Bangkok Has 100,000 Empty Apartments. It Could Soon Have More

[fruitman]

2 hours ago, allstarplayer090 said:

Supply and demand work in every country. Demand is going down, supply continues to increase. Prices will fall.

Nope, not in BKK...around Impact Muang Thong were 10! skyscrapers which have been abandoned for a decade or so....they were newly built but not finished..

[stvette2002]

6 hours ago, alex8912 said:

Oh God. ....then when you get to the border the sky could fall in on Laos, Cambodia, Malaysia and Myanmar!! Then your only choice is back to Thailand!! What to do then??

Do you really think you own anything in Thailand? If you have a house either you lease the property and build a home on it or you and your Thai partner owns 51% of the property and could cause many problems. I lived in Thailand for 3 years and spent 2 years in the Air Force there and nothing is new, I built a home for my thilak and the boyfriend came in and threw her out. Even condos the building has to have 51% Thai ownership and may even be on leased property so think before buying anything.

 

[Lancelot01]

8 hours ago, Guderian said:

No, Thai Economics 101 says that when there are fewer sales you must maintain your revenues by putting UP the prices, not lowering them, lol!

Along with the management charges. Win win.

[Hackney35]

5 hours ago, ChasingTheSun said:

I did notice back on a visit in August 2019 that there were allot of brand new completed buildings in bangkok that have few, if any, lights on Inside at night.

 

Way overbuilt and way overpriced. ghost towers.

Yeah this is exactly what I always think about Bangkok condos. Why are there so few lights on at say 9pm on a Monday night. 
Many are apparently bought by hiso Thai as investments and they never rent out I believe for some superstitious reason (some Thai explained it to me one time but sounded like nonsense)

Unless the economy seriously crashes and people start defaulting on their loans then I guess we won’t know the true ‘market price’ of these shoeboxes.

For now it’s surely a case of catching a falling knife and best avoided.

[impulse]

27 minutes ago, Hackney35 said:

Yeah this is exactly what I always think about Bangkok condos. Why are there so few lights on at say 9pm on a Monday night. 
Many are apparently bought by hiso Thai as investments and they never rent out I believe for some superstitious reason (some Thai explained it to me one time but sounded like nonsense)

Unless the economy seriously crashes and people start defaulting on their loans then I guess we won’t know the true ‘market price’ of these shoeboxes.

For now it’s surely a case of catching a falling knife and best avoided.

 

With the banks paying a fraction of 1%, real estate seems like a pretty safe investment.  And given the Thai disdain for buying used stuff and the risks inherent in being a landlord, it makes sense to buy it, make sure it's secure, and sit on it vacant until it's time to cash out.

 

It may have sounded like nonsense to you, but one thing I found in 20+ years of living in Asia is that my paradigm may work well back home, but it doesn't work well in a very different culture.

 

I'd also add that, just because the Chinese aren't able to travel to Thailand, doesn't mean they aren't investing in Thai real estate.

 

 

[fruitman]

24 minutes ago, Hackney35 said:

Yeah this is exactly what I always think about Bangkok condos. Why are there so few lights on at say 9pm on a Monday night. 
Many are apparently bought by hiso Thai as investments and they never rent out I believe for some superstitious reason (some Thai explained it to me one time but sounded like nonsense)

Unless the economy seriously crashes and people start defaulting on their loans then I guess we won’t know the true ‘market price’ of these shoeboxes.

For now it’s surely a case of catching a falling knife and best avoided.

Yes plenty of huge condo's with maybe 10 lights on at night...but it's the same in the villaparks, they buy a new villa and rarely go there.

If they all bought that as investment they better sell it now before the prices start to drop...if it starts dropping it can go really fast i guess.

[fruitman]

2 minutes ago, impulse said:

It may have sounded like nonsense to you, but one thing I found in 20+ years of living in Asia is that my paradigm may work well back home, but it doesn't work well in a very different culture.

 

Asia had the luck of the economy doing so well because they were so far behind. But now that's all changing slowly and the real market laws will appear i guess.

But lets face it, who in his right mind would choose to live in BKK? There's always traffic jam, far too busy, far too hot, polluted, no nature, expensive, have to pay for security, drink from a bottle, no places to swim or relax...everything is dirty and broken/cracked...

 

But things will only get more expensive once they start importing more rules to keep it all liveable like in the West. More human rights, higher salaries, less pollution, it all costs money.

 

 

[Hackney35]

11 minutes ago, impulse said:

 

With the banks paying a fraction of 1%, real estate seems like a pretty safe investment.  And given the Thai disdain for buying used stuff and the risks inherent in being a landlord, it makes sense to buy it, make sure it's secure, and sit on it vacant until it's time to cash out.

