Housing demand remains but buyers hesitant

[RafPinto]

11 hours ago, impulse said:

I love the title.  Demand remains, but there's no buyers.

 

Had to be a real estate agent who wrote that.

 

Same same for the ladies.

Demand still there but no sausage to be seen.

[RafPinto]

2 hours ago, onekoolguy said:

Where was your Duck hunting camp?

Alabama

[overherebc]

7 hours ago, Airalee said:

You’ve definitely got the right attitude.  It’s a home, not an investment. 
 

Too many people think they are getting rich off of housing inflation but unless you are an investor with multiple  properties (hopefully income producing) or a fix and flip investor, it’s just a more expensive roof over your head and if you sell, whatever you buy will have appreciated along with it.  After commissions/fees/taxes to sell and rebuy, you’re actually worse off.  People talk about getting on the “housing ladder” and using the appreciation to upgrade....but does that really work?  
 

Let’s look at the math (figures just for illustrative purposes)

 

Let’s say your income will allow you a $100k home and someday you want to upgrade to the $200k home.  Currently, you’re $100k away.  Then, property values double.  Your home is worth $200k (lets assume you’ve only paid off half the mortgage....a generous assumption) so you sell for $200k and after 5% commission (ignoring all other fees etc.) you net $190k...pay off the remaining mortgage and are left with $140k.

 

But....the previous $200k dream home has also doubled and is now $400k.  So, instead of being $100k away, you are now $260k away from realizing that dream.  Bzzzzzt....you lose.

 

Try getting a real estate agent to wrap their heads around that concept.  It’s impossible.  
 

 

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”. 
 

-Upton Sinclair

 

True.

While I understand the expat 'rent don't buy' the last place we sold was at the start offered for rent 15 years ago, 8000/month. My wife got a mortgage ( over 15 years) and as we both were working paid it off. At the time bought for 1,500,000. Sold recently for 5,000,000 ( cash ).

Luckily didn't have to buy again as FIL gave us a house.

So, we each put another 2,500,000 in our banks 

Re' your post on estate agents I was told it would have been better to rent.

[kynikoi]

I think the developers have had their loans frozen or some such similar measure. Developers manufacturers the whole of Thailand has been placed in a state of suspended animation. The whole thing very possibly backstopped by the big dog.

 

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

[kynikoi]

17 minutes ago, overherebc said:

 

True.

While I understand the expat 'rent don't buy' the last place we sold was at the start offered for rent 15 years ago, 8000/month. My wife got a mortgage ( over 15 years) and as we both were working paid it off. At the time bought for 1,500,000. Sold recently for 5,000,000 ( cash ).

Luckily didn't have to buy again as FIL gave us a house.

So, we each put another 2,500,000 in our banks 

Re' your post on estate agents I was told it would have been better to rent.

 

An exception that proved the rule.

 

There are now hundreds of thousands of condos on the market according to DD property. Each and every one of them are overpriced and nothing is moving.

[RafPinto]

3 minutes ago, kynikoi said:

I think the developers have had their loans frozen or some such similar measure. Developers manufacturers the whole of Thailand has been placed in a state of suspended animation. The whole thing very possibly backstopped by the big dog.

 

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

And now some building sites on hold because of Covid outbreak.

They must feel the heat.

[RafPinto]

1 minute ago, kynikoi said:

 

An exception that proved the rule.

 

There are now hundreds of thousands of condos on the market according to DD property. Each and every one of them are overpriced and nothing is moving.

The only thing moving is the rent. Moving downwards. Too many empty units. When close to end of lease, make an offer. Landlord not interested, move on. Plenty of new, better furnished places out there and they jump on you, being a farang and paying rent on time.

[overherebc]

1 hour ago, kynikoi said:

 

An exception that proved the rule.

 

There are now hundreds of thousands of condos on the market according to DD property. Each and every one of them are overpriced and nothing is moving.

 

Friend has been trying to sell his condo for 3 or 4 years now. He's dropped the price a lot and will take a 1.5/2mil loss just to get rid of it.  Hasn't had one offer.

[kynikoi]

2 hours ago, RafPinto said:

And now some building sites on hold because of Covid outbreak.

They must feel the heat.

