Baht’s strength dulls foreign interest in homes under Bt10m

[webfact]

Baht’s strength dulls foreign interest in homes under Bt10m

By Somluck Srimalee

The Nation

 

Photo by Pruksa Real Estate Plc

 

The baht’s appreciation against the yuan and dollar will have a direct impact on demand for residential units for the rest of the year, say property developers.

 

“Demand from overseas investors for residential units priced under Bt10 million has been dropping since the second quarter, and the baht has appreciated 8.07 per cent against the yuan, from Bt5 per yuan to Bt4.35 in August this year, while rising against the dollar by 5 per cent,” Prasert Taedullayasatit, chief executive at Pruksa Real Estate Plc, told The Nation recently.

 

 

He said residential prices had risen an average of 8 per cent in yuan terms and 5 per cent in dollar terms, curbing demand among foreign buyers for units under Bt10 million.

 

But demand for luxury residences above that price is still growing, Prasert said, thanks to foreign investors looking for second homes in Thailand, particularly Hong Kong people wanting luxury condominiums in Bangkok amid the current political unrest in the Chinese territory.

 

 

“We were successful with sales of our new luxury condominium, Chapter Charoennakorn-Riverside, last week, with 10 per cent of the units booked by Hong Kong customers,” he said.

 

Prayongyut Itthiratchai, first vice president at SC Asset Corp Plc, said 9 per cent of buyers for its 28 Chidlom luxury condo were foreigners overseas, and half of them Hong Kong people looking for a second home in Thailand.

 

The 28 Chidlom condo was unveiled in 2017, asking foreign buyers for down payments of up to 20 per cent, he said.

 

Prayongyut concurred that foreigners’ purchasing power had dropped due to the baht’s appreciation and said his company had to revise its residential business strategy to focus on domestic rather than overseas demand.

 

An Agency for Real Estate Affairs survey found that overseas demand for Thai homes dropped in terms of volume from last year’s average of 20 per cent to 14 per cent in the first half of this year. 

 

In terms of value, the decline was from 25 to 19 per cent.

 

Source: https://www.nationthailand.com/property/30375822

 

-- © Copyright The Nation Thailand 2019-09-05

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[amykat]

The TM 30 effect as well???

[mok199]

And yet they keep building......when will Thailand ''throw in the towel''...

[donnacha]

1 hour ago, amykat said:

The TM 30 effect as well???

Also that report this week of a retiree's renewal being refused because the owner of the condo he rented was Chinese, rendering the rental illegal because the owner was not permitted to work in Thailand. Hopefully just a one-off bizarre decision but if it in any way represents the start of a fad to exclude foreign landlords it will pour cold water on the entire market.

[donnacha]

5 minutes ago, mok199 said:

And yet they keep building......when will Thailand ''throw in the towel''...

When the Chinese stop desperately wanting to get their money out of China.

[the guest]

Thaiand following the steps as the Chinese as currency manipulators. 

 

Don't expect foreigners to come to Thailand when there are equally many other places for cheaper.

[SoilSpoil]

Why would I buy a condo, 10% more expensive than last year, in a country where I have to report my every move to the police? 

Maybe a good time to sell my condo and buy foreign currencies.

[Youlike]

1 hour ago, mok199 said:

And yet they keep building......when will Thailand ''throw in the towel''...

Didn't you read the article?

 

They will build more 10 million+ condo's from now on, for the rich chinese.

 

Well who wants to live in a 35 sqm shoebox on the 15th floor anyway?

[Nowisee]

2 hours ago, donnacha said:

Also that report this week of a retiree's renewal being refused because the owner of the condo he rented was Chinese, rendering the rental illegal because the owner was not permitted to work in Thailand. Hopefully just a one-off bizarre decision but if it in any way represents the start of a fad to exclude foreign landlords it will pour cold water on the entire market.

 

Rule #1, don't rent from chinese.

 

1 hour ago, the guest said:

Thaiand following the steps as the Chinese as currency manipulators. 

 

Don't expect foreigners to come to Thailand when there are equally many other places for cheaper.

 

Not just cheaper (and even if it was more expensive) but a much better experience.

 

 

1 hour ago, SoilSpoil said:

Why would I buy a condo, 10% more expensive than last year, in a country where I have to report my every move to the police? 

Maybe a good time to sell my condo and buy foreign currencies.

 

I agree.  With the vast amount of rentals available, the sketchy economy and unstable government, why buy in this country?  

