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

[Burma Bill]

7 hours ago, Mikisteel said:

Who was about in 97?

 

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

I was about in 1997 up in Lanna and, yes, many building projects in and around Chiang Mai suddenly came to an abrupt halt. At that time the exchange rate hit 89 baht to 1 GBP!!

[geoffbezoz]

19 minutes ago, CNXexpat said:

There are 200,000 Expats in Thailand, as the latest report said. 50,000 are working for foreign companies. So there are 150,000 left, they live all over the country. If they ALL leave, it will not kill the market. No idea how many Expats are living in Bangkok. 

How wrong you appear to be.

[geoffbezoz]

1 hour ago, kjun12 said:

Of course your many economics degrees allowed you to reach this conclusion.

common sense and experience beats rose tinted glasses any day.

[CNXexpat]

4 minutes ago, geoffbezoz said:

How wrong you appear to be.

How many facts do you have to reply? I see none.

[geoffbezoz]

7 minutes ago, CNXexpat said:

How many facts do you have to reply? I see none.

The facts are in the national reports, or have your glasses got to much of a heavy rose tint to be able read them ?  ????????

Edited August 1, 2019 by geoffbezoz

[Matzzon]

43 minutes ago, CNXexpat said:

Question from a non-native English speaker: what means "Some 20%"? 40, 60, 80%? Or something in the 20%, 21, 22, 23%...?

I guess you can change some to - about or around.

Edited August 1, 2019 by Matzzon

[Inn Between]

8 hours ago, Mikisteel said:

Who was about in 97?

 

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

It wasn't exactly '97, but I came late '99 to take a course. The school was a converted shop house with accommodation upstairs for us students. The soi it was on led down to a lovely little beach, and it had many of the same type of big 4-story buildings lining it with the great majority of them vacant.

 

Nobody was buying them, and from I understand, it was because prices hadn't been adjusted accordingly to the financial situation Thailand was in. We've since learned that the rules of supply and demand generally aren't followed in Thailand, so even with a condo bubble, I expect the Thais will dig their heels in and stick to their high prices. Farang owners will probably follow the logic of supply and demand as it applies to Western situations and sell at a discounted price in they need to unload, but I wouldn't count on a lot of bargains to be had, regardless how bad it might get. 

[CNXexpat]

7 minutes ago, geoffbezoz said:

The facts are in the national reports, or have your glasses got to much of a heavy rose tint to be able read them ?  ????????

"There are fears that if foreigners pull out - especially Chinese - this could precipitate a crash."

Well, super facts. Perhaps your black tinted glasses are too dark. 

 

I don´t think that so many expats will leave that the effect to the market is so massive as they fear. Also that more than 20% of the Bangkok properties are owned by foreigners is a bit too much. 

[marcusarelus]

1 hour ago, ThePioneer said:

Ooops

 

 

 

What ooops?  Me or my wife?  Same deal.  No one asked where the money came from

[ThomasThBKK]

"There are fears that if foreigners pull out - especially Chinese - this could precipitate a crash."
Well, super facts. Perhaps your black tinted glasses are too dark. 
 
I don´t think that so many expats will leave that the effect to the market is so massive as they fear. Also that more than 20% of the Bangkok properties are owned by foreigners is a bit too much. 

This is not about expats only.

HNWI investors are a huge part of every market and they will slow down diversifying into here.

There are certain British families that own huge percentages of berlin and co - same also invest in asia. Just an example, lots of condos are owned by rich families not only individuals

Sent from my LYA-L29 using Tapatalk

[marcusarelus]

3 hours ago, Maejo Man said:

Well if you are a foreigner, which I presume you are, then the lands and titles office will certainly want to know, and ask to see  proof from your bank that the funds came in from overseas. Unless you are a Thai national you are spouting rubbish!

My wife bought the homes and nobody wanted to know. I never bought a condo - don't think it's a good investment but do they want to know where the money came from if it is cash?

Edited August 1, 2019 by marcusarelus

[mike787]

6 hours ago, JonnyF said:

I think it depends when you buy. I bought about 4 years and brought GBP over when the exchange rate was 55. The condo hasn't increased in price but I've lived rent free for 4 years which is almost 30% of the unit price back already and if I sold today for the same price that I bought it for I'd make 30% on the exchange rate. That's a pretty good ROI.

 

Plus I'm free to decorate it nicely without asking for permission or feeling like I'm refurbishing someone else's place and I have the security of knowing that I won't be kicked out when the landlords friend wants it or they get a better offer in terms of rent or decide to sell. It's a bit of stability, I have no regrets buying and wish I did it sooner after renting for 8 years.

