Condo market devastated by pandemic - Chinese can't pay for their properties

[spiekerjozef]

2 hours ago, rooster59 said:

In many cases 30% had been paid and 70% was due but not coming.

and 80% of the buildings were a scam anyway with no interest in building them.

[onebir]

4 minutes ago, polpott said:

Correct many heavy suitcases coming over from China, going back empty.

Maybe at one point, but I think this may have stopped/dimished around mid-2019. Around then the rules on cash currency exports were tightened (particularly for RMB for some reason) & they started looking for cash during security checks on flights out of China. (Source: friends on said flights.)

[Airalee]

2 hours ago, Orton Rd said:

so should be thousands of repossessions coming up and bargains to be had?

Go to any bank website (or property website) that lists foreclosures for sale.   You will see great examples of the dross that’s for sale.  In the 8 years I have looked at those listings,  I’ve seen banks dumping dozens of condos in some of the nastiest buildings possible.  Same goes with houses.  And never have I seen something I would consider purchasing.  
 

In other words, nice stuff does get foreclosed on, but you and I will never see it for sale or get a chance to buy it.

[Orton Rd]

 

2 minutes ago, Airalee said:

Go to any bank website (or property website) that lists foreclosures for sale.   You will see great examples of the dross that’s for sale.  In the 8 years I have looked at those listings,  I’ve seen banks dumping dozens of condos in some of the nastiest buildings possible.  Same goes with houses.  And never have I seen something I would consider purchasing.  
 

In other words, nice stuff does get foreclosed on, but you and I will never see it for sale or get a chance to buy it.

House was auctioned by the bank up the road a few weeks back, went on first bid of 2.2 mil, worth almost double. Only one bidder- the head of the residents committee, nobody else knew about it, many <deleted> off!

[FlyingThai]

2 hours ago, andre47 said:

''Even those who had already bought units were unable to continue with payments due to problems in transferring funds as they couldn't get to Thailand. ''

Why cannot transfer funds?

It's very very difficult to move large sums of money out of China. Remittance has always been a big issue, just ask expats who get their salary paid in China. Transferring it home is a huge pain. For average Chinese people but also government officials it's highly regulated. Usually they need to present a bill to legitimize their wires abroad.

 

In Macao you have "jewelry shops" where Chinese customers "pay" with their credit cards for expensive merchandise but in reality no jewelry is ever involved. They are withdrawing gambling money (HKD) to use at the casino and also deposit it locally.

[rvaviator]

2 hours ago, mommysboy said:

It's an excuse of course.  The fact is even China is in dire economic straits (or its ordinary people anyway).

Ordinary people from China does not buy Condos in Thailand ... Lots of very rich people in China ... Very many made huge profits when the property market opened up to a more free market economy style ... Then you have factory owners, traders, exporters etc etc .... All fully in love with the capitalistic ethos of making money .... 

 

But can not freely export money out of the country  .. Sure you can buy western goods as much as you like .. Go to any high end shopping center in Beijing. No shortage of fancy stuff to buy ..

 

But exporting the money out .. now that is a different story all together ... Especially for buying foreign personal property. It can be hard enough to  get export license for school fees to send your kids to western schools ....

[Grumpy one]

1 hour ago, Puchaiyank said:

Thai logic...too many vacant condos...raise the price!

This is applicable to any business here.

No tourists, put up fares etc 

[from the home of CC]

as many units are bought to be turned into illegal 'hotels' it looks good on them..

[rvaviator]

4 minutes ago, FlyingThai said:

It's very very difficult to move large sums of money out of China. Remittance has always been a big issue, just ask expats who get their salary paid in China. Transferring it home is a huge pain. For average Chinese people but also government officials it's highly regulated. Usually they need to present a bill to legitimize their wires abroad.

 

In Macao you have "jewelry shops" where Chinese customers "pay" with their credit cards for expensive merchandise but in reality no jewelry is ever involved. They are withdrawing gambling money (HKD) to use at the casino and also deposit it locally.

For an expat who are paid in RMB - You can expert the money out, "no problem" as long as the company you work for can show proof that they have paid your income tax. Depending on the company you work for .. or if you change jobs etc .... That can sometime be a problem. Or working for big companies who will issue the required document once every year.  Its a lot of paperwork that you have to give to the bank when you do your wire. Once done, its super fast .... Much faster than sending money from US to Thailand.