 

[Aussieroaming]

The reality is that developers need to look at the prices they charge per sq/meter for condos, especially in Bangkok. The advertised rate in our condo block was 189 000/sq meter and I thought that was overpriced. The condo block sold out except for a few lower floor condos which have been on the market for more than 2 years. However while that condo sold out because there weren't many new blocks in the area and there is good infrastructure close by, there have since been 5 more condos built (or being built) within a 500 meter or so radius, so I would think our condo prices will drop dramatically if one wanted to sell. 

[rkidlad]

25 minutes ago, Aussieroaming said:

The reality is that developers need to look at the prices they charge per sq/meter for condos, especially in Bangkok. The advertised rate in our condo block was 189 000/sq meter and I thought that was overpriced. The condo block sold out except for a few lower floor condos which have been on the market for more than 2 years. However while that condo sold out because there weren't many new blocks in the area and there is good infrastructure close by, there have since been 5 more condos built (or being built) within a 500 meter or so radius, so I would think our condo prices will drop dramatically if one wanted to sell. 

Yeap. Me and the missus bought a condo in 2016 in preparation for the new BTS right outside our front door in 2020. We bought it to live in for the foreseeable. The value of our property on paper has increased (selling it would be another matter), but the amount of condos that have been built in the area since then has been staggering. Our saving grace is that our condo is low-rise over a huge area of trees, flowers and greenery. All the other ones are just high-rise shoe boxes that look like something from a dystopian future. 

[SmartyMarty]

house sales down, car sales down, motorbike sales down, tourists down.....let's make farangs pay more for hospitals.

[WeekendRaider]

first thought real obvious.  unless it is where you live, not an investment at any price.

even for homes over 10 million THB, as another "strength" may dull interest in real property but not just for foreigners either.  beginning real soon.  2020?  well, real property ahead of stocks as well as bonds obviously, especially bonds..... that are now bid at negative rates for the first time in 243 years such as the 30 year Treasury.  next?  they say maybe 10 years, but the narrative is a little different from the one some of us know about.  including some folks with $12 trillion US dollars in those negatively rate bid and held bonds:  a "possible recession next year" is what we are told..  yeah right.

"strength" as in positive over negative atmospheric forcings that.... we have to put this in politically correct language.... have an influence on the discount rate used to price those thangs.  using some accounting tongue twisters but if you think about for a few secs it makes sense to just about anyone.  unless you don't get simple physics.  not even the kind [Einstein stuff] that allows cell phones to work.  simple physics [even before the great Albert Einstein who had Asperger's Syndrome, just like Greta Thunberg has, so they say].

that's what the tea leaves seem to maybe say.  maybe.  but if you believe I also have Asperger's, that may or may not help you out.  if you are not prepared at all.  and we all need to be.   yeah yeah.  maybe.  I get that too.  but do you?   

Edited September 5, 2019 by WeekendRaider

[trainman34014]

4 hours ago, mok199 said:

And yet they keep building......when will Thailand ''throw in the towel''...

Never; they have to keep laundering all that illicit cash and building is the way to do it !

[tjo o tjim]

Why would Hong Kong people want to buy here as an escape valve?!  Other countries will give them permanent residency status for investments of ~20M ฿, with minimal hassle.  Thailand gives them a tourist visa...

 

Overall, I wouldn’t worry too much for developers nearing completion of the building shell, but boy, breaking ground today seems high risk in most areas of BKK.

 

Will also be interesting if there is any form of crackdown on Chinese vacation rental units like there has been on some of the western apps.

[madmen]

1 minute ago, tjo o tjim said:

Why would Hong Kong people want to buy here as an escape valve?!  Other countries will give them permanent residency status for investments of ~20M ฿, with minimal hassle.  Thailand gives them a tourist visa...

 

Overall, I wouldn’t worry too much for developers nearing completion of the building shell, but boy, breaking ground today seems high risk in most areas of BKK.

 

Will also be interesting if there is any form of crackdown on Chinese vacation rental units like there has been on some of the western apps.

Thailand has an investment visa

[Time Traveller]

5 hours ago, amykat said:

The TM 30 effect as well???

and the dozen or so other ways in which foreigners get treated like garbage by Thais

[AI5AASIA]

Surely the easy answer to this interest in more than Baht 10m units  is just increase the price of the condo's being built, or already built.  Instead of selling the 50 sqn units for Baht 150k/sqm, instead increase the price to Baht 200k/sqm.

