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ANALYSIS | by Michael Bridge

It remains one of the world's fastest-growing economies and owning property in Thailand has been a fashionable way to profit from the nation's rise. 

 

The country still remains one of Asia's more promising markets as it opens to foreign investment, especially with the expansion of the Eastern Corridor.

 

So, what is predicted to happen to house prices in 2022? 

Thailand Property Market Index, the Price Index of Bangkok residential property has been decreasing since Q4 2020. 

It decreased from 197 points to 190 points in Q1 2021, to 183 points in the following quarter, and to 178 points in Q3 2021. Overall, the Price Index decreased by 11% compared to the same period in 2020.

 

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The index however did report that the locations with the highest price growth are mostly located around city fringes, and the outskirts of Bangkok.

Meanwhile CBRE the international real estate agents stated in their 2022 Thailand Real Estate Market Outlook that low-rise properties will be popular.

 

They state that with no new projects launched in the Bangkok downtown condominium market in almost three quarters, for the first time in history, strong demand for low-rise housing continues.

This is as buyers’ preferences shift to low density, larger and more adaptable spaces. 

This year, developers will cautiously consider new projects which have to cater for domestic real demand.

Is buying a condominium in Bangkok a good investment?

Under the right circumstances, buying a condo in Thailand can be a rewarding purchase and normally has been a good investment. 

 

If you are a foreigner interested in buying a condo in Thailand, there are a few  issues you need to be aware of. 

 

Remember foreigners may only own 49% of a single condo development, although it is hoped to assist sales that this rule maybe amended.

 

Who to believe?

 

Some experts say that with fewer mortgages being agreed and the ongoing cost-of-living crisis that has been worsened by the Russia-Ukraine war, prices may stay stagnant.

However, the bottom line is the fact that in times of crisis people have turned to gold to hedge their bets. 

But gold prices fell to a near three-month low on Monday, the gold bar has lost some of its sparkle.

So maybe if the developers wish to move units quickly, they may start to reduce or offer some crazy deals for cash buyers.

If you are keen golfer, owning a villa on a course designed by Jack Nicklaus might tick all the boxes, especially if you do not need a mortgage.

At the end of the day if you are buying for yourself as a home to live in and not for investment, then now could be an excellent time to pick up a real bargain in a fantastic location.

As they say, location, location, location…...and of course cash is always king! 
 

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I've been watching the Thai real-estate market for 30+ years.  I there are much better ROI's than the Thai real estate.

 

 

Analysis? Pigs Harris.

I can actually own gold...

Hard for my ex GF to keep from being hunch back from the gold amulets. 

Give her a little push going down hill and she could never stop...

2 hours ago, webfact said:

As they say, location, location, location…...and of course cash is always king! 

Never believe in the saying that "cash is always the king". In the US you can leverage appreciated value of one house to purchase another and some of my friends own a large number of houses for rental incomes, all delivering cash flows. They are also millions in debt on their mortgages and their mortgages are paid from rental incomes. I have my self purchased two houses on credit one is fully paid up and the other is generating AirBnb incomes in Las Vegas that leave me a few hundred dollars after maintenance company fees and mortgages. For the last two decades with super low interest rates, it was always better to buy using credit. Yes, interest rate are rising now but still in the low range. I earn more than thousand dollars in credit card cash back every year and even buy candy using credit cards. ANd credit cards provide additional security against fraud. i Hardly use any cash except when I am in Thailand and vendors won't take CC. Never met a vendor in the USA and Europe who does not take CC. For me credit is the king. 

Gold and Real Estate have ZERO to do with each other in Thailand or elsewhere. Click click nothing!

46 minutes ago, alex8912 said:

Gold and Real Estate have ZERO to do with each other in Thailand or elsewhere. Click click nothing!

This is Thai Visa, anything is possible... ????

Would it be presumptuous to assume the author is in the real estate business?

A property costing $500,000 (anywhere in the world) will cost you 272 ounces of gold as of 4 pm Pacific ST on Tuesday May 10.

 

The gold bugs tell us that when Armageddon finally arrives (assuming we're not already here), we will need loads of gold just to go out and buy a loaf of bread (or bag of rice).

 

Personally I have not met one person who owns even one ounce of gold (except maybe "accidentally" in a watch or necklace). 

1 hour ago, timendres said:

I can actually own gold...

I owned 49% of a house at one time before an ex-wife & Thai courts took it.

Pretty sure if I won a competition and the prize was a million quid house along the Thames in the UK I'd tke the house rather than a million quid in gold !

 

That said , if they offered the same in Thailand - house on the river in BKK or the gold - I'd take the gold !

4 hours ago, webfact said:

They state that with no new projects launched in the Bangkok downtown condominium market in almost three quarters, for the first time in history, strong demand for low-rise housing continues.

Let come to Sukhumvit 59 and see 3 giant condominiums are going up, giant like 45 floors and higher, and this is only in one Soi...

News-blip must be written by Thai Condo Assoc.

 

Condos as an investment vs renting, IF, living there for 10 yrs.  As a buy & sell or rent investment, not so much.  Surely better opportunities in western home country.

 

Inability to own land is a huge downside to Thailand, since relying on a trusting partner.  Rare to impossible to find for some.  With divorce rates at about 50% worldwide, wives/spouses are not the best partnerships.

Lots of repossessed homes in the mooban I live in.  Some have been vacant for 8 years or more.

 

Also gold has not dropped that much.

It would be hard to see Bangkok condo real estate being an attractive investment without foreigners being here in droves to soak up the resale units being. I doubt that my apartment has appreciated in value, given the volume of new builds that sprang up around us within the last 4 years. 

 

In hindsight I wish I had hunted down a good townhouse needing redevelopment or remodelling in Dusit or somewhere similarly cherished by the local middle class because some of those structures are well placed in quiet soi's and offer great overall square footage of living space.

