Here Is Proof The Bangkok Condo Market Is Still Booming

[london]

Getting back to the original topic, there are many posts who argue that the Bangkok Condo market is booming, and many who argue that it is not.

Frankly, as I see it, it is not booming at all. It is on a steady consolidation phase.

Having gone through all the posts, I am somewhat amazed to see some posts declare that it is overpriced.....compared to where?

The fact is that at $150,000US you can buy a reasonable/good condo in Bangkok. In a prestige development here in Bangkok, 5 million baht will buy you a comfortable 1 bedroom...thats it.

This is NOT a price that equates with a booming marketplace, nor is it a price that equates to grossly overpriced. It is a conservative price in the world market and also very conservative in the Asian marketplace.

I own, as some of you know, but I don't really care if the price of my units goes up or down. I'm here for the long haul. The fact that I bought 2 of my units for under 3 million and similar units are now being sold for 4 million (in 2 years of holding) really doesn't interest me apart from giving me a "feel good" factor. If they had gone down, well, so be it......but they haven't.

In a booming market, everyone and his dog buys. This hasn't and isn't happening in Bangkok.

If you want to see a booming market, look at Australia..Sydney in the last 5 years, or for that matter Perth, up 32% in 12 months. Look at Shanghai !

This isn't happening in Bangkok.

Interestingly, in an earlier post to this topic I suggested that those posting put down their holdings......only one has. So for all the members who feel that the property market in condos is booming in Bangkok and that it is about to collapse, good luck to you.

For those of us who really don't care (and please, I don't mean this in an arrogant way)..we'll just keep holding.....and if our condos increase in value, hey, thats great....and if they don't , well........

To me, Bangkok, and Thailand as a whole, is in the major growth area of the world. It is a major hub to the rest of Asia. The airport, for all its problems, supports this.

If you decide that its "booming" and too expensive, well, fine.

If you decide, like me and many like me, that its a good time to buy..then do so.

Good luck!

[stevejones123]

Hong Kong has a GDP per capita of 36 000 USD (9 000 for Thailand). In London, prices are going up because it's a world financial center. In Hong Kong, there is a real scarcity in land...

You're quoting the Purchasing Power Parity figure for Thailand, which is not relevant to the price of real estate.

The nominal per capita GDP for Thailand in 2005 was $3,136. and for Hong Kong $27,466.

In one respect prime London real estate is similar to prime Bangkok real estate: most of it is being bought by foreigners.

[quiksilva]

Interest to see the GDP comparison because real estate is also about 10x more expensive than Thailand's too..

[churchill]

I paid a deposit on a condominium- Sukumvit Soi 22 - 4 years ago pre construction and sold at the completion stage , virtually at cost price ( + 500,000 baht ) the condo was marketed at 22 Million plus but I accepted just over 18 Million . There was quite a lot of interest but not at the asking price - Now it is completed , occupied and furnished it may sell for a bit more -but there is a lot of condos on the market even in the best locations and in the present climate I cannot see anyone achieving their asking price - so there is not a lot of support for prices being asked - To sell one has to accept a low offer .

[pkrv]

london - great reply I couldn’t agree more with your analysis.

stevejones123 - there is the 49% rule, condominiums cannot all be bought by foreigners - believe you me I have tried to explore this aspect.

churchill - thanks for the open post - you are seeing the same thing I am, small (theoretical) returns but what the hey, cars can cost more!

Yet at the same time new projects are selling out???? - I get the impression this is a market in its infancy and is most certainly not in trouble.

[bingobongo]

little perspective on busts, my comments in brackets and CAPS.........

One more time, for the uninitiated, from Manias, Panics and Crashes (got cash?)