 

It may have sounded like nonsense to you, but one thing I found in 20+ years of living in Asia is that my paradigm may work well back home, but it doesn't work well in a very different culture.

 

I'd also add that, just because the Chinese aren't able to travel to Thailand, doesn't mean they aren't investing in Thai real estate.

 

 

Sorry I don’t understand. Why is it a good investment vs a 1% Paying bank account.

They don’t have a tenant so there isn’t a yield and let’s be honest the chance of getting a positive absolute cash return on any sale (if they can find a mug to buy it) is looking fairly limited.

Plus they have to pay ongoing service charge and condo blocks in Bangkok deteriorate quickly due to their poor build quality.

So overall if this was an NPV decision I’d take the 1% paying bank account every time.

If you are long the bkk condo market I hope you have your lucky amulets on!!

 

[impulse]

1 hour ago, Hackney35 said:

Sorry I don’t understand. Why is it a good investment vs a 1% Paying bank account.

They don’t have a tenant so there isn’t a yield and let’s be honest the chance of getting a positive absolute cash return on any sale (if they can find a mug to buy it) is looking fairly limited.

Plus they have to pay ongoing service charge and condo blocks in Bangkok deteriorate quickly due to their poor build quality.

So overall if this was an NPV decision I’d take the 1% paying bank account every time.

If you are long the bkk condo market I hope you have your lucky amulets on!!

 

You could say the same about any investment that doesn't throw off income or a dividend.  Gold, art, Bitcoin, Beanie Babies or a thousand others.  At the end of the day, the ROI comes from appreciation in value, minus any expenses incurred in buying, holding, and selling.  The other benefit of real estate is that you're generally leveraging your cash by taking out a mortgage.  You may have 10% cash tied up, but you're getting the benefit of appreciation on 100% of the value.

 

[Iron Tongue]

15 hours ago, NCC1701A said:

you can't apply western sensibilities to Thai real estate. 

Seen 2 real estate crashes in the US, 3 if you count when I was a kid... Also Europe, Hong Kong, even in Lebanon.  RE bubbles happen everhwhere, prices get inflated, crash then the bank repos everything.

When the mass repos happen in Thailand, bank officers will unload bad debt wholesale - just like how they were taught in Western business schools.

 

This may not take place until China's RE crashes.  The properties in Thailand were purchased using loans from highly leveraged Chinese real estate.  The bubble that pops in China will affect the global market, Thailand will be just a footnote.

[anicon]

12 hours ago, Khun Yaaai said:

That actually exists. I've seen a number of developers/agents offering this in BKK mall exhibitions. Of course they will try to make you pay premium for one of the units and the 2nd one is 'free'.

.. the 2nd one is free but the Thai taxes won't be, add insurance to the mix + misc expenses and guess what, you're selling that free one..

[Vigilante]

4 hours ago, Iron Tongue said:

4 hours ago, Iron Tongue said:

Seen 2 real estate crashes in the US, 3 if you count when I was a kid... Also Europe, Hong Kong, even in Lebanon.  RE bubbles happen everhwhere, prices get inflated, crash then the bank repos everything.

When the mass repos happen in Thailand, bank officers will unload bad debt wholesale - just like how they were taught in Western business schools.

 

This may not take place until China's RE crashes.  The properties in Thailand were purchased using loans from highly leveraged Chinese real estate.  The bubble that pops in China will affect the global market, Thailand will be just a footnote.

 

 

 

 

The China RE bubble will pop spectacularly soon

The CPP will print a cool trillion or two to try to contain mass defaults and prop up a quarantined economy.

The tsunami will hit thai RE like never before

 

 

 

 

 

[elgenon]

20 hours ago, NCC1701A said:

you can't apply western sensibilities to Thai real estate. 

I was told by an expat that Thais don't care about the price as much as farangs because they plan to keep the property for a long time.

[elgenon]

20 hours ago, BestB said:

Interesting OP, considering that only 49% can be foreign owned , And OP suggesting market is dead because Chinese are not buying   Does that mean 51% of thai also not buying ? So perhaps it’s not the virus but crappy local economy that’s the problem ?

So if Thais don't buy the 51% then farangs can't buy any units? Is that how it works? farangs have to wait for Thai to won 51%?

[SCOTT FITZGERSLD]

7 hours ago, Hackney35 said:

1% Paying bank account

cambodia banks are paying 6-8% on USD deposits for 3-5 years !!