If the unit is only 35 sqm just increase the rate to Baht 300k/sqm

 

Win win solution 

 

[rgrdns]

4 hours ago, mok199 said:

And yet they keep building......when will Thailand ''throw in the towel''...

Yep....they need laundry machines

[rgrdns]

3 hours ago, Youlike said:

Didn't you read the article?

 

They will build more 10 million+ condo's from now on, for the rich chinese.

 

Well who wants to live in a 35 sqm shoebox on the 15th floor anyway?

35 sqm? They minimum they building for the last years is so far as I know....24 sqm!!

[Ketyo]

4 hours ago, donnacha said:

When the Chinese stop desperately wanting to get their money out of China.

So never then.

 

There are billions of Chinese. And who would want to live in China.  Non-one, not even the Chinese. Every neighbouring country in SEA is more attractive. Thailand especially.

[tjo o tjim]

28 minutes ago, madmen said:

Thailand has an investment visa

True, but much more restrictive, IIRC.  You need to have a non-imm visa already to apply, and then you are back with the reporting requirements, no?  It takes 3 years to get “permanent resident” status.

[Vacuum]

6 minutes ago, tjo o tjim said:

It takes 3 years to get “permanent resident” status.

That should be; before you can apply for one.

[trainman34014]

40 minutes ago, tjo o tjim said:

Why would Hong Kong people want to buy here as an escape valve?!  Other countries will give them permanent residency status for investments of ~20M ฿, with minimal hassle.  Thailand gives them a tourist visa...

 

Overall, I wouldn’t worry too much for developers nearing completion of the building shell, but boy, breaking ground today seems high risk in most areas of BKK.

 

Will also be interesting if there is any form of crackdown on Chinese vacation rental units like there has been on some of the western apps.

Hong Kongers are applying in multiple thousand to enter Taiwan and the richest ones, and there are plenty of them, are applying for Millionaire Visa's in the UK and Australia.

[topt]

1 hour ago, WeekendRaider said:

but if you believe I also have Asperger's, that may or may not help you out.

Do you?

 

1 hour ago, WeekendRaider said:

I get that too.  but do you?   

To be honest no. 

But then I was never any good at physics.......

[onera1961]

4 hours ago, SoilSpoil said:

Why would I buy a condo, 10% more expensive than last year, in a country where I have to report my every move to the police? 

I see condo prices in Jomtian are on decline. Last year's 2.5 million condos are selling for 2.15 million. Still hesitant to buy one because the same condo is renting for 9-10K/month.  If I invest the money in US, I can pay rent from my investment income with the flexibility of moving to any place at any time I want. I am not yet convinced about buying a condo in Thailand. And I wont buy any condo more than 10 million BHT unless I have 3 million USD  which I don't have. 

Edited September 5, 2019 by onera1961

[Isaan sailor]

With a rapidly rising Baht (thanks to ChiCom hot money inflows at BoT) farangs should look into leaving—not condo purchases.

[NCC1701A]

5 hours ago, mok199 said:

And yet they keep building......when will Thailand ''throw in the towel''...

never i hope. super low rents for decades to come.

[NCC1701A]

21 minutes ago, onera1961 said:

I see condo prices in Jomtian are on decline. Last year's 2.5 million condos are selling for 2.15 million. Still hesitant to buy one because the same condo is renting for 9-10K/month.  If I invest the money in US, I can pay rent from my investment income with the flexibility of moving to any place at any time I want. I am not yet convinced about buying a condo in Thailand. And I wont buy any condo more than 10 million BHT unless I have 3 million USD  which I don't have. 

real estate "investment" in Thailand is not for Americans. Far too many options back home.

 

 

[wolf81]

1 hour ago, onera1961 said:

I see condo prices in Jomtian are on decline. Last year's 2.5 million condos are selling for 2.15 million. Still hesitant to buy one because the same condo is renting for 9-10K/month.  If I invest the money in US, I can pay rent from my investment income with the flexibility of moving to any place at any time I want. I am not yet convinced about buying a condo in Thailand. And I wont buy any condo more than 10 million BHT unless I have 3 million USD  which I don't have. 

When buying in Thailand I would also worry if the condo's would be properly maintained now and in the future (I've seen quite a few run-down condos that surely must have looked nice at one time) and if the build quality is decent. I'd say there are a lot of crappy condo's on the market, marketed as luxury living. 

Edited September 5, 2019 by wolf81