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

[Hackney35]

On 2/24/2020 at 6:09 PM, impulse said:

 

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.

 

Thanks for the lesson, I'm a CFA charter holder so I also understand finance a little bit ????

 

I wouldn't put bangkok condos in the same asset class as gold or even art though. Gold is highly liquid and even art is fairly liquid if it's a high quality piece.

BKK condos are highly illiquid and have no visible secondary market / secondary pricing. As many others have stated it's not in the Thai mentality to lower the price of any asset to make a sale so the only time these condos will start transacting is when the banks take the keys off the defaulted owners and flog them at any price to get them off their balance sheet. (we are not at this point yet but if you look at how this virus is affecting the global supply chain / world tourism then it's easier to be quite bearish on the thai economy)

 

 

Edited February 25, 2020 by Hackney35

[Hackney35]

22 hours ago, SCOTT FITZGERSLD said:

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

Interesting. Not sure I want anything locked up at the moment though as getting pretty bearish on the world economy!

[elgenon]

On 2/24/2020 at 4:31 PM, ChipButty said:

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

Interesting. So theoretically a condo building could be 51% empty? That would not be good. 

 

Has any of you TVers heard of a building with the farang allotment fairly full and the Thai allotment fairly empty?

[bristolgeoff]

very easy to buy a apartment in one day anywhere in Thailand.try and sell the apartment it will years to sell it.they is a reason that there are so many apartments to sell

[ChipButty]

On 2/26/2020 at 10:24 AM, elgenon said:

Interesting. So theoretically a condo building could be 51% empty? That would not be good. 

 

Has any of you TVers heard of a building with the farang allotment fairly full and the Thai allotment fairly empty?

I know of one that was in Phuket to sell the others they had to greatly reduce the price, Thai quota

[DavidAlexander]

On 2/25/2020 at 9:44 AM, Jimbo2014 said:

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.

You left off the 4th....consumer debt. Unfortunately, but not unpredictably, Thais embraced unfettered consumerism with gusto. My Thai wife has several friends who live on the edge with car/condo/CC debt. I'm in Chiang Mai where Chinese tourism, and resultant revenues, are down 95%. I'm guessing many end of March monthly payments will be very difficult to meet, perhaps in the other big cities as well. If one bank starts to fail (a la Lehman Bros in the US in 08/09) "Look out below!!!"

[ChipButty]

One of the biggest property development companies in Thailand is already laying off staff

[tjo o tjim]

On 2/24/2020 at 1:50 PM, BobbyL said:

There are two towers there with 917 units in total. Just over 200 of those were still unsold. 

Sounds like Circle... except no way there are that many unsold based on what I see. 200 Vacant units is possible, but even that would be a stretch. 

[Number 6]

This virus thing could be the trigger. As long as the people that paid cash are not forced to move AND the people that borrow have jobs the status quo remains in force.

 

If the virus punctures a hole in the economy. If people get suck and cannot go out work. If businesses fail. All bets are off.

 

I'm seeing signs of economic weakness everywhere. Empty stores in malls, empty offiice space, shophouses closed.

 

Condos everywhere that developers are acting as landlords converting condos into apartments. This should be illegal.

 

Once loans are called all loans will be called and it's game over.

 

I'm not so concerned over petty consumer debt. Large durable goods purchases yes. At 20% interest those shark banks link since made their principal and profit. But cars and condos...that's gonna be a problem.

 

Edited March 1, 2020 by Number 6

[ThomasThBKK]

4 minutes ago, Number 6 said:

This virus thing could be the trigger. As long as the people that paid cash are not forced to move AND the people that borrow have jobs the status quo remains in force.

 

If the virus punctures a hole in the economy. If people get suck and cannot go out work. If businesses fail. All bets are off.

 

I'm seeing signs of economic weakness everywhere. Empty stores in malls, empty offiice space, shophouses closed.

 

Condos everywhere that developers are acting as landlords converting condos into apartments. This should be illegal.

 

Once loans are called all loans will be called and it's game over.

 

 

Also known as a black swan event: https://www.investopedia.com/terms/b/blackswan.asp

 

One of the reasons i always pay cash and never take a loan/mortgage, even tho it makes financially not much sense until an event like this happens.

[Destiny1990]

Sales Prices will drop because lack of tenants.

Why less tenants? Stricter visas and wuhan flue..and pollution and competition from vietnam phills cambodia. Good luck !

[SteveK]

Political situation is now very uncertain in Thailand. Combine that with all the other reasons mentioned and I can see no good reason why any Westerner would ever consider buying an apartment in the capital. The air is so bad now that it stings my eyes. Immigration feels like a dice roll every time despite doing everything by the book and having more than enough funds. And with Anutin's outrageously racist little rant against **ck*ing farangs - well that's just another nail in the coffin, certainly not looking good.

 

I would imagine selling a condo right now will be next to impossible. My experience with Thais purchasing property, motorbikes and cars etc is that they like to buy brand new wherever possible.

Edited March 1, 2020 by SteveK

[Susco]

On 2/25/2020 at 7:31 AM, ChipButty said:

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

Looks like you want to open your mouth but have no idea what is coming out of it.

 

When foreign quota a foreigner can still buy Thai quota, they simply open a company and own it through that company, no need for a 30 year contract.

On 2/28/2020 at 12:57 PM, ChipButty said:

I know of one that was in Phuket to sell the others they had to greatly reduce the price, Thai quota

Thai quota is always priced lower than foreign quota, and they are sold to foreigners though company structure

 

 

[Airalee]

44 minutes ago, SteveK said:

Political situation is now very uncertain in Thailand. Combine that with all the other reasons mentioned and I can see no good reason why any Westerner would ever consider buying an apartment in the capital. The air is so bad now that it stings my eyes. Immigration feels like a dice roll every time despite doing everything by the book and having more than enough funds. And with Anutin's outrageously racist little rant against **ck*ing farangs - well that's just another nail in the coffin, certainly not looking good.

 

I would imagine selling a condo right now will be next to impossible. My experience with Thais purchasing property, motorbikes and cars etc is that they like to buy brand new wherever possible.

It’s not just bad for westerners...it’s bad for Thais too.  Case in point...

 

I went with my gf to look at a condo she was interested in.  Her agent showing the unit gave us a price of 2.7m.  I told the agent that the same condo was listed on hipflat at 2.3m.  Agent says “it wasn’t selling so they spent money remodeling”.   The only thing that had changed from the pictures was the sofa.  When I pointed that out to the agent...crickets.

 

The greed (and stupidity) of agents here in Thailand is astounding.

[mrwebb8825]

On 2/24/2020 at 3:21 PM, 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 <deleted> 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.

The trouble with you "Doomsday" experts is you never live long enough for the rest of us to say "I told you so" when you're proven wrong.

Is life really so bad that you're forced to live under the shadow of a perpetual death threat to all and sunder?

I feel so glad to have a really great life and a really great wife and have only once in 19 years ran into a request for "teamoney" from a new IO in a new Immi office who quickly rescinded his request when he found out his boss has been a friend of the family for longer than he's been out of diapers.

I honestly don't understand why some people stay when happiness must be just around the corner to somewhere. 

Edited March 6, 2020 by mrwebb8825