[SCOTT FITZGERSLD]

15 hours ago, SteveK said:

contempt

you are right. I know more than one farang who lost it all after fighting

with the wife / neighbor / ex-partner...one friend of mine married a thai woman,

bougth a house, lived with her for 20 years until he discovered she got into

heavy debts behind his back, she had to run away and he lost the house he bougth

left thailand and dies two years later.

[SCOTT FITZGERSLD]

15 hours ago, CGW said:

20 minutes a year to extend

do you live near the immigration office?

[ChipButty]

1 hour ago, elgenon said:

So if Thais don't buy the 51% then farangs can't buy any units? Is that how it works? farangs have to wait for Thai to won 51%?

No, thats not how it works 49% of the units will have a foreign freehold and if the 49% is sold out farang can still buy a unit but only on a 30 year contract, farangs dont need to wait until the Thai quota of 51% is sold

[IAMHERE]

Got to hype the over supply so that a temporary rule can be implemented to increase the allotment of farang owners above the 49% level. I believe it has been done in the past. I also believe the 49% level was reset when economy got better and there were some problems reselling condos for those that made up the over 49% group. Hard to explain in writing but bottom line is watch out.

[Jimbo2014]

18 hours ago, sahibji said:

too early to confirm. depends on the mortgage leverage for bubble to be burst.

Not just mortgage levels.  Also rates, median incomes and employment.  The later two could come under stress with the three horsemen of the covid19, high baht and pollution apocalypse.  Will have to see.

[mok199]

If the condo is your home in the right location and a good product at a good price....why not.

[fraggleRock]

21 hours ago, alex8912 said:

Oh God. ....then when you get to the border the sky could fall in on Laos, Cambodia, Malaysia and Myanmar!! Then your only choice is back to Thailand!! What to do then??

I think this statement is more over ensuring your money is in a safe and stable economic country such as only Singapore in SE Asia or back in Western Europe.  A good start is moving all your money into an international bank for stability leaving the minimum for VISA requirements in the tinpot corrupt Thai banks...

[Dexxter]

On 2/24/2020 at 9:51 AM, ThreeEyedRaven said:

Bangkok is not going to be alone. There is a glut of empty property in Pattaya and they are still building more. I wouldn't be buying right now, as it seems prices are highly likely to fall given the surplus.

Using Thai logic, prices will probably INCREASE because lack of buyers.

[drbeach]

21 hours ago, SteveK said:

I would never, ever in a million years buy property in Thailand, even if it was half the price it is now. Not only do you have to worry about extremely shoddy workmanship, but with immigration tightening the thumbscrews ever further, it could potentially give you a massive headache further down the line. If, as posters on here have predicted, a future political event renders farangs persona non-grata in the most extreme sense, then if you are renting all you have to do is grab your belongings and head for the border. The landlord will figure it out and repossess the property, you lose the deposit, peanuts in the grand scheme of things. Start a new life somewhere else.

 

But if you have a 2-3 million baht condo (or even more) and you are not allowed in one day, get refused your extension of stay because you used the wrong colour ink, or someone with an axe to grind accuses you of a crime and dobs you into the police (thinking jilted ex-lover here report you for assault or something equally bad), then you're in a whole new world of grief. Selling a property in Thailand is a nightmare by any stretch of the imagination at the moment, imagine trying to do it from outside the country. It doesn't bear thinking about to me. You'd either spend a huge amount of time and money trying to deal with it by proxy, and possibly end up being shafted by a dodgy lawyer, or end up having to cut your losses and walk away.

 

Just remember that we are only ever guests in Thailand - for that very reason I refuse to buy anything that I wouldn't want to walk away from if the sh*t hits the fan one day. It reminds me of that PC game Second Life, where people were spending real world money to buy in-game land and buildings, yet they never know one day if they turn their computer on and the developer has stopped supporting the game and shut down the servers. Money gone.

 

You never know what is going to happen in Thailand. But one thing is for sure right now, Anutin felt emboldened enough to make his little rant against f**king farangs in front of a camera, so that gives us an insight into the kind of language he and his cronies are using behind closed doors in government offices. It certainly does not look good. The country appears to be becoming more and more nationalistic, xenophobic and undemocratic as the days roll by, which shouldn't be a surprise as they would appear to be cosying up to Mr Jinping. And given the extreme contempt with which ex-pats are treated in China, that should be a major concern for us all.