The upswing usually starts with an opportunity - new markets, new technologies or some dramatic political change - and investors looking for good returns. (CHECK, PROPERTY AND COUP IN THAILAND)

It proceeds through the euphoria of rising prices, particularly of assets, while an expansion of credit inflates the bubble. (CHECK, EASY CREDIT BY OFFERING TEASER LOAN RATES aka SEE MY POST ABOVE #118)

In the manic phase, investors scramble to get out of money and into illiquid things such as stocks, commodities, real estate or tulip bulbs: 'a larger and larger group of people seeks to become rich without a real understanding of the processes involved'. (CHECK, BOOM IN THAI REAL ESTATE PEAKED in 2005 AND ACTUALLY NEGATIVE TAKING INTO ACCOUNT INFLATION)

Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is 'distress', which generates unexpected failures, followed by 'revulsion' or 'discredit'. (CHECK, AS WITNESSED BY EMPTY UNFINSISHED BUILDINGS aka THE TRENDY)

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king. (COMING SOON TO THAILAND AS THE ECONOMY CONTIUES ITS TAILSPIN)

Edited May 11, 2007 by bingobongo

[churchill]

One thing I would like to say is that it is extreemly difficult to get a mortgage or credit in Thailand and when the market opens up I am sure property prices will respond .

In the UK one can borrow on salary 5 times ? on property valuation and rental income also - when these terms come thialand if ever ! property will rise in proportion

[ThaiGoon]

From what I've read. the high-end real estate market is still doing all right (not booming) while the low-to-middle level market is struggling. The overall economy is definitely in a downturn right now thanks to the political uncertainty. If the politicial situation becomes clearer and more stable, the economy will definitely improve. World Bank, IMF and many other international financial institutes all have come to this same conclusion and all expect the GDP growth (i.e. the overall economy) to improve next year. The current situation is a far cry from the one we saw shortly before the 1997 crisis. I think people who are wishing for a disaster (for whatever reason) will be sorely disappointed.

[london]

If I may, a response to a few of the recent posts:

Quiksilva: yes, I think that your GDP comparison is correct.

Churchill: everyone wants a bargain...none more so than Thais ! However, my feeling for investment is based on the premise: the higher the price, the lesser the buyers. This is so true in real estate. Once you get over around 12,000,000 baht, the buyers start to become exceptionally choosy, and diminish in number at an alarming rate the higher the price goes. I feel more comfortable with investment purchases under 6 million. Certainly, for my own home (unit), this isn't so much a consideration...as I bought it to live in it. Also regarding mortgages, I have always arranged funding offshore...covering the payments with rental return. This is to me the best policy, if you can afford to do it. Certainly, there are financiers in Bangkok who can arrange finance/mortgages out of Singapore. I don't feel comfortable with this arrangement. I appreciate your candour....thank-you.

PKRV: many thanks for your comments. We appear to be on the same wavelength.

Bingobongo: what you describe was exactly what was happening in 1995/1996 before the crash. Certainly, as I see it, these factors are not occurring now. Also, the Bangkok condo marketplace is not a new marketplace....its been through a lot (though not all, I would think) of its teething problems and is becoming a more mature market. Certainly, in the case of Thailand, I would not regard this recent coup as "dramatic political change". Coups are not unheard of in Thai political history, and the fact of the country still basically getting on with day to day business confirms this. But it WILL be interesting to see what it will be like in a years time...personally, I am positive...that's why I feel comfortable investing here. I would suggest that as you are quite negative about the future, that you have not, nor are intending to purchase. How about we agree in one year from now to make a post on the situation then. If the condo/realestate economy in Thailand is collapsing, then I will be the first to congratulate you on your foresight!

Thaigoon: I couldn't agree with you more!!!

Edited May 12, 2007 by london

[palm]

>>If you read my post carefully, I did not say that Thais "don't buy", I said Thais "don't really like to buy". There is a difference.

Yeah I read it; my luxury condo is 90% owned by 'rich' Thais. Maybe they really don't like living in their 10 to 24m baht condos, and I am living in an parallel universe because the ones I know here sure look and sound happy to me.

Any hard data (i.e. name of your "luxury" riverside condo) to support your claim? It wouldn't be SV City, would it?

Regards.

Nope. It's Riverine Place between Rama 7 and 5 bridges. Sorry to let facts spoil an argument. I also own a condo in State Tower.

I went to see the Prime 11 today in Suk 11; only 5 studio apartments left all selling at over 100,000 baht a sq/metre (not exactly good value). They are confident of selling all the remaining prime units there in the next 4 months and would not budge on price.

