Thailand's condo market sinks as Chinese investment ebbs

[Keyser Soze666]

9 minutes ago, Why Me said:

Don't want to derail the topic but to answer your points:

There's no difference in security renting/owning. And you can leave behind the money, lots of it, that you save.

 

But I see the point of pride of ownership plus that you can do "as you please" in your own place, e.g., modify, renovate, etc.

 

I did buy in the US, not really for the sake of owning, but because the numbers were upside down from Thailand, it worked out cheaper to own and pay off the bank and enjoy the tax breaks.

 

What I worry about owning here is that I have little rights. Don't get me wrong I love living here but at the same time realize that any legal issues and I will pretty much always be on the wrong side. And  5mil+ property, whatever it is, always raises the potential of issues.

 

Right now, if things go pear shaped I can leave the country in 24hrs. leaving about 10k worth of stuff behind. I like that feeling though like I said I couldn't ask for a better life than here.

Yes. I go by the rule that if you do invest here then be prepared to possibly leave it behind/lose it at some point, but hey ho such is life, but there is no real reason why that should happen. I know untold people here that invested many years back and it turned out to be a very wise thing they did,  and guess what they are still here without any issues.

[baansgr]

1 hour ago, Keyser Soze666 said:

But it's not always about the money is it, some people buy as a HOME. You know THEIR place/security and not somebody else's. Also, as something to leave behind for children etc, and can use as security for loans etc.

 

I rent myself, but it's just plain daft for anyone to say they cannot understand why some people buy. Horses for courses innit.

 

The rent/buy 'dilemma' has been spoke about for decades on here. 

Buying for a home always makes sense....even if values depriciate or XE or whatever...your condo, your home,...put a picture up or paint the walls anyway you want...it's worth paying extra for that comfortable feeling

[Keyser Soze666]

5 minutes ago, baansgr said:

Buying for a home always makes sense....even if values depriciate or XE or whatever...your condo, your home,...put a picture up or paint the walls anyway you want...it's worth paying extra for that comfortable feeling

Yep, my sentiments exactly. Some will tell you different though, well, on here anyway.

 

It guarantees you have somewhere to die too ????

Edited June 10, 2020 by Keyser Soze666

[Why Me]

45 minutes ago, Keyser Soze666 said:

I know untold people here that invested many years back and it turned out to be a very wise thing they did,  and guess what they are still here without any issues.

It's called insurance. I know many as well that lived to their 80s without spending a night in a hospital. But they all had health insurance nevertheless.

 

Renting in Thailand is my idea of insurance against being screwed by the legal system and/or other situations/people. And it's the only form of insurance I know where I actually make money (over buying that is from my numbers as I said above).

 

But I see the point of pride of ownership. But then I think of the guy at the car dealership way back when bursting with pride (and money) from my first job after graduating I wanted to buy a new Pontiac Grand Prix.

 

We'd become friendly and he said look, you think you've got a $24,000 car because that's what you paid. But the moment you drive out of here you've burnt $5000 of that because you're not going to get more than $19,000 for a used car even one day old. Buy a 2 year old used Honda. Look at the depreciation chart. That's where the knee is for the Honda. At 2 years. I didn't listen. Heck, I loved my Grand Prix! But the lesson stayed.

Edited June 10, 2020 by Why Me

[Why Me]

15 minutes ago, baansgr said:

Buying for a home always makes sense....even if values depriciate or XE or whatever...your condo, your home,...put a picture up or paint the walls anyway you want...it's worth paying extra for that comfortable feeling

Depends on if you're buying a 9mil. property in order to hang up pictures and paint the wall any way you want. Some people want the freedom. Good for them. Others give a rat's a** as long as they have a comfortable well-maintained place to live, rented or owned.

 

So it doesn't always make sense. In my case, I am very glad that I didn't buy here as I was tempted to in 2011. I kept the money in the US market and it's grown 5x and I am fairly wealthy for that. Which is also a comfortable feeling. And when I get the urge to paint? I go out on town and paint it red:-)

[Kenchamp]

3 hours ago, Pilotman said:

well as I wrote it, who's else would it be? 

Aren't you living in a house that you bought in Thailand?

[Pilotman]

Just now, Kenchamp said:

Aren't you living in a house that you bought in Thailand?

yes

[Mr Meeseeks]

Would be interesting to know how many foreigners are trapped outside Thailand and can't come back to their 'great investments' due to the closed borders.

[Kenchamp]

13 minutes ago, Pilotman said:

yes

And you say "anyone who buys a condo in Thailand needs their head examining" ?

[Pilotman]

4 minutes ago, Kenchamp said:

And you say "anyone who buys a condo in Thailand needs their head examining" ?

Um;  mine is a house, therefore not a condo?  Do you know the difference between the two, or shall I draw a picture ? 

[Kenchamp]

1 minute ago, Pilotman said:

Um;  mine is a house, therefore not a condo?  Do you know the difference between the two, or shall I draw a picture ? 

I know what i can legally own in Thailand do you?

[Why Me]

3 minutes ago, Pilotman said:

Um;  mine is a house, therefore not a condo?  Do you know the difference between the two, or shall I draw a picture ? 