 

Yes there's one right in back of us it's now completely been scuppered for about 2 months. This point is certainly valid but one of the hundreds of large condos that are sitting empty and have been for years and not only that but the future next few years do not look promising at all to sell these units.

 

How is it even possible that the banks don't foreclose on these properties???!

 

The only answer that I can come up with is the old adage when you owe the bank a million the bank owns you. When you owe the bank $500 million you own the bank.

[newnative]

2 hours ago, kynikoi said:

I think the developers have had their loans frozen or some such similar measure. Developers manufacturers the whole of Thailand has been placed in a state of suspended animation. The whole thing very possibly backstopped by the big dog.

 

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

    I'm curious as to which developers are sitting on multiple, unsold projects in Pattaya that have brought them 'essentially no income' ?  Lumpini, SC Asset, Sansiri, Raimon Land, and Supalai have all built large projects in Pattaya.  Lumpini, alone, has done 4,  Sansiri and Raimon Land 3 each. 

   There are probably some remaining unsold units in the projects, usually the least desirable or most expensive ones, but the majority have been sold and saying the developers received no income is, I think, false.  The foreign quota on most of these projects sold out so likely those buyers paid cash directly to the developers--I know I did when I bought condos at some of these projects. 

    Perhaps the story is different in Bangkok and there are some projects sitting empty and unsold there.  I don't think that's the case in Pattaya, although I don't pay too much attention to all the low-rise 'theme park' projects.  

[ThailandRyan]

6 hours ago, onekoolguy said:

Where was your Duck hunting camp?

Sacramento Valley in the rice fields.  Had a gated compound the farmer used as an equipment storage Area that we rented out a corner of during the duck season.

[ThailandRyan]

1 hour ago, overherebc said:

 

Friend has been trying to sell his condo for 3 or 4 years now. He's dropped the price a lot and will take a 1.5/2mil loss just to get rid of it.  Hasn't had one offer.

Many people in very similar situations.  I see houses on online sites reduced almost 25% from the initial offer, I had book marked and saved the original ones I was interested in, and they are still sitting on the market.  In the past the owners could rent them out during the high season and make some money to offset costs, but with the country now closed for the past 15 months+ they sit empty with no one renting them.  Should make good properties to buy at a deep discount for those who have the money, and those that own may just about break even.  

[kynikoi]

1 hour ago, newnative said:

    I'm curious as to which developers are sitting on multiple, unsold projects in Pattaya that have brought them 'essentially no income' ?  Lumpini, SC Asset, Sansiri, Raimon Land, and Supalai have all built large projects in Pattaya.  Lumpini, alone, has done 4,  Sansiri and Raimon Land 3 each. 

   There are probably some remaining unsold units in the projects, usually the least desirable or most expensive ones, but the majority have been sold and saying the developers received no income is, I think, false.  The foreign quota on most of these projects sold out so likely those buyers paid cash directly to the developers--I know I did when I bought condos at some of these projects. 

    Perhaps the story is different in Bangkok and there are some projects sitting empty and unsold there.  I don't think that's the case in Pattaya, although I don't pay too much attention to all the low-rise 'theme park' projects.  

 

It seems to be very different in Bangkok.

 

There was a huge condo complex that went up four towers it took them forever to get the lights on and now it just does not look to be remotely habitated.

 

There's another building I can see a condo from our window and it's been complete for the a year it's only been in the last few months that I seen one or two lights on in the evening.

 

Another condo across from the Korean embassy I don't remember the developer beginning with an S....Supalai. When I walked by some months ago it definitely looked far more full than I remember it a few years ago when it was pretty vacant. It's one of those projects where the better medium priced condos have been snatched up and the overpriced and crappy condos are left. That's where the Orange Line stop was planned but there is no orange line.

 

Also looking on the internet on DD property and seeing all these new developments that are going up I just presume that they are in more or less the same situation as what I can physically see.

 

Something else that I don't think anyone has considered including myself until this moment is all of the property that the developers own. Within a 20 minute walk where I live in central Bangkok there are probably the better part of a dozen huge plots of land that are sitting vacant or with some minor preparation for building on them.

 

If absolutely nothing else I just fail to see how any developer in this time of crisis could possibly be in the black.