Just to make it very clear; some of us buy condos to live in; and my total asset exposure in Thailand is less than 20%. And as for quoting GDP income; giving a GDP average for whole country as a measure to compare with the high quality condo market in Bangkok is simply foolish and simply a sign of someone who doesn't have good grasp of economics.

So I'll say it again to the whingers who can't afford to buy here and think the sky is falling down; show me some *proof* of luxury condo developments in serious trouble or prices dropping and I'll go check them out. I'm looking to purchase - and I'm not interested in quotes showing prices of bus fares, bananas, light bulbs or tulips thank you very much

Its laughable to see the misquoting. I NEVER said Bangkok should be as expensive as London or Hong Kong, I said its much cheaper. A totally different thing, but hey what have facts got to do with many of the threads on TV?

I am very lucky enough to be able to live in any major city in the world, and I now live mostly in Bangkok because I love Thailand; and property here is CHEAP compared to other major cities. I get to spend 5% of my income on high quality day to day living and use the 95% left over for investments.

Edited May 13, 2007 by palm

[Livinginexile]

>>If you read my post carefully, I did not say that Thais "don't buy", I said Thais "don't really like to buy". There is a difference.

Yeah I read it; my luxury condo is 90% owned by 'rich' Thais. Maybe they really don't like living in their 10 to 24m baht condos, and I am living in an parallel universe because the ones I know here sure look and sound happy to me.

Any hard data (i.e. name of your "luxury" riverside condo) to support your claim? It wouldn't be SV City, would it?

Regards.

Nope. It's Riverine Place between Rama 7 and 5 bridges.

Sorry to let facts spoil an argument.

I went to see the Prime 11 today, only 5 studio apartments left at over 100,000 baht a sq metre. They are confident of selling all the remaining prime units there in the next 4 months and would not budge on price.

There it is....

And you will find your returns on such an investment will be at around 7-10% P/a, not counting capital gains.

I also do not believe the Thai baht will depreciate any further for a few years.

Good investment in my books but only if one is prepared to invest for the long term.

[jumnien]

Today, I accepted an offer from a Thai couple of 4.5 million for my 84 sq. meter leasehold condo on Rajadamri, Soi Mahadlek 1. We paid 4.3 million 3 years ago. So, we haven't made much on capital gains in baht terms but we have made about 15% or more on baht appreciation. We are selling because we had 2 condos in the building and have moved to Hua Hin. All in all, I loved the 2 years we lived in the unit until we bought a bigger condo in the same building. We lived rent free and picked up about $25,000 gain in dollar terms after the sale. This is by far the worst real estate investment I've made in Thailand and I'm perfectly happy about it. I did sell lower than I think it is worth because I liked the people a lot.

[bingobongo]

booming my backside......that is a lot of idleness.....

PROPERTY

TCC Capital Land cuts new projects

Developer cites sluggish growth in home sales

TCC Capital Land has halved the number of developments it will build this year with an associated spending cut of 70 per cent.

http://www.nationmultimedia.com/2007/05/14/business/business_30034131.php

[quiksilva]

It is generally slow, there is no denying that. However, that is not to say that it is slow for everyone in all markets, I'll give you an example they had a soft opening of the 4th phase of the Sansiri housing estate where I live this weekend.

7 people waiting at the sales office at midnight, to secure houses with views over the lake.

It is slow though overall, but you will not find us jumping out of office buildings just yet.

[bingobongo]

right, more proof that the property market is doing splendidly.......nothing like eroding the tax base and increasing deficits to prop up an overpriced asset market.....

Business >> Monday May 14, 2007

Property stimulus within two weeks

FPO officials to meet Chalongphob today

WICHIT CHANTANUSORNSIRI

The government is expected to approve a new programme of short-term stimulus measures for the property sector within the next two weeks, according to Finance Ministry sources.

The measures will be effective for only one year and will include a reduction in the specific business tax for developers to 0.11% from 3.3%, as well as a cut in land transfer and registration fees to 0.01% from 2%.