[joecoolfrog]

2 hours ago, mommysboy said:

It's an excuse of course.  The fact is even China is in dire economic straits (or its ordinary people anyway).

Either that or a lot of Chinese cash was to be laundered.

Edited September 12, 2020 by joecoolfrog

[ChipButty]

I have some friends who work in one of the biggest developers in Thailand they told me about this happening weeks ago lots of units the buyers cannot complete on, if they dont complete by a certain date the developer just takes over, I was wondering if the buyer had paid 70% of the price Im sure that would cover the cost of the units then the developer makes money he can sell them again,

[Airalee]

40 minutes ago, Orton Rd said:

 

House was auctioned by the bank up the road a few weeks back, went on first bid of 2.2 mil, worth almost double. Only one bidder- the head of the residents committee, nobody else knew about it, many <deleted> off!

Doesn’t surprise me in the least.  Same thing happened in the US after the housing bubble popped and the properties with any true value will go to insiders or the bank will just keep it on its books.

 

Here is a great example....a news story from 2009 about Wells Fargo and one of their Malibu REOs

 

“A story is circulating in the LA media today about a Wells Fargoexecutive, Cheronda Guyton, who allegedly moved into a foreclosed propertybeing held by the bank and threw lavish parties there.“

 

https://www.cnbc.com/id/32800279

 

As a housing bubble blogger back in the days, I (and other bloggers) used to dig into property records obsessively until the “public” records were made not so public.  They hated us bloggers showing the shenanigans of the banks.

 

In fact, when I lived in Seattle for a couple years (2007-2009), I found a condo (one of the nicest, most prime condos in the city) that had been bank owned since 1994.  That condo finally was put up for sale...22 years after the bank took possession.  It’s still for sale.

Edited September 12, 2020 by Airalee

[Captain Monday]

And dirty "ai Farang" like me keep paying  6 months condo fees at a time for residences we cant access in a Kingdom we are not allowed to enter.

 

At what point do you just walk away, like the Chinese?

[NightSky]

2 hours ago, Orton Rd said:

so should be thousands of repossessions coming up and bargains to be had?

 

Wouldn't it be a bit eerie being one of a handful living in a 20 story block?

[geisha]

The way things are going in the world at the moment, I doubt it would be sensible to buy anything on plan/ unfinished . Unless you can afford to loose the money of course. I don’t know anyone who would put his money into an unstable country where rumors abound.

[Orton Rd]

2 minutes ago, NightSky said:

 

Wouldn't it be a bit eerie being one of a handful living in a 20 story block?

went to look at one like that years ago called 'Evergreen tower' next to the Nation Tower building (newspaper), spooky and run down, at night just a few lights on. You certainly would not want to be using the lifts

[Airalee]

4 minutes ago, ChipButty said:

I have some friends who work in one of the biggest developers in Thailand they told me about this happening weeks ago lots of units the buyers cannot complete on, if they dont complete by a certain date the developer just takes over, I was wondering if the buyer had paid 70% of the price Im sure that would cover the cost of the units then the developer makes money he can sell them again,

Foreign buyers seem to have roughly 30-40% deposits on the condos.  I bought my condo recently from a purchaser who “couldn’t close”.  He was happy enough to get 5% back.

I thought the same way as you...that a developer would be happy to have the person walk away from the deposit and then resell at a 30% discount (to the original presale price) thereby making 100% of what they were due.  Apparently, that does not appear to be the case as the developer offered incentives to people to close before a certain date (no transfer fees for example).  Shows what these things are really worth.  Now, the developer has cut prices significantly, and I guess time will tell if they actually get them sold.  After a certain point, the developer will work with their lender and just sit on the condos or maybe rent them out themselves and wait for the market to recover (good luck with that one) as is happening in one project I have heard about (2nd hand information for that one)

[Orton Rd]

3 minutes ago, geisha said:

The way things are going in the world at the moment, I doubt it would be sensible to buy anything on plan/ unfinished . Unless you can afford to loose the money of course. I don’t know anyone who would put his money into an unstable country where rumors abound.

There is a vlogger from the UK on YT Thailand smiles I think it's called who just put 6 million baht into building a resort in the middle of nowhere on borrowed funds, now he cannot decide if to go back to the UK or stick it out with zero customers.