 

Finally, in regard to Pattaya condos gets sold they get written off they're taking off the market it's such a gray area. Who really knows in this country what goes on with property??

[overherebc]

35 minutes ago, kynikoi said:

 

It seems to be very different in Bangkok.

 

There was a huge condo complex that went up four towers it took them forever to get the lights on and now it just does not look to be remotely habitated.

 

There's another building I can see a condo from our window and it's been complete for the a year it's only been in the last few months that I seen one or two lights on in the evening.

 

Another condo across from the Korean embassy I don't remember the developer beginning with an S....Supalai. When I walked by some months ago it definitely looked far more full than I remember it a few years ago when it was pretty vacant. It's one of those projects where the better medium priced condos have been snatched up and the overpriced and crappy condos are left. That's where the Orange Line stop was planned but there is no orange line.

 

Also looking on the internet on DD property and seeing all these new developments that are going up I just presume that they are in more or less the same situation as what I can physically see.

 

Something else that I don't think anyone has considered including myself until this moment is all of the property that the developers own. Within a 20 minute walk where I live in central Bangkok there are probably the better part of a dozen huge plots of land that are sitting vacant or with some minor preparation for building on them.

 

If absolutely nothing else I just fail to see how any developer in this time of crisis could possibly be in the black.

 

Finally, in regard to Pattaya condos gets sold they get written off they're taking off the market it's such a gray area. Who really knows in this country what goes on with property??

 

The attitude of I paid X so can't sell for less than X is something that will never go away.

[Airalee]

6 hours ago, kynikoi said:

I think the developers have had their loans frozen or some such similar measure. Developers manufacturers the whole of Thailand has been placed in a state of suspended animation. The whole thing very possibly backstopped by the big dog.

 

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

“If you owe the bank $100 that’s your problem.  If you owe the bank $100 million, that’s the bank’s problem”. 
 

- J. Paul Getty

 

Oops....Reading your subsequent post, I see you beat me to it. ???? 

[kynikoi]

1 hour ago, overherebc said:

 

The attitude of I paid X so can't sell for less than X is something that will never go away.

 

I think there are a few differences though. Many certainly of the middle-aged snd older crowd probably bought with cash. So that means if they don't get their price they're not moving on up. It also means that they're not cashing out and moving up country building a nice new home and settling in.

 

The younger crowd is a little bit different they've No doubt purchased with loans.

 

The former ending a career and perhaps sitting on cash doesn't need to sell. The latter certainly cannot afford to go underwater and as long as they're working and they can cover the mortgage then they just stick it out.

 

What you say is absolutely true but I don't think anyone is prepared to go underwater on a mortgage when they cannot buy another home especially a better one.

 

More to your point there must be massive amounts of black money sloshing around in this market. Because it's black it's fine parked safely in a condo even if it's losing value. That's where we as foreigners see the situation as completely mysterious and unfathomable the condo stands empty and has for months or even years and yet it's not sold.

 

The problem is of course corruption as it is everything in this country. Now it's come back to bite the nation because the property market is so tangled.

[impulse]

15 hours ago, Airalee said:

16 hours ago, newnative said:

     You can move up the 'property ladder' by buying, fixing up, selling at a profit, and then repeating that many times--eventually getting bigger and nicer properties.  My partner and I have done that here since 2010.  But, it does take work and many would not want to move every year or so.  

I said that in my post ...“fix and flip”...but how many people have the wherewithal to do that?  Not many I’d bet.

 

Do it too many times and they'll figure out you're working in Thailand without a WP.  Like those Italian guys a few years back that built boats.  Build one boat and it's a hobby.  But they had built and sold a few...  And they got away with it, too.  Until they didn't.

 

Don't get me wrong.  I love the idea.  But I'd hate to give that leverage to any local that may decide they don't like what I'm doing and rat me out.

 

[Airalee]

40 minutes ago, impulse said:

 

Do it too many times and they'll figure out you're working in Thailand without a WP.  Like those Italian guys a few years back that built boats.  Build one boat and it's a hobby.  But they had built and sold a few...  And they got away with it, too.  Until they didn't.

 

Don't get me wrong.  I love the idea.  But I'd hate to give that leverage to any local that may decide they don't like what I'm doing and rat me out.