That's cool. I've always dreamt of living in a house with a garden and a pool. But can you own the house fully here? Aren't there laws about foreigners owning land. Even with condos I think the development has to be at least majority Thai.

[Pilotman]

Just now, Kenchamp said:

I know what i can legally own in Thailand do you?

yes. My company owns it, of which I am a 49% shareholder, my other shareholders are my wife and daughter.  Any other questions?  

[Kenchamp]

2 minutes ago, Why Me said:

That's cool. I've always dreamt of living in a house with a garden and a pool. But can you own the house fully here? Aren't there laws about foreigners owning land. Even with condos I think the development has to be at least majority Thai.

It's probably in his girlfriends name because his is different

[Why Me]

1 minute ago, Pilotman said:

yes. My company owns it, of which I am a 49% shareholder, my other shareholders are my wife and daughter.  Any other questions?  

Ok, that sound fairly safe. So there are ways around the ownership laws. In my case I don't have a Thai partner so the option is out.

[Pilotman]

2 minutes ago, Why Me said:

That's cool. I've always dreamt of living in a house with a garden and a pool. But can you own the house fully here? Aren't there laws about foreigners owning land. Even with condos I think the development has to be at least majority Thai.

see my post above, or the many other posts about land and house ownership.

 

PM me if you want details, as I have been through all this before and I don't wish to spark another fruitless 'yes you can, no you can't' debate on the forum.  

[Pilotman]

1 minute ago, Why Me said:

Ok, that sound fairly safe. So there are ways around the ownership laws. In my case I don't have a Thai partner so the option is out.

not necessarily. PM me if you want more details. 

[newnative]

5 hours ago, Enzian said:

This topic and thread have potential, but can any of you people come up with more specifics?

Well, let's see.  Specifically, I sold two condos in 2019, one in Bangkok and one in Pattaya, both at a profit.  Next month, I'm on track to sell the last condo I have for sale in Pattaya, also at a profit.  Just a bit of positivity amid all the negativity.  

 

[Why Me]

17 minutes ago, Pilotman said:

not necessarily. PM me if you want more details. 

Thanks but I am still of the rent frame of mind. But if you have a garden and a pool are going to rent it out ever let me know:-)

[wordchild]

6 hours ago, Enzian said:

This topic and thread have potential, but can any of you people come up with more specifics?

Well ok , I will try.  
A realistic assessment of likely yield on investment  HAS to be your starting point.  
I hear stories of landlords being happy with return on investment of under 4% in central BKK, if they can get that. The problem is the rental market is v weak and landlords are having to deal with extended void periods ,so achievable yields are likely much lower than that.

A friend of mine made a significant return out of residential properties in the U.K., Australia and ,latterly  NZ.  He is now retired (in NZ) and is a wealthy man, with zero invested in property. I once asked him how he invested: his answer was he simply looked at available yield and bought and sold properties purely on that basis.
In his opinion , if the rental market was yielding over 8% , he would always look to buy; once a market had recovered (or rents had fallen) such that rental yields offered a return of under 4% he would always look to sell his properties. in the middle he would do nothing and just hold what he had. He did this a number of times over the last 40 years and has made a considerable fortune.

so, I would guess, in the current market, in Bangkok, based on his formula, one should be a seller of residential property.

[Keyser Soze666]

13 minutes ago, wordchild said:

Well ok , I will try.  
A realistic assessment of likely yield on investment  HAS to be your starting point.  
I hear stories of landlords being happy with return on investment of under 4% in central BKK, if they can get that. The problem is the rental market is v weak and landlords are having to deal with extended void periods ,so achievable yields are likely much lower than that.

A friend of mine made a significant return out of residential properties in the U.K., Australia and ,latterly  NZ.  He is now retired (in NZ) and is a wealthy man, with zero invested in property. I once asked him how he invested: his answer was he simply looked at available yield and bought and sold properties purely on that basis.
In his opinion , if the rental market was yielding over 8% , he would always look to buy; once a market had recovered (or rents had fallen) such that rental yields offered a return of under 4% he would always look to sell his properties. in the middle he would do nothing and just hold what he had. He did this a number of times over the last 40 years and has made a considerable fortune.

so, I would guess, in the current market, in Bangkok, based on his formula, one should be a seller of residential property.

Pardon my ignorance but how is roi worked out? You say a 4% yield/return (assume you mean for 1 year) if you own a property and rent it out, but how is the 4% arrived at?

[Mac98]

7 hours ago, Colabamumbai said:

Less tourists. 

Less tourism, fewer tourists.

[Airalee]

1 hour ago, Why Me said:

Depends on if you're buying a 9mil. property in order to hang up pictures and paint the wall any way you want. Some people want the freedom. Good for them. Others give a rat's a** as long as they have a comfortable well-maintained place to live, rented or owned.