 

 

4 hours ago, webfact said:

As they say, location, location, location…...and of course cash is always king! 
 

Right now the location is in the US stock market if you have the balls to buy the dip.

1 minute ago, rwill said:

Lots of repossessed homes in the mooban I live in.  Some have been vacant for 8 years or more.

Plenty round me that have been on the market for many years, not repossessed, but remaining unsold. Hard to be optimistic about owning Thai property with such obvious lack of buoyancy. Perhaps condos in the Capital not in flood areas is the  best bet.   

Never understood the many properties built that are never even offered for sale but just stand there empty for years ! Money laundering was one thought. There is one moo bahn, has may be 30 or more homes built, and not one is occupied nor offered for sale. Blocks of town houses built, then nothing, just left there. Very odd !

1 hour ago, blazes said:

A property costing $500,000 (anywhere in the world) will cost you 272 ounces of gold as of 4 pm Pacific ST on Tuesday May 10.

 

The gold bugs tell us that when Armageddon finally arrives (assuming we're not already here), we will need loads of gold just to go out and buy a loaf of bread (or bag of rice).

 

Personally I have not met one person who owns even one ounce of gold (except maybe "accidentally" in a watch or necklace). 

Then you don't know many people who live in Thailand or for that matter invest on precious metals.

 

However to stay on topic as dar as housing g prices here in Thailand, houses and condos are overpriced. There needs to be a real-estate board and an actual appraisal board that is certified in reality not the stratosphere.

Be nice if I was able to buy real estate in my actual name.

1 hour ago, madmitch said:

Would it be presumptuous to assume the author is in the real estate business?

From the article...."CBRE the international real estate agents stated in their 2022 Thailand Real Estate Market Outlook that low-rise properties will be popular."

Why would they lie?

"One of the fastest growing economies"

 

I was curious so took a look at both GDP numbers and debt levels going back to 2010.

 

Conclusion: there was little to no organic growth in Thailand for a decade. What growth there was---and it wasn't that much---was debt fueled.

 

The rise in corporate bond issuance was about +11% per year. Household debt is at an all time high. Thailand theoretically has lots of FX reserves, but these are not in a box somewhere. They are already committed to something. The govt recently announced another huge sovereign debt offering, so flush with cash they are not.

 

The banking sector is a black hole, owing to shinanigans allowed during Covid. First, there were several periods of debt moratorium, which masks NPLs. Second, accounting rules allowed for imputed interest, meaning that a bank could run interest payments received through the income statement, even if the borrower wasn't repaying.  Third, recent rule changes now allow banks to buy asset management companies that engage in debt workouts. Of course, the rules regarding consolidation on the parent's balance sheet are hazy, so it seems this was done to allow banks to shift NPLs to a self-owned debt workout company, then be allowed to not consolidate. In other words, the NPLs become hidden.

 

None of this bodes well for RE prices, so.....even a falling gold price looks better than what is an increasingly opaque RE and banking sector.

20 minutes ago, rwill said:

Lots of repossessed homes in the mooban I live in.  Some have been vacant for 8 years or more.

 

Also gold has not dropped that much.

Must be 20,000 open units in the Pattaya Jomtien area, no? Do the developers investing billions know something we don't know?

I did notice lots of road improvement just south of Jomtien ...Highway 7 exit, major Sukhumvit expansion and didn't I hear something about a skytrain or rail line is headed this way?

I do know Icon Siam Mall is planned near Ocean Marina and heard rumors a long time ago the Disney has eyes on land there. 

 

There are many beautiful and well-located condos around the country so there are plenty to choose from. These may also appear to very reasonably priced but there are many other costs which need to be considered.

Coupled with this is the plethora of paperwork and formalities of the bureauratic Thai system. To own a property, whether foreign or Thai company owned, you must possess the Chanot and Tabian Baan, ie, the land registry plan and the blue book. Usually, these will be transferred when you pay the final payment for the property. However, some developers, being in financial difficulties, have not transferred them to the owners for more than four years. Owners of units at Amari Residences (The Legend Residence) have been waiting for their chanots to be transferred from Nova Legend Group who appear to be in financial difficulties, having used the chanots as security for a loan from Siam Commercial Bank. An action group has been formed to progress claims.

5 hours ago, webfact said:

It remains one of the world's fastest-growing economies and owning property in Thailand has been a fashionable way to profit from the nation's rise. 

Oh, really... ????

 

5 hours ago, webfact said:

The country still remains one of Asia's more promising markets as it opens to foreign investment, especially with the expansion of the Eastern Corridor.

Oh, really... ????

 

This keen analysis is up (or down) to the usual standards of the inestimable Mr. Bridge ????

Shares yield no costs

Houses have costs

Gold no yield

11 minutes ago, khunjeff said:

This keen analysis is up (or down) to the usual standards of the inestimable Mr. Bridge ????

He must be either very cheap or writes for free.  

2 hours ago, blazes said:

A property costing $500,000 (anywhere in the world) will cost you 272 ounces of gold as of 4 pm Pacific ST on Tuesday May 10.

 

The gold bugs tell us that when Armageddon finally arrives (assuming we're not already here), we will need loads of gold just to go out and buy a loaf of bread (or bag of rice).

 

Personally I have not met one person who owns even one ounce of gold (except maybe "accidentally" in a watch or necklace). 

The gold bugs tell us that when Armageddon finally arrives (assuming we're not already here), we will need loads of gold just to go out and buy a loaf of bread (or bag of rice) = CBDC

5 hours ago, webfact said:

It remains one of the world's fastest-growing economies and owning property in Thailand has been a fashionable way to profit from the nation's rise. 

Sorry I find both statements hard to believe.