 

Agree completely.  That’s why I won’t cross any lines, however nebulous they might be, with regards to working without a permit.  

[newnative]

4 hours ago, impulse said:

 

Do it too many times and they'll figure out you're working in Thailand without a WP.  Like those Italian guys a few years back that built boats.  Build one boat and it's a hobby.  But they had built and sold a few...  And they got away with it, too.  Until they didn't.

 

Don't get me wrong.  I love the idea.  But I'd hate to give that leverage to any local that may decide they don't like what I'm doing and rat me out.

 

     It becomes a business when you do renovation work for a property owned by someone else.  It's not a business or doing work without a WP when you hire a Thai company to install a new kitchen in a condo you own.  Likewise when you buy new tvs or appliances  from Powerbuy and have them delivered and installed.  Or when you hire Thai workers to wallpaper the walls,  put in new drapes, refinish the floors, retile the baths, etc.

[Jud Canada]

23 hours ago, onekoolguy said:

Then in two days I found 2 large pool villas in good neighborhoods. Both were priced at 4 million baht.

Where is this? 

[BritManToo]

20 hours ago, kynikoi said:

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

Unless they aren't developers, but Mexican drug cartels with containers of USDs to launder.

In which case better to sit in Thai property, than sit in sealed bins buried in the desert.

...... same with empty shopping malls ....... empty opticians shops ....... etc.

[cclub75]

21 hours ago, kynikoi said:

I think the developers have had their loans frozen or some such similar measure. Developers manufacturers the whole of Thailand has been placed in a state of suspended animation. The whole thing very possibly backstopped by the big dog.

 

There's absolutely no way that it developer can sit on multiple projects worth over a billion baht each and have them unsold over years essentially no income. Add to this bad, illiquid investment there are still additional expenditures. It's really impossible to think that these developers can hold on through all that without some help from above.

 

That's the key that people do not want to admit.

 

Just look at history !

 

-Japan, 1990. It was the end. Tokyo land was more expensive than whole California... Bubble exploded. We all thought : game over, Japan is over. And what happened ? Nothing. The BOJ started "QE", buying japanese paper (debts and shares). Have you heard of any big japanese bank going into bankrupcy ?

 

-Europe, USA, 2008. It was the end. Which bank failed ? None. Because the FED and the BCE starded what the Japanese did.

 

My point : 2021. Covid. It's the end of the world. Millions of empty condos. Real estate companies and then banks will kiss the dust.

But... nothing will happen.

 

Because thes system is too "stretched"... Nothing can fail anymore, because it would blow up the whole scheme.

 

Therefore : we will simply do more that what we did until now.

 

More "QE". More free money.

 

So empty condos and buildings ? Even empty cities (China) ?

 

A real estate company in a very bad shape ? A consortium of banks will buy it out. Case closed.

[impulse]

2 hours ago, newnative said:

     It becomes a business when you do renovation work for a property owned by someone else.  It's not a business or doing work without a WP when you hire a Thai company to install a new kitchen in a condo you own.  Likewise when you buy new tvs or appliances  from Powerbuy and have them delivered and installed.  Or when you hire Thai workers to wallpaper the walls,  put in new drapes, refinish the floors, retile the baths, etc.

 

If you buy something, maybe add value to it, and resell it for profit, it's a business.  If you supervise the guys working on your personal residence, you don't need a WP.  If you supervise people working at your business, you're no longer a passive investor.  You're working, whether they catch you or not. 

 

People get away with it all the time in Thailand.  Until they don't.

 

BTW,  I'm not against the idea.  In fact, flipping real estate could be a great path to getting a Thai WP, then Permanent Residence.  Invest enough capital, register it as a business, hire 4 Thai people and you got yourself a WP.  Pay taxes for a few years and apply for PR.  Of course, it's not that simple, but it sounds less dodgy than opening a restaurant or (my personal favorite) a bar.

[timberpond]

Fake news! My ex-neighbor just force sold his townhouse for 1.99 million which he bought 2 years ago for 2.3 million. 

[RafPinto]

15 hours ago, kynikoi said:

 

I think there are a few differences though. Many certainly of the middle-aged snd older crowd probably bought with cash. So that means if they don't get their price they're not moving on up. It also means that they're not cashing out and moving up country building a nice new home and settling in.