 

So it doesn't always make sense. In my case, I am very glad that I didn't buy here as I was tempted to in 2011. I kept the money in the US market and it's grown 5x and I am fairly wealthy for that. Which is also a comfortable feeling. And when I get the urge to paint? I go out on town and paint it red:-)

No need for you to try to justify renting.  It’s all about the P/E ratio and when you say you’re renting a ฿9,000,000 condo for ฿20,000...you’re way ahead of the game.  There is absolutely NO way anybody can justify paying 450x monthly rent in order to fulfill some sort of homeownership desire and every BS emotional argument (it’s a hoooome...not an investment)...is well...BS.  You can paint a rental, hang pictures on the wall or even refurnish it (like I have for all my rentals I have had here in Thailand).  As the saying goes, “home is where the heart is”...and that can be an owned or rented domicile.  And for what it’s worth...I say this all as a person who just closed on a 6m condo purchase here in BKK which I will be moving into soon (200x monthly rent).  I’ll still be keeping my rental too.

[Mr Meeseeks]

1 hour ago, Pilotman said:

yes. My company owns it, of which I am a 49% shareholder, my other shareholders are my wife and daughter.  Any other questions?  

You used a company to circumvent the foreign land ownership laws using nominee shareholders, family members?

 

I am assuming the company doesn't trade? Do you do books for the company on an annual basis as Thai law requires?

[DrTuner]

1 hour ago, Mac98 said:

Less tourism, fewer tourists.

With TAT in the middle of that equation, it might be 0*1=lots.

[Thechook]

Just curious, are foreigners allowed to own properties in Thailand for the purpose of renting them out?  Wouldn't that be considered working

[Fex Bluse]

13 hours ago, Enzian said:

So far it all seems anecdotal. Rental prices are soft in the Sukhumvit area, but how soft it's hard to tell. There are rumors of price drops on outright sales, but little that's specific. Maybe some agents will chime in. I will predict that if prices are indeed dropping, they will drop more before it's over.

Thailand is, as a rule, anecdotal. There is little consistency in anything. Economies in Thailand often do not follow normal market principles because they are entirely opaque and uncompetitive. 

[wordchild]

11 hours ago, Keyser Soze666 said:

Pardon my ignorance but how is roi worked out? You say a 4% yield/return (assume you mean for 1 year) if you own a property and rent it out, but how is the 4% arrived at?

There are different ways of calculating this, but the most straightforward  would be take the Property value (eg what could you sell it for or what did you buy it for ) then what is the rental income (minus expenses and adjusted for vacancy periods).  simply then work out the net rental income as a percentage of the property value. 

EG, condo value= 5million baht, net rent received after all expenses= 15000 per month. 15000x12=180000; so, assuming the condo is occupied for the full 12 months then your ROI would be 180000 as a percentage of 5 million , so ROI=3.6%  

 The calculation becomes more complex when you can finance purchases with bank debt, but, as far as Thailand is concerned most foreigners are unable to do this anyway.

Edited June 11, 2020 by wordchild

[Pilotman]

11 hours ago, Mr Meeseeks said:

You used a company to circumvent the foreign land ownership laws using nominee shareholders, family members?

 

I am assuming the company doesn't trade? Do you do books for the company on an annual basis as Thai law requires?

Here we go.  One more post then that's it, as this has been done to death elsewhere.   It is not circumventing the law, it's complying with it.  The house was purchased by a company that was established by myself , my wife and my daughter.  My wife and daughter used their own money to invest in the company and proof had to be provided of this fact on its establishment. They are not nominee shareholders, which would be illegal.  Yes it trades, yes it submits accounts and pays tax each year. It has an Annual Shareholders Meeting, which is recorded.  The Company was audited in its first year by the Business Development Department and found to be fully compliant.  

Edited June 11, 2020 by Pilotman

[spidermike007]

A correction was long overdue is this heavily overbuilt market, well before Covid came along. And that now represents a reset for many, many industries. On top of that, nobody honestly knows what the recovery will look like, though many claim to have answers. This is unchartered territory. This is the first time in recorded history that major economies have experimented with absolute insanity, by deliberately shutting down their economies. 

 

The "Malaysia My Second Home" program in Thailand's Southeast Asian neighbor allows foreigners a 10-year renewable residence visa, provided that they put in a minimum fixed deposit of 150,000 ringgit ($35,170) with a local bank. In October, Malaysia reduced the threshold for foreigners to buy property to 600,000 ringgit, from 1 million ringgit, hoping to ease a supply glut.

 

So, if Thailand is serious, time to get rid of the protectionist sluggards, and replace them with progressive and imaginative minds, for a change. Time to start offering ex-pats visa incentives (such as two to five years visas, at no charge, for people who invest in property here), and time to start offering companies tax holidays, and major reasons to come here. In addition lower the absolutely abusive luxury import taxes, and taxes on wine. The days of "coasting on your laurels" are over guys. Thailand is infinitely less attractive to the world than it used to be. And you are doing very little to improve your nation. If anything, you are moving backwards, while the baht starts to appreciate again, and most of your neighbors are trying harder, and are infinitely more intelligent, talented, and creative than you are. And some of the neighbors actually implement a system based on merit, for the government appointments. What a concept! Merit attracts talent. Who would have thought?

 

We are not talking about rocket science here. We are talking about some easy, and sensible things to do to keep yourself in the market.