But it appears unlikely that the Finance Ministry will approve any increase in personal tax deductions for interest expenses on home mortgages to help spur market demand. (SO BASICALLY GIVE INCENTIVE TO BUILD BUT NOT TO BUY, THUS LEADING TO MORE OVERSUPPLY....HEY THAT RHYMES)

The Fiscal Policy Office is expected to present its recommendations for the new measures to Finance Minister Chalongphob Sussangkarn today. If approved, the package could be endorsed by the cabinet as early as tomorrow or on May 22 at the latest.

Dr Chalongphob had earlier expressed scepticism about cutting transfer and registration fees due to the impact on local administration revenues.

But FPO officials argue that any shortfall in tax revenues for local administrations could be compensated through additional transfers from the central government. (DREAMING)

Proposals to increase the tax deduction for mortgage interest to 70,000 baht from 50,000 now are unlikely to materialise, as ministry officials say such a move would have little immediate impact on new homebuying.

Activity in the property market has been slow in recent months due to weak consumer confidence and slow economic growth.

But analysts remain hopeful that the market trends will turn upwards in the second half of the year as interest rates continue to fall and political uncertainties begin to ease. (MORE DREAMING)

Officials say more aggressive fiscal and tax measures could be taken to help the property sector if activity fails to improve going into the latter half of the year.

The new measures are part of a broader six-point framework launched by the government to help spur economic growth.

It calls for easing financial pressures faced by low-income residents due to rising costs, addressing slowing consumer demand, and initiatives to help boost investment, construction and new machinery purchases.

http://www.bangkokpost.com/Business/14May2007_biz28.php

Edited May 14, 2007 by bingobongo

[bingobongo]

bubble bubble, toil and trouble.....thats it, keep building

livinginexile, could you please post a photo? thanks

Your money >> Monday May 14, 2007

REAL ESTATE / SMALL PROJECTS WITH BIG POTENTIAL

Niche developer lives up to name NINA SUEBSUKCHAROEN

Sena Development has bravely entered the inner city condo market with the low-rise The Niche in Sukhumvit Soi 49 at a time when fears are increasing of a property bubble.

The company's executive director, Dr Kessara Thanyalakpark, said that while she was concerned that the company could face a market bubble, she went ahead with the project because of its location and competitive price.

The Niche is attractively priced at a pre-launch level of 48,000 baht a square metre for units on the second floor of the eight-storey building. Situated deep inside Soi 49, it offers peaceful surroundings and a manageable size _ there are just 120 units compared to other projects that can run into hundreds of units.

While Sena's first condo is likely to do well among its middle-class target market, the fear of a bubble remains.

Dr Kessara agreed that an oversupply in the inner city and skyrocketing prices could cause a market crash, since real estate is prone to bubble markets.

The volatility is partly due to lack of information, she said. ''With stocks we see prices every day and there is a median price for a stock, but nobody can ascertain the median price of a condo.''

Another factor is the time lag between the conceptualisation of a project and its actual launch, which could be eight to nine months, by which time other developments could enter the market.

''Why is this supply flowing in? It's because people see that the market is good but as the flow becomes heavier people don't notice the gush and this leads to a bubble developing.''

Dr Kessara believes The Niche (above) is well positioned to find buyers but wonders about the wider market trend.

The government is on the verge of introducing measures _ essentially the same ones that were in place earlier _ to improve the property market. Among them are a reduction in the specific business tax for developers to 0.11% from 3.3%, and a cut in land transfer and registration fees to 0.01% from 2%. (ECNOURAGE BUILDING BUT NOT BUYING.....pure genius)

However, Dr Kessara questions the effectiveness of the proposals, pointing out that while they worked during former prime minister Thaksin Shinawatra's term, times are different now.

''The economy doesn't look good, the unemployment rate is high _ it's in the papers every day that people fear losing their jobs, people across the country are uncertain. ... Developers have reduced house prices by 10-20% but they still can't sell them and if they drop another 3-4%, how much is that going to help?

''Personally I don't think spurring the property market with tax cuts will help the situation greatly.''

Sena Development, which is preparing to list on the stock market, has come up with a campaign to cope in difficult times by allowing buyers of single houses to live there for 24 months before starting to pay for the property.

Dr Kessara also observed that the idea of introducing escrow accounts first came up during the 1997 crisis to ensure that buyers at least received their downpayments back if developers failed to build and transfer property.