Legitimate residents are still being given their visa extensions. Though I agree that the requirement to keep 800,000 Baht in an account for a long time is unusual and restrictive, the Thai authorities see it as a way of ensuring foreigners aren't paying off agents and others to borrow money they don't have. Other than that, it's still relatively straightforward to qualify for a visa unless you don't have any money. Placing restrictions on regular tourists I don't find to be a problem - if you come once a year for 3 months you won't face any problems. The ones who are being refused are the perpetual tourists who don't have much money and are trying to spend 11 months a year here without a proper visa.

 

I wouldn't take much notice of Anutin. He's just a gaffe prone xenophobic moron who got his 2 minutes of fame. His words don't necessarily reflect upon the views of the rest of the government.

 

I agree with you however that China is taking a dim view of expats and foreigners in general...xenophobia is used as a tool there to distract the populace from actual issues like toxic air pollution, endemic government corruption etc. etc.

 

I don't believe however that Thailand is anywhere near that bad yet. Thailand, unlike China, needs foreign tourists. The reason for cosying up to the Chinese, Indians and Russians is that there are so many of them they can (or could up until recently) almost be taken for granted. Few come more than once but they don't have to...there are billions more to replace them so Thailand could conceivably have millions and millions of unique visitors just from these countries coming for years to come.

 

This all being said...I wouldn't take Thailand for granted but neither would I take any other country for granted. The world is changing and not in a good way. As with not putting all your tourism eggs in one basket by relying solely on Chinese tourists, I would be very cautious about investing my savings entirely in Thai real estate, which is overpriced and of shockingly low quality. Plus, as far as condos are concerned, there's no way I'd bring myself to live in a shoe box. What happens if there's a lock down? You can't even go out and buy food as we're now seeing in China.

[drbeach]

6 hours ago, elgenon said:

I was told by an expat that Thais don't care about the price as much as farangs because they plan to keep the property for a long time.

Yeah but Thais earn nothing - apparently the average wage in Bangkok is a paltry 22,500 Baht per month! On such a low salary, you can't afford much, much less shoe box sized condos that are priced from 5-10 million Baht!

 

An average Thai should be looking at the price point and comparing it to it's value for money. I'd say it's well worth spending 5 or 8 million on a 3-4 bedroom house out in the suburbs and commuting to work, than live in a 30m2 shoe box in the middle of the city that costs as much. That's real planning for the future, because it's unlikely you'll be working the same job in the same location forever.

[drbeach]

19 hours ago, CGW said:

My circumstances were a little different to most, my main reason for moving to Thailand was I needed to escape the UK taxman, I used Thailand as a base starting 30+ years ago. When I bought my first house I set it up using a company name, a definite no,no according to many on TVF, it worked for me, listening to others is not always wise. Would I buy now as a retiree, don't know ???? Some of the other country options being touted for retirees I would not consider, like the PI, lived there for three years, if you think Thailand is bad the PI is worse but in a western setting with guns & gratuitous violence!

Property? buyer beware! your not in the West, you have to take the time and trouble to thoroughly research, then make sure you have a contract to CYA! Took me three houses to get it right, lucky I was able to sell the others easily enough, location always sells. 

The "politics" here have certainly evolved, for sure no government minister would go on TV 20 or 30 years ago and spout of about Farang, but back then they had less than 5 million visitors a year & governments were just "temporary". Thaksin was the first PM to serve a full term in Thailand - Ever! all the previous governments were thrown out for either corruption or 'Big Yellow" instigated coup!

As you rightly state, times have changed! from where I am sitting not for the better.

How do you know no government minister would say "ai farang" 20 or 30 years ago? Social media didn't exist back then and media coverage was probably more selective than it is now.

 

The main difference between then and now is that back then, governments were mostly western-backed. The current government is more closely aligned to China and Russia, but still has one foot in the west. Of course it doesn't help that western governments have had nothing good to say about Thailand since 2014's coup and BTW I'm not pro-military, I'm just trying to put things into perspective.

 

However, I don't think Thai governments really liked farang any more in the past then they do now. Big difference is that nowadays, farang don't seem to have any money anymore, while Chinese, Russians and Indians do and their numbers combined are far larger than all farang countries put together.

 

I still find there is far more anti-white, anti-western rhetoric coming out of any western country than there is out of Thailand. Unless you are so deeply offended by the word "farang" that you can't bear it anymore and choose to leave the country, you'll quickly find anti-western jokes being hurled your way as soon as you make it back to farangland that are far more insulting than anything you'll experience here.

