reserves

 

 

 

[Matzzon]

1 hour ago, webfact said:

There are fears that a property crash is about to happen - especially if the Chinese pull out. 

That a property crasch and the economic bubble will burst, that is as certain as all the dumbnuts still walking the Earth.

However, that it would be out of the reason that the Chinese pull out is as far from the truth as humanly possible.

Have no fear. The Chinese invasion has only started. With already close to 1,5 billion people in their own country, the spaces to fit in more in the ever blooming baby-boom circus is starting to be very limited. They just need to continue steal more pieces of Thailand, the country they put their sights on.

[userabcd]

They have been predicting this for years and so far nothing has come of it.

 

In Thonglor and Ekkamai area there are several new buildings going up, all pushing the area property prices up.

 

When one looks at the existing condo buildings around at night, more than 50% of the lights are off and seem to be unoccupied.

 

Don't know who is buying into all these condos or where the money is coming from but one day something will give.

Edited August 1, 2019 by userabcd

[thirdleg]

32 minutes ago, TallGuyJohninBKK said:

Thai real estate market predictions are about as cheap as the paper they're printed on, and about as reliable as the local weather forecasts from the TMD, which are invariably wrong.

 

I have no idea what's going to happen this year or next in the Thai real estate market. But I do know, an awful lot of the condo units being built in BKK are not owner-occupied, and these newer projects often are being built and sold at prices out of the rental or purchase reach of ordinary Thais.

 

In central BKK in a very expensive area near my home, there's a very nice and modern solo house (not a cookie cutter moo bahn style house) that's been sitting empty for most of the decade plus I've been familiar with the area. Has always had a "for rent" sign outside for years, but only actually been rented out for a few months to some Middle Easterners, and then they were gone. I think the owner is asking something in the neighborhood of 100,000 baht per month.  And so, whomever the owner is, basically has sat on an asset producing no income for the better part of a decade.  Some things, I just don't understand.

simple, it's money laundering. Buy the land with cash, buy the materials with cash and pay the workers with cash. Slowly milk out the laundered cash 

[PingRoundTheWorld]

Not a question of if - it's a question of when. Thailand is in for some seriously tough years ahead economically. Tourism bubble is already bursting, housing/condo bubble will follow. Strong baht and current political situation is killing everything from tourism to exports to investments. Until the political situation is resolved (IF it ever resolves) Thailand will continue to circle down the drain. Sad for ordinary Thai people, for sure.

[watcharacters]

1 hour ago, peter14 said:

am already  selling  2 of my  condo !!!  Any buyer  ?as  they  treat me shit  saying am not tourist when i come stay there.  

 

 

Can you post the details.

 

[userabcd]

6 minutes ago, thirdleg said:

simple, it's money laundering. Buy the land with cash, buy the materials with cash and pay the workers with cash. Slowly milk out the laundered cash 

Do you have evidence?

[PingRoundTheWorld]

22 minutes ago, StayinThailand2much said:

The Chinese are still buying...

Are they though? Do you have data on this? There's been a massive decline in Chinese tourism over the past year, combined with the strong baht it's safe to assume there's been a decline in Chinese buying too.

[marcusarelus]

5 minutes ago, userabcd said:

Do you have evidence?

All of the homes I've bought in Thailand were for cash.  Nobody asked where it came from. 

Edited August 1, 2019 by marcusarelus

[thirdleg]

41 minutes ago, marcusarelus said:

The Chinese are doing and have been doing it for a couple of years to get their money out of China.  The Farang don't matter much in this market anymore.

Yeh because there are no controls from the Chinese government are there!!?? They are scared to death of capital flight and just keep hammering the restrictions on their citizens

China has 3 trillion and they are worried, not a poxy 2 billion

[marcusarelus]

1 minute ago, PingRoundTheWorld said:

Are they though? Do you have data on this? There's been a massive decline in Chinese tourism over the past year, combined with the strong baht it's safe to assume there's been a decline in Chinese buying too.

Don't think it has anything to do with the baht.  I don't think Chinese tourism and Chinese condo buying have anything to do with one another.  The Thai takes the Chinese money to the Chinese gold shop and exchanges it for Thai gold. 

[thirdleg]

4 minutes ago, marcusarelus said:

Bank of Scotland can print pounds and the Chinese have been hit with multiple tariffs by Trump for currency manipulation.  Is my dream accurate?

jesus wept, China are manipulating down to make their exports cheaper, Thailand are making them more expensive