I understand your position.  I should have made my narrative more complete.  30% is beyond excellent ROI.  For me, deal breakers are Exchange rate and immigration; both really kill it for me.  Now, add to that the ease of trading mutual funds, ETF's, Forex, precious metals, individual stocks, ie, Amazon, Apple, etc and further more, the tax situation being very friendly in the US, really makes it hard for me to consider depositing millions of baht here.  Again, anyone can do some, or all of what I am doing, and others don't care, they just want a condo in Thailand.  Period!  I get that.  My contributions intent was to evaluate what is considered an investments return based on individual choices, options, and knowledge.  It sounds you did very well.  Lastly, I worry with immigration, they could just decide on their terms to lock me out of Thailand.  I do not feel comfortable engaging in Visa Russian roulette with them on their terms. Otherwise, I really love visiting Thailand.

Edited August 1, 2019 by mike787

[ukrules]

6 hours ago, RBOP said:

They keep saying there is a bubble year after year. 

It's a multi year bubble, sometimes they last for decades.

[marcusarelus]

2 minutes ago, ukrules said:

It's a multi year bubble, sometimes they last for decades.

This one probably centuries. 

[Uptooyoo]

9 hours ago, webfact said:

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.

Properties being discounted seems to be one of the precursors to a crash. Prices begin to fall and then plunge as people panic, thinking their values will fall even more.

[Ron jeremy]

9 hours 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 !!

And paying upfront before a shovel has even hit the ground!

[geoffbezoz]

21 minutes ago, Ron jeremy said:

And paying upfront before a shovel has even hit the ground!

9 hours 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 !!

 

Well many expats, mostly from Europe are blinkered.  Because their home countries have properties designed and built to last a century or more,  when a recession hits invariably the housing market has recovered and gone on to increase in value.  Look at the average property price valuation over the last 60 years and you will see on average a marked increase year on year.

 

Then they come to Thailand and assume the world is the same as back home. That's where I said in another post common sense and experience is needed. They leave it behind. Many reason why property ( not land) is a bad investment in Thailand generally.

1) Poor build quality, lucky if 20 years you won't need major repairs/refurbishment

2) Thais are superstitious and don't like buying second hand property hence re-sale values do not increase much but mostly diminish

3) Very bad planning laws. By a condo one year and a factory could be next door the next or another high rise condo.

 

Could go on but those three are enough and that's not even considering as to whether or not the claimed Chinese exodus is actual or not.

Edited August 1, 2019 by geoffbezoz

[TTL2]

2 hours ago, newnative said:

   My last 4 condo sales were to Chinese buyers.  The most recent, in June, was my Bangkok getaway condo.  First buyer that looked at it snapped it up.  No view to speak of, only 24sqm, but a good location near MRT and Airport Link, a nice condo project by good builder, and a jazzy renovation.  That was enough.  The Chinese market is just developing.

It is the test of time and passion to HODLER. Not many can do.

[Fairynuff]

3 hours ago, Ron jeremy said:

And paying upfront before a shovel has even hit the ground!

I’ve bought two condos off plan. I lived in one for 7 years then rented it for two further years when I moved to a larger one. I sold it at a substantial profil. No regrets about buying before a shovel hit the ground.

[Fairynuff]

2 hours ago, geoffbezoz said:

 

Well many expats, mostly from Europe are blinkered.  Because their home countries have properties designed and built to last a century or more,  when a recession hits invariably the housing market has recovered and gone on to increase in value.  Look at the average property price valuation over the last 60 years and you will see on average a marked increase year on year.

 

Then they come to Thailand and assume the world is the same as back home. That's where I said in another post common sense and experience is needed. They leave it behind. Many reason why property ( not land) is a bad investment in Thailand generally.

1) Poor build quality, lucky if 20 years you won't need major repairs/refurbishment

2) Thais are superstitious and don't like buying second hand property hence re-sale values do not increase much but mostly diminish

3) Very bad planning laws. By a condo one year and a factory could be next door the next or another high rise condo.

 

Could go on but those three are enough and that's not even considering as to whether or not the claimed Chinese exodus is actual or not.

I’d love to agree with you, but you’re wrong. Why do I say this? Because my experience bears no resemblance to anything you’ve said

[Ctkong]

10 hours ago, JonnyF said:

I think it depends when you buy. I bought about 4 years and brought GBP over when the exchange rate was 55. The condo hasn't increased in price but I've lived rent free for 4 years which is almost 30% of the unit price back already and if I sold today for the same price that I bought it for I'd make 30% on the exchange rate. That's a pretty good ROI.

 

Plus I'm free to decorate it nicely without asking for permission or feeling like I'm refurbishing someone else's place and I have the security of knowing that I won't be kicked out when the landlords friend wants it or they get a better offer in terms of rent or decide to sell. It's a bit of stability, I have no regrets buying and wish I did it sooner after renting for 8 years.

If you are going to live in them and for the long term, it makes sense to buy outright even if whether the price rises or falls or whether the exchange rate is in your favour or not. 

[mstevens]

15 hours ago, Mikisteel said:

Who was about in 97?

 

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

 

You could get a 100 square meter unit on Sathorn Road for 2,000,000 baht in 1998, a year or so after the crash. Same unit now would be closer to 20,000,000 baht....