 

Personally, I find Thai people quite lovely overall but not everyone has time to smile at you just because you're a farang. I don't mind that - people have busy lives and just being a farang is no reason to attract unnecessary attention (20-30 years ago, the sight of a farang might have attracted attention, at least out in the villages). Thai immigration generally treat me with courtesy and respect, and I also engage them in conversation. The smaller offices/immigration checkpoints are particularly friendly. I've passed through most of the Thai overland checkpoints with neighboring countries over the years and can state that overall, Thai officers are the friendliest out of all the neighboring countries.

[drbeach]

21 hours ago, SteveK said:

What you say is true. However, if you were retiring in Thailand today as opposed to 20 years ago, would you still be willing to chuck down a huge chunk of your savings to purchase a property with so many potential risks on the horizon? I suspect that someone who is obviously intelligent such as yourself would think long and hard about doing so in the current climate, there are just so many unknowns for ex-pats in Thailand today and in the short/medium-term future.

 

Just because you did well in the last 20 years or so, presumably because you were cautious and careful as shown by your supervision of your property construction, does not mean that someone coming here now and building a house will have the same fortunes, far from it in my opinion.

 

20 years ago you could open a bank account on a visa-exemption. Try doing that now. And you could come in and out as many times as you wanted without getting the third degree or even sent back home. And 20 years ago I doubt very much that you would have seen a very senior government minister on the TV talking about "f***ing farangs" - things have changed a great deal in what is a relatively short period of time, and these are but a few examples.

You can still open a bank account with a visa exemption in some places. There has not been any official change in policy.

 

Not sure about your last quote - social media didn't exist back then. Pretty sure there were grumbling anti-farang ministers around 20 years ago. Just that you weren't around to know about it. That being said, previous governments were western backed. The current one obviously isn't.

[drbeach]

21 hours ago, alex8912 said:

Oh God. ....then when you get to the border the sky could fall in on Laos, Cambodia, Malaysia and Myanmar!! Then your only choice is back to Thailand!! What to do then??

I find it hilarious when farang on here say that Laos, Cambodia, Vietnam, Malaysia and Myanmar are friendlier towards farang than Thailand is! Absolute nonsense, as I will point out:

 

Myanmar - many areas closed to farang. Farang will be harassed and threatened with expulsion if they try to enter restricted areas. Shwe Koko new Chinese city right on Thai border - closed to farang. Signs state "NO FOREIGNERS" in English, which is ironic, given that technically, the Chinese are foreigners in Myanmar too, but the point is they are saying they don't want westerners snooping around before the city is completed. Also, foreigners can't get any sort of loan in Myanmar, permanent residency is impossible and forget about citizenship. Dual pricing - widespread even at hotels (foreigners pay more than locals).

 

Laos - authorities tolerate farang but prefer Vietnamese and Chinese. The day will come when farang visa runners will no longer be afforded entry. For now, Lao authorities accept it because it's still poor and needs the cash.

 

Cambodia - Sihanoukville is basically off-limits to non-Chinese now (some Chinese-owned casinos and restaurants bar farang customers outright). Authorities taking an increasingly dim view of farang (barang) overstayers and no longer issuing 1-year visas to drunk, unemployed dead beats. The most you can get now is 6-months, but that too won't last forever. Unfriendly and corrupt immigration officials at the borders. Pay up or you don't get your visa. Passport is thrown back at you, even if you pay up without making a fuss. Forget about a "hello" or "welcome". Cambodia expats online is a good forum for seeing all the exploits of barang "at the end of the road".

 

Vietnam - about to end tourist visas longer than 30 days. Mass exodus of foreigners could ensue. Need to wait until July to see what happens. Incredibly rude and even hostile customs officials. Passports are thrown back at you, forget about trying to bring in any sort of vehicle larger than a motorcycle.

 

Malaysia - sort of tolerates farang, but only if they don't complain or do stupid things like go nude on a mountaintop. Disobey any laws and you're in a world of trouble (mandatory death sentence for drug traffickers, for instance). Strict Islamic culture and locals tend to look down on farang habits and ways. I see very few Thais complaining about farang on social media the way I see complaints from Malaysians about how bad farang are. Bangkok Post comments section a guy called "unig" every post is anti-farang even if the topic has no relation to farang whatsoever. He's Malaysian. Little surprise there.

[Jimbo53]

On 2/24/2020 at 10:01 AM, BestB said:

Interesting OP, considering that only 49% can be foreign owned , And OP suggesting market is dead because Chinese are not buying   Does that mean 51% of thai also not buying ? So perhaps it’s not the virus but crappy local economy that’s the problem ?

<deleted> wits..Its all about the Forex rates!

[3NUMBAS]

similar to the time of the asian crash in 97 when many lost their shirts on off the plan purchases