Condo purchases: Foreigners buy 35% LESS - Elite card scheme won't change things

 

 

A leading real estate expert has said that far less foreigners are buying real estate - mostly condos - in Thailand contributing to a turndown in the sector. 

 

And plans to use the Elite Card scheme to promote investment are little more than a drop in the ocean. 

 

Wichai Wiratkaphan told Thansettakij that in 2020 around 10% less property changed hands overall - 358,490 sales were recorded in total. 

 

But condos bought by foreigners were 35.3% down compared to 2019.

 

They bought 8,258 condo units in 2020.

 

The share of that market dropped from 10% of the total to just 6.8% year on year.

 

Foreign investment in condos in the last three years were led by the Chinese with 58%. In second place were Russians (the media suggested 51% but Thaivisa suggests this is an error) with French people in third at 3%, British in fourth at also 3% and Japanese at 2%. 

 

Tellingly Wichai suggested that the much vaunted "Condo purchase for an Elite Card and long term residency" plan would not have much effect on the downturn. 

 

Source: Thansettakij

 

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4 minutes ago, webfact said:

And plans to use the Elite Card scheme to promote investment are little more than a drop in the ocean.

Calling Dr. Watson!

6 minutes ago, webfact said:

 

But condos bought by foreigners were 35.3% down compared to 2019.

 

Now let me make a wild guess why that is.

 

Could it be because there are not much foreigners left, and even less can enter Thailand?

10 minutes ago, webfact said:

And plans to use the Elite Card scheme to promote investment are little more than a drop in the ocean

Who would've thought... 

11 minutes ago, webfact said:

Foreign investment in condos in the last three years were led by the Chinese with 58%. In second place were Russians (the media suggested 51% but Thaivisa suggests this is an error) with French people in third at 3%, British in fourth at also 3% and Japanese at 2%. 

 

Do the Europeans and Japanese know something the Chinese do not?

17 minutes ago, webfact said:

a drop in the ocean

 

Thailand's speciality!

 

 

15 minutes ago, Susco said:

 

Now let me make a wild guess why that is.

 

Could it be because there are not much foreigners left, and even less can enter Thailand?

Even the Chinese are selling their condos in bulk now. 

11 minutes ago, timendres said:

 

Do the Europeans and Japanese know something the Chinese do not?

They were just moving their money out of China and putting it into whatever countries they could at the time.

hahahahaha....cut your prices bozos......ever heard of supply and demand?

1 hour ago, andy said:

Curious why every time you see one of these articles, they never mention 2 important points: the strong baht, and the asking prices which seem to have no bearing in reality given the oversupply.  It's almost as if the Thai press will not allow discussion of this...

 

There is a condo building in Bangkok I check listings for from time to time, as I like the location and used to live in the general area.  This place is not a new build (around 10 years old I think), and is not in an area frequented by tourists, but is near the MRT.  You would think prices would not be too crazy anymore, especially now.  Just checked it again, there are 75 units up for sale in the building ????...despite this, 1 bedroom units that are not shoebox sized are listed for between 6-9 MB ????. 

It’s called” saving face”. Go bankrupt rather than meet the market

3 hours ago, dcnx said:

Even the Chinese are selling their condos in bulk now. 

Have a source for this? 

I’m surprised the drop is only -35%, if someone had asked me to guess I would have said -80%.
 

I was talking to an agent a while back and she reckoned there definitely were bargains to be had, many of which were from executors liquidating property of COVID victims - mostly from Europe - and they were accepting almost any offer. Chilling really.

 

Otherwise, the ridiculously high market prices have nothing to do with...

2 hours ago, Brickbat said:

It’s called” saving face”. Go bankrupt rather than meet the market

 

The Thai banks allow Thais to hock themselves up to the eyeballs, nobody wants to lose money on a property sale so they have a break-even price which is always unrealistic; unless they sell at that price they go bankrupt either way. The oversupply means they almost always lose - and the banks inevitably win.

5 hours ago, andy said:

the asking prices which seem to have no bearing in reality given the oversupply.

 

It seems rental prices in the Pattaya area are adjusting but sales prices haven't adjusted yet.   I'll buy at the right price but my guess is that the market hasn't come close to bottoming yet.  

Time to suspend the foreign quota for a couple of years.

5 hours ago, shortstop said:

 

It seems rental prices in the Pattaya area are adjusting but sales prices haven't adjusted yet.   I'll buy at the right price but my guess is that the market hasn't come close to bottoming yet.  

 

Frankly, in Pattaya the rental prices were more unrealistic pre-covid, often ppl looking for 7-10% like returns on long term 12- months contract.

 

The 4-6% is more than enough premium over a 0-1% bank deposit interest environment.

 

I am more surprised that government/land office still insist that condo prices are rising, and tax on their fictional values not actual contract prices.

11 hours ago, Pedrogaz said:

hahahahaha....cut your prices bozos......ever heard of supply and demand?

Even if people cut prices ... most property won't sell I think. There's just too few buyers.

 

So perhaps it only makes sense to sell for a low price right now if you really need the money or you have no faith in the long term prospect of property in Thailand. 

15 hours ago, timendres said:

 

Do the Europeans and Japanese know something the Chinese do not?

That Thailand is quite a bit farther away from them than it is from China, for one thing...

2 hours ago, tingtong said:

I am more surprised that government/land office still insist that condo prices are rising, and tax on their fictional values not actual contract prices.

Given the bold bit, why are you surprised?

An off topic post and a reply about Modified Quarantines has been removed,

 

Some troll posts have been removed.

17 hours ago, timendres said:

 

Do the Europeans and Japanese know something the Chinese do not?

do the Chinese know something that others do not?

Most Bangkok condos are overvalued by at least 25%,

based on my anecdotal experience.

 

Some places could be over-valued by as much as 40-45%.

 

 

Just now, varun said:

Most Bangkok condos are overvalued by at least 25%,

based on my anecdotal experience.

 

Some places could are likely over-valued by as much as 40-45%.

 

 

 

10 hours ago, tingtong said:

7-10% like returns

 

It seems real estate agents like to tout gross ROI but net ROI which subtracts CAM charges and other expenses seems to me like a more realistic way to calculate ROI.

 

 

9 hours ago, wolf81 said:

Even if people cut prices ... most property won't sell I think. There's just too few buyers.

 

 

 

Agreed.   Since i am happy with my rental I will only buy in my preferred location in a building I like for around 25K per sqm.

 

Sellers are cutting prices but only to a level that would have been a good deal a year ago.  

I wrote to Elite to find out more and four weeks later am still waiting for a reply.  Perhaps they need to hire a few foreign teachers to teach them to read and write English.

 

On 2/17/2021 at 9:59 PM, dcnx said:

Even the Chinese are selling their condos in bulk now. 

 

I would like to know your source as I don't believe a word of it.

 

Chinese investors are buying property worldwide by borrowing cheap cash generated from their overvalued properties inside China.  So far, China has been propping-up the lender banks and have shown no real signs of wanting this US$52 trillion market to fail.  Until China's property bubble burts, Chinese will keep buying overseas.