[Youlike]

3 hours ago, rooster59 said:

Even those who had already bought units were unable to continue with payments due to problems in transferring funds as they couldn't get to Thailand. 

 

So they still pay cash in hand? Even for a condo? And china doesn't have digital payment systems these days???

 

I dont believe it!

[Scot123]

2 hours ago, johng said:

There are still some unsold condos around from that time..its seems the banks just sit on them  waiting and waiting for someone to come along and clear the debt + interest  somehow avoiding writing it off as non performing loans.

I read something interesting that the banks use all these properties on their books at up to 3 times their real value meaning  its one of the biggest frauds in Thailand. 

[FritsSikkink]

3 hours ago, andre47 said:

''Even those who had already bought units were unable to continue with payments due to problems in transferring funds as they couldn't get to Thailand. ''

Why cannot transfer funds?

Mainland Chinese have a limit on currency they can take out of the country legally.

[FritsSikkink]

3 hours ago, mommysboy said:

It's an excuse of course.  The fact is even China is in dire economic straits (or its ordinary people anyway).

No it isn't.

[Destiny1990]

Seems prior to corona it was mainly the chinese still buying units in Thailand begs the question why did the other nationalities stop buying?

[david555]

3 hours ago, andre47 said:

''Even those who had already bought units were unable to continue with payments due to problems in transferring funds as they couldn't get to Thailand. ''

Why cannot transfer funds?

Looks more Chinese authority's keeping an eye on certain money transfers ….. ????  as all farang can still transfer for their visa extensions and other requirements 

Edited September 12, 2020 by david555

[Dave0206]

3 hours ago, andre47 said:

''Even those who had already bought units were unable to continue with payments due to problems in transferring funds as they couldn't get to Thailand. ''

Why cannot transfer funds?

could be a few reasons 1) hong kongers can not because of banking in hk? i think not as hk has a very sophisticated banking system

2) perhaps willing to risk 30% investment especially if thinking market could crash greater than 30%

[david555]

13 minutes ago, Scot123 said:

I read something interesting that the banks use all these properties on their books at up to 3 times their real value meaning  its one of the biggest frauds in Thailand. 

That is why those big promotors sometimes delay to deliver the owners book , as long they don't give those  out the condo value is still their collateral against  their bank building  loans ….. yes ...very close to a fraud ….

Edited September 12, 2020 by david555

[FinickyFarang]

12 minutes ago, Orton Rd said:

There is a vlogger from the UK on YT Thailand smiles I think it's called who just put 6 million baht into building a resort in the middle of nowhere on borrowed funds, now he cannot decide if to go back to the UK or stick it out with zero customers.

I believe you’re talking about Simon at Land of Smiles Thailand (LOST).  
 

His situation is a little different.  He and his wife have owned the land for years and built a house on it, plus a few other structures. 
 

the 6 million was for building and setting up a resort on the land.  
 

From the videos it sounds like he had a private lender that is willing to hold off on getting their money back.  
 

He’s thinking of moving back due to the fact that he’s got a resort in the middle nowhere in Phetchaburi.  
 

He was counting on his YT subscribers to keep the place full.  
 

That in itself seems like a bad idea.  
 

Making things worse is that he overspent (more than his loan - dipping into his life savings) on the place.  
 

Did he really need a gym with weights and treadmills in his little resort?  

 

Did he really need to buy a new vehicle for running people to and from the airport?  
 

Was a pool absolutely necessary?  
 

He built a place based on what some random folks on the internet told him.  
 

He burned through the loan plus a chunk of his savings and then Corona hit and he was stuck with a resort and no customers.
 

Sad really.  I like his videos.  
 

[Mister MXYZPTLK]

Why are all of you so ‘Down’ on the Chinese. Why are you against them?  There are a wonderful race. And let me remind all of you, they make the best Chinese Food in the world!

[Megasin1]

Thai Rak China, you are worrying needlessly about the Chinese, they will sort it all out for them, probably throw in a BTS station or 2 as a reward for their mental suffering ????

[hotchilli]

3 hours ago, rooster59 said:

He said travel restrictions meant that 98% of potential buyers couldn't get to Thailand. Most of these were Chinese people from the mainland and investors from Hong Kong.

So 98% of condo construction was aimed at foreign buyers, only 2% of Thais would potentially be interested.

That is so out of balance it's almost unbelievable.