''The question is whether introducing escrow accounts today will resolve the problem. I don't think it will ease the situation a hundred percent. If the government implements the escrow system today, will property sales pick up? The answer doesn't differ much from the one on tax reduction.''

In any case, the developers that are surviving in current conditions are the very best in the industry while smaller ones have already fallen by the wayside.

From the point of view of investors and buyers, Dr Kessara believes this is the best time to buy a house if they have the money because prices are low with developers offering attractive discounts.

But she cautions against buying a condo to rent out or resell because property websites are full of offers.

''If you're thinking of buying and reselling in two months beware, because at that point many other condos might emerge in that area and if these developers can't sell they'll dump the price.''

http://www.bangkokpost.com/Yourmoney/14May2007_money60.php

[jumnien]

The wife and I are going up to take a deposit on our Rajadamri, Soi Mahadlek 1 condo that we've sold apparently. We never advertised it and only told the lady at the front desk we were thinking of selling or renting it out. Three potential buyers in a week, all Thai, took the best deal and that's that. I guess it was easier to sell because it is leasehold rather than freehold. I understand the freehold properties in Bangkok are a bit slow moving right now. That said I don't think prices are coming down.

[samtam]

Why is leasehold easier to sell than freehold?

[jumnien]

Leaseholds in the CBD are far less expensive than freeholds. Most people don't hold them for decades. They can easily generate 8-10% rental returns. The same size freehold in the same area would be almost twice the price but generate approximately the same rent. Renters just don't care to pay more for a freehold. Some foreigners are slow to buy leasehold. The Thais snap them up for the investment.

[Beardog]

Anyone know roughly how many condos there are in bangkok and pattaya,

how many are on the market at any one time, and a mean average of how long they take to sell?

Hi rott,

I am no real estate expert at all But I can tell you Pattaya is dying on the vine !

The market is flat & stale in condos in all ranges & the housing market is fairing even worse.

In soi Koa Talo there are over 200-300houses alone that are & have gone unsold for 3 years. tThis was the case even during the Boom era. I know 3 people who were real estate agents & only 1 works part time as he was able to sell 1 condo mid range & 1 cheap Charlie house. the other 2 agents rolled it up. seems like the only people who are on the upbeat mood are spec. buyers & hopefull real estate agents.

The Pattaya meetings when open forum revolve around everyone either trying to dump their condo (at a discounted price so they can get out from under it) & everyone talks about waiting to see what the government is going to do next as they change the laws seems daily.

I could care less buying a condo- have looked into buying land or a house with my girl & have friends that own condos & houses. While I do not forsee an actuall 1997 style crash, I do hear way many more people desperate for a sale. Besides this is Thailand , if one were to grease the wheels a bit say 10,000-20,000 baht I am sure someone would roll out the magic carpet on any 100% sold building as all the posts I read in 3 different forums

All say the fallout rate after deposit or the developer running off with the funds are at least in the 30% range,

I would guess until the Tanks stop rollin & the protests die down around BKK. We can Expect more of the same.

On the other hand if you were to buy for speculation 15 years down the road you would do good.

again the words I am sharing are what the threads have indicated within the last year with the interim government from all concerned farangs. please not trying to get in a pissing match, but last major thread on this issue revolved around 1 real estate agent(possible spec buyer also) against the entire forum.

seems to be a buyer beware right now. I have no idea about Bkk. But I do know friends from the U.S. England & Australia are a little scared to visit here with all the protests & militia activity let alone purchasing in a real estate investment in uncertainty. Pleasant hunting & I hope Thailand does turn around & the housing market in general

does a rebound. I myself will wait . I do not want to be like my neighbors getting thumped by the market right now.

[Fred Sanford]

The wife and I are going up to take a deposit on our Rajadamri, Soi Mahadlek 1 condo that we've sold apparently. We never advertised it and only told the lady at the front desk we were thinking of selling or renting it out. Three potential buyers in a week, all Thai, took the best deal and that's that. I guess it was easier to sell because it is leasehold rather than freehold. I understand the freehold properties in Bangkok are a bit slow moving right now. That said I don't think prices are coming down.

what price did that condo sell for?