 

The younger crowd is a little bit different they've No doubt purchased with loans.

 

The former ending a career and perhaps sitting on cash doesn't need to sell. The latter certainly cannot afford to go underwater and as long as they're working and they can cover the mortgage then they just stick it out.

 

What you say is absolutely true but I don't think anyone is prepared to go underwater on a mortgage when they cannot buy another home especially a better one.

 

More to your point there must be massive amounts of black money sloshing around in this market. Because it's black it's fine parked safely in a condo even if it's losing value. That's where we as foreigners see the situation as completely mysterious and unfathomable the condo stands empty and has for months or even years and yet it's not sold.

 

The problem is of course corruption as it is everything in this country. Now it's come back to bite the nation because the property market is so tangled.

Ever heard of "negative equity"?

People get loans of 100% and often even more to buy furniture etc.

 

If new condos buying build, same area, selling much cheaper, automatically your unit is going down in price as well. Banks will realise that they borrowed you to much and that they sit on a negative equity and will ask to inject more capital which most won't be able to do.

Foreclosure would be the thing, many other countries would do.

Here, they just sit and wait and pray, all will be good again.

[ThailandRyan]

1 hour ago, timberpond said:

Fake news! My ex-neighbor just force sold his townhouse for 1.99 million which he bought 2 years ago for 2.3 million. 

That's called dumping a property and moving because there was either a need, a want or he was just escaping the location and did not want to be tied there anymore.  

[newnative]

1 hour ago, impulse said:

 

If you buy something, maybe add value to it, and resell it for profit, it's a business.  If you supervise the guys working on your personal residence, you don't need a WP.  If you supervise people working at your business, you're no longer a passive investor.  You're working, whether they catch you or not. 

 

People get away with it all the time in Thailand.  Until they don't.

 

BTW,  I'm not against the idea.  In fact, flipping real estate could be a great path to getting a Thai WP, then Permanent Residence.  Invest enough capital, register it as a business, hire 4 Thai people and you got yourself a WP.  Pay taxes for a few years and apply for PR.  Of course, it's not that simple, but it sounds less dodgy than opening a restaurant or (my personal favorite) a bar.

      Yes, I am 'supervising the guys' working on my own personal residence.  "Install the tv on this wall, please."  I am not doing any work on anyone else's condo or being paid any money by anyone else. 

     I disagree with your first sentence, by the way.  With your reckoning, anyone buying a condo and adding some 'value' to it with, say, drapes and furniture, and then selling it somewhere down the line is now running a 'business'.  Is it a business to go shopping at a drapery store, buy drapes for your condo, and have them made and installed?  I don't think so; I am not doing the work or getting paid.  I don't think shopping for myself--which is what I do--is considered doing work requiring a WP.   If I was hired by someone else and paid to do their shopping, yes, that would be considered work.   

[newnative]

1 hour ago, timberpond said:

Fake news! My ex-neighbor just force sold his townhouse for 1.99 million which he bought 2 years ago for 2.3 million. 

    Not the end of the World.  Two years of rent at 15,000 baht a month would have cost him 360,000 baht.  Lost a little but he got to live in his own space for 2 years without the headaches of a landlord.   If the sale was forced he must have needed money so now he has a big chunk of change in his pocket that he didn't blow already on wine and women.  Onward!

[RafPinto]

16 minutes ago, newnative said:

    Not the end of the World.  Two years of rent at 15,000 baht a month would have cost him 360,000 baht.  Lost a little but he got to live in his own space for 2 years without the headaches of a landlord.   If the sale was forced he must have needed money so now he has a big chunk of change in his pocket that he didn't blow already on wine and women.  Onward!

If it was his money.

Maybe the money went straight to his bank or even, he owes more money than he repaid now.

[kynikoi]

4 hours ago, BritManToo said:

Unless they aren't developers, but Mexican drug cartels with containers of USDs to launder.

In which case better to sit in Thai property, than sit in sealed bins buried in the desert.

...... same with empty shopping malls ....... empty opticians shops ....... etc.

 

Spot on.

 

Luxury goods industry