[mstevens]

12 hours ago, spidermike007 said:

I do not want to sound like a doom and gloom forecaster, but I see the property market worldwide, nearing a rather substantial correction.

 

It's easy to say that with prices so high that it's unsustainable and that there must be a correction coming. Many things could cause property prices to fall such as a major economic slowdown causing a sharp rise in unemployment. But it's going to have to be something like that because interest rates are so low that in many ways they offset the higher asking prices - and it doesn't look like interest rates will be going up any time soon. In some countries like USA and Australia interest rates are tipped to go down more...

[sead]

16 hours 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.  

But you aren't a tourist......

[Austrian26]

21 hours ago, SammyT said:

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. 

Yup, i stayed in a nearly built condo (1 year old) and when it rained water was dripping from the wall into the room, balcony door wouldn't close anymore, bathroom was buildt straight so water would never run off.

 

Part of the window was not glass but just card board , 

 

D-Condo 

[Uptooyoo]

5 hours ago, mstevens said:

 

It's easy to say that with prices so high that it's unsustainable and that there must be a correction coming. Many things could cause property prices to fall such as a major economic slowdown causing a sharp rise in unemployment. But it's going to have to be something like that because interest rates are so low that in many ways they offset the higher asking prices - and it doesn't look like interest rates will be going up any time soon. In some countries like USA and Australia interest rates are tipped to go down more...

Interest rates may never be "normalized."  There is too much debt in the world now. Since money costs virtually nothing, corporations have borrowed massively to fund share buybacks that have created a stock market bubble like never seen before.  With banks offering an effective rate of 0%, consumers have shunned saving money, borrowing instead to buy houses at ever-increasing prices to fuel a global property bubble. Total student loan debt is $1.52 trillion and growing as cheap money inflates tuition fees.  And it's not only consumer and corporate debt that is an issue.  The U.S. government has gone on a borrowing spree to take advantage of the low rates.  The interest payment alone in 2018 was $479 billion on the $22 trillion U.S. federal debt and projected to rise to almost $800 billion by 2025.  How much higher would that be if interest rates were to normalize?  The world economy would likely implode under the crushing weight of debt servicing. Other countries are in worse shape: Japan, Greece, Italy, Spain, Portugal, Belgium all have higher debt to GDP ratios.  The world has cornered itself into an inescapable debt trap thanks to the easy money policies of the Federal Reserve and ECB since the financial meltdown in 2008. 

[Lucius verus]

Condos mushrooming  on the other side of the river inBKK. Original prices started at 999,000 b.  

Wouldn't want to be trying to sell one now.

Buyers paradise coming next year.

Many Thais bought condos as weekend "pad" especially in resort towns.

The first things people sell in recessions are boats, collectible cars and weekend condos/homes.

[ThomasThBKK]

7 hours ago, mstevens said:

 

It's easy to say that with prices so high that it's unsustainable and that there must be a correction coming. Many things could cause property prices to fall such as a major economic slowdown causing a sharp rise in unemployment. But it's going to have to be something like that because interest rates are so low that in many ways they offset the higher asking prices - and it doesn't look like interest rates will be going up any time soon. In some countries like USA and Australia interest rates are tipped to go down more...

 

Prices to high in general don't mean anything except one thing:

 

Inflation has eaten our money.

a million USD are not worth much nowadays, decades ago that would have been enough to retire in a hiso life. 

Always keep inflation of wortheless paper money in mind when comparing historical prices, 2 mio THB nowadays are just not the same as 2 mio THB in 1998

[Iforbach]

Yes as too rental ...next to me several condos empty for years  and prices down but goes in par with cra p exchange rates ....rocky times all round i guess ..

[ExpatOilWorker]

9 hours ago, Uptooyoo said:

Interest rates may never be "normalized."  There is too much debt in the world now. Since money costs virtually nothing, corporations have borrowed massively to fund share buybacks that have created a stock market bubble like never seen before.  With banks offering an effective rate of 0%, consumers have shunned saving money, borrowing instead to buy houses at ever-increasing prices to fuel a global property bubble. Total student loan debt is $1.52 trillion and growing as cheap money inflates tuition fees.  And it's not only consumer and corporate debt that is an issue.  The U.S. government has gone on a borrowing spree to take advantage of the low rates.  The interest payment alone in 2018 was $479 billion on the $22 trillion U.S. federal debt and projected to rise to almost $800 billion by 2025.  How much higher would that be if interest rates were to normalize?  The world economy would likely implode under the crushing weight of debt servicing. Other countries are in worse shape: Japan, Greece, Italy, Spain, Portugal, Belgium all have higher debt to GDP ratios.  The world has cornered itself into an inescapable debt trap thanks to the easy money policies of the Federal Reserve and ECB since the financial meltdown in 2008. 

It is interesting to see that some of the most financially stressed countries, Argentina, Turkey and South Africa, are at the bottom of the list with lowest debt, while Japan with the unbeatable Yen and Norway with their $1 trillion sovereign fund are on top of the list.

It is from 2015. Any chance you have the same chart from 2019?