[pkrv]

bubble bubble, toil and trouble.....thats it, keep building

livinginexile, could you please post a photo? thanks

Your money >> Monday May 14, 2007

REAL ESTATE / SMALL PROJECTS WITH BIG POTENTIAL

Niche developer lives up to name NINA SUEBSUKCHAROEN

Sena Development has bravely entered the inner city condo market with the low-rise The Niche in Sukhumvit Soi 49 at a time when fears are increasing of a property bubble.

The company's executive director, Dr Kessara Thanyalakpark, said that while she was concerned that the company could face a market bubble, she went ahead with the project because of its location and competitive price.

The Niche is attractively priced at a pre-launch level of 48,000 baht a square metre for units on the second floor of the eight-storey building. Situated deep inside Soi 49, it offers peaceful surroundings and a manageable size _ there are just 120 units compared to other projects that can run into hundreds of units.

While Sena's first condo is likely to do well among its middle-class target market, the fear of a bubble remains.

Dr Kessara agreed that an oversupply in the inner city and skyrocketing prices could cause a market crash, since real estate is prone to bubble markets.

The volatility is partly due to lack of information, she said. ''With stocks we see prices every day and there is a median price for a stock, but nobody can ascertain the median price of a condo.''

Another factor is the time lag between the conceptualisation of a project and its actual launch, which could be eight to nine months, by which time other developments could enter the market.

''Why is this supply flowing in? It's because people see that the market is good but as the flow becomes heavier people don't notice the gush and this leads to a bubble developing.''

Dr Kessara believes The Niche (above) is well positioned to find buyers but wonders about the wider market trend.

The government is on the verge of introducing measures _ essentially the same ones that were in place earlier _ to improve the property market. Among them are a reduction in the specific business tax for developers to 0.11% from 3.3%, and a cut in land transfer and registration fees to 0.01% from 2%. (ECNOURAGE BUILDING BUT NOT BUYING.....pure genius)

However, Dr Kessara questions the effectiveness of the proposals, pointing out that while they worked during former prime minister Thaksin Shinawatra's term, times are different now.

''The economy doesn't look good, the unemployment rate is high _ it's in the papers every day that people fear losing their jobs, people across the country are uncertain. ... Developers have reduced house prices by 10-20% but they still can't sell them and if they drop another 3-4%, how much is that going to help?

''Personally I don't think spurring the property market with tax cuts will help the situation greatly.''

Sena Development, which is preparing to list on the stock market, has come up with a campaign to cope in difficult times by allowing buyers of single houses to live there for 24 months before starting to pay for the property.

Dr Kessara also observed that the idea of introducing escrow accounts first came up during the 1997 crisis to ensure that buyers at least received their downpayments back if developers failed to build and transfer property.

''The question is whether introducing escrow accounts today will resolve the problem. I don't think it will ease the situation a hundred percent. If the government implements the escrow system today, will property sales pick up? The answer doesn't differ much from the one on tax reduction.''

In any case, the developers that are surviving in current conditions are the very best in the industry while smaller ones have already fallen by the wayside.

From the point of view of investors and buyers, Dr Kessara believes this is the best time to buy a house if they have the money because prices are low with developers offering attractive discounts.

But she cautions against buying a condo to rent out or resell because property websites are full of offers.

''If you're thinking of buying and reselling in two months beware, because at that point many other condos might emerge in that area and if these developers can't sell they'll dump the price.''

http://www.bangkokpost.com/Yourmoney/14May2007_money60.php

Your comments on "The Niche in Sukhumvit Soi 49", "48,000 baht a square metre", "eight-storey building", "there are just 120 units" - you give no comments on the total area of the building.

OK The Park is/was, 100k per sq meter but it is 35+28 stories (total 63 stories), with a total of 219 units comprising 87,000 gross square meters and 53,000 net square meters.

My god I think you will be putting new words into Quicksilva's mouth when I say compact and bijou, shoe box and cupboard space come to mind, but even worse Niche has two meanings. But horses for courses I say – However not high end at all - again out of market definition....

[pkrv]

Sorry just found the link for The Niche in Sukhumvit Soi 49

http://www.homespacethailand.com/a.php?c=h...mp;rc=homespace

Out of interest bingobongo - Is this really high end? which is of course what this thread is about.

[bingobongo]

there you go, extend credit to those who should not have it, the boom is officially over.....they do not have any more good credit risks, this seems similar to the sub-prime mess in the US

another sign of a healthy market right livinginexile? right, builders have so much inventory, they want banks to assume the risk.......pure genius......NOT, 1997 redux?

Builders want lending criteria to be relaxed

The National Credit Bureau (NCB) has been urged to shorten the availability of loan repayment records from three years at present to two years to increase credit opportunities for those who may have had bad repayment records in the past.

"The Credit Bureau and Lending Standards", Atip Bijanonda, president of the Thai Condominium Association, yesterday said the record duration of borrowers, whose credit information is collected by the NCB, should be flexible, depending on the state of the economy. (SO I GUESS ITS NOT JUST RICH TRYING TO BUY, IT IS THE INSOLVENT, ONCE A DEFAULTER, ALWAYS A DEFAULTER)

http://www.nationmultimedia.com/2007/05/15...ss_30034201.php

Edited May 14, 2007 by bingobongo

[backflip]

"there you go, extend credit to those who should not have it, the boom is officially over"

Funny, in an earlier post - where you referred to lenders tightening credit - you also claimed that supported your conviction that the Thai real estate market was collapsing. So, whether financial institutions tighten or loosen the loan process, you believe that the real estate market is dead. Too, the last clause I quoted indicated that there was a real estate boom. Doesn't it hurt to talk out of both sides of your mouth at the same time?

[bingobongo]

looks rosy but read further.....

PROPERTY / RESIDENTIAL DEVELOPMENT

PS says backlog will help it reach target

KANANA KATHARANGSIPORN

Business >> Tuesday May 15, 2007

KANANA KATHARANGSIPORN

Despite a drop in revenue realisation in the first quarter of the year, Thailand's second largest developer, Preuksa Real Estate Plc (PS), is confident it can achieve its 2007 revenue target of 10 billion baht due to its strong sales backlog.

Chief executive officer Thongma Vijitpongpun said the revenue drop was caused by poor market sentiment in 2006. But he expects the mood to improve by the second half of 2007 due to the election and possible property stimulus measures. (THIS GUY IS DREAMING)

At the end of the first quarter, PS recorded sales of 2.39 billion baht, a new high, up by 26% from the same period last year. But it realised 1.89 billion baht in revenue, down by 9% from the same period last year and a drop of 17% from the fourth quarter of 2006.

Net profits were 292 million baht, down 11% from the same period last year and down 21% from the fourth quarter of 2006 due to an increase in the company's marketing and advertising budget, said Mr Thongma.

He said the revenue target for the whole year would be contributed by its accumulated backlog worth four billion baht, which would be realised within the next five months.

Developers have been hurt by low consumer demand and market oversupply. (SO HOW WILL BUILDING MORE SUPPLY IMPROVE CONDITIONS? )

The company is also trying to reduce the rejection rate of its customers loan applications. : (SURE WHY NOT, LET THOSE CREDIT RISKS BUY AND WHEN THEY DEFAULT WITH THE SLOWING ECONOMY IT WILL REALLY GET INTERESTING) It joined the Government Housing Bank and Thai Credit Retail Bank, a subsidiary of the Thai Insurance Group, to help clients improve their financial records.

Since it set up its customer profile improvement team late last year, PS has reduced the loan-rejection rate by 2-3% from 27% in 2006, he said.

PS also shifted to condominium developments this year with the launch of two budget projects worth a combined 2.5 billion baht, targeting sales of 1.47 billion baht by the end of the year, said Mr Thongma.

Under the brand Ivy Condo, the company will launch a low-rise building worth 800 million baht, to be opened on May 27. It will be located in Ratchadaphisek Soi 20 near the Sutthisarn MRT station, comprising 399 units sized from 30 to 66 square metres and priced from 1.58 million to 3.8 million baht.

As well, a 1.7-billion-baht high-rise, located on the bank of the Chao Phraya River in Rat Burana, is scheduled for launch in June.

As condominiums are new for PS and after-sales service is important, the company is setting up a property management team for condominiums that are scheduled to be built by next year.

Condominiums next year will account for 8% of PS's units while single houses would decline to less than 40% from the current 42%, and townhouses to 56% from 58%, he said.

PS shares closed yesterday on the Stock Exchange of Thailand at 6.00 baht, up 35 satang, in trade worth 19.69 million baht.

http://www.bangkokpost.com/Business/15May2007_biz55.php

Edited May 15, 2007 by bingobongo

[bingobongo]

excuse me, but does this not sound like mortgage fraud? trying to "prepare" statements so the bank will underwrite the loan? i guess there are less "legitimate" viable homedebtors out there......

Prueksa puts blame on banks for poor Q1

Property company Prueksa Real Estate blames banks' tough mortgage-lending criteria for a 9-per-cent year-on-year fall in revenues in the first quarter.

"We have suggested ways customers can prepare their financial statements to pass banks' approval procedures," he said. (MORTGAGE FRAUD?)

"We believe our Ratchadaphisek project is different from others in the same location and still believe it will meet targets," Thongma said. (RIGHT THEY ARE ALL DIFFERENT UNTIL THEY ALL ARE EVENTUALLY THE SAME)

The company will stick with its plan to start 13 new residential projects over the remainder of the year. (THATS IT, KEEP BUILDING. NOTHING LIKE ADDING TO SUPPLY AS THE QUALITY OF BORROWERS ERODES)

http://www.nationmultimedia.com/2007/05/15...ss_30034212.php

Edited May 15, 2007 by bingobongo

[palm]

"there you go, extend credit to those who should not have it, the boom is officially over"

Funny, in an earlier post - where you referred to lenders tightening credit - you also claimed that supported your conviction that the Thai real estate market was collapsing. So, whether financial institutions tighten or loosen the loan process, you believe that the real estate market is dead. Too, the last clause I quoted indicated that there was a real estate boom. Doesn't it hurt to talk out of both sides of your mouth at the same time?

backflip you are absolutely right; but unfortunately you can never argue commonsense with people who can't afford to be in the high end market. I've seen this in Europe and America too.

Its just a case of sour grapes for these anti-Thai and anti-Thailand whingers. I'm going to be buying this month in CASH and paying all of my installments in CASH on a 102,000 to 108,000 baht sqm apartment. I've had my GF trying to squeeze the best price out of a developer and its been like getting blood out of a stone. It's a nice high end pad downtown being built by a liquid developer for me to live in maybe 1 or 2 days a week. Not a purchase to flip, and I'm not buy using 'Daddies' money, or via a loan, but using cold hard cash.

...and if the Thai baht falls over the next 2 years, the deal will be even sweeter for me.

Edited May 15, 2007 by palm

[cclub75]

Its just a case of sour grapes for these anti-Thai and anti-Thailand whingers. I'm going to be buying this month in CASH and paying all of my installments in CASH on a 102,000 to 108,000 baht sqm apartment. I've had my GF trying to squeeze the best price out of a developer and its been like getting blood out of a stone. It's a nice high end pad downtown being built by a liquid developer for me to live in maybe 1 or 2 days a week. Not a purchase to flip, and I'm not buy using 'Daddies' money, or via a loan, but using cold hard cash.

...and if the Thai baht falls over the next 2 years, the deal will be even sweeter for me.

Congratulation. We are very happy for you. We should perhaps organize a party.

I guess this is your "last word", like the TV game. So let me sum'up : you are buying, cash (spine chill spine chill !), a "high end" condo, to live 1 or 2 day a week (this is really trendy) and your GF tried hard to negociate a discount but the seller didn't move 2 inches from his price, only half of one...

Therefore, you are inferring that the market is booming.

Well... you can. I mean if you really want.

But from an analytical point of view, you should admit that it's rather... short.

Last point : if the THB is falling, I doubt that this deal will be sweeter... More probably a bit sour.

But I guess you are confused with exchange rates. One pill of "Lehman Brothers", day and night, should fix the problem.

[SiamSquare123]

if its close to the bts, people will buy.