Crash In The Condo And House Market

[robsay]

Joerg, one of the directors of Pattaya Agency - a pattaya real estate agency, is quoted as saying that he expects the pattaya condo and housing markets to plummet. He attributes this to a lack in confidence in developers following the VT7 fiasco etc as well as the large amount of unsold housing stock. Is now the time to sell?

[Jingthing]

Or maybe he's trying to stir up some business ...

I don't see how one condo not finishing is a big deal. I think the national fundamentals of political instability, visa doubts, baht strength, slow economy, high oil prices would be better reasons. And oversupply, of course.

[observer21]

Joerg, one of the directors of Pattaya Agency - a pattaya real estate agency, is quoted as saying that he expects the pattaya condo and housing markets to plummet. He attributes this to a lack in confidence in developers following the VT7 fiasco etc as well as the large amount of unsold housing stock. Is now the time to sell?

What is the VT7 project - i assume it is a condo project not completed?  If so, i can see this happening on  number of ongoing projects. I have 1 particular project in mind. I have personally paid 40% deposit on on a unit - off/plan. Thing is though, as it stands approx only 50% of the units are sold/held - 42% ferang and only 8% thai.  Due for completion in 4 months.

However, due to the 50/50 rule it looks like  by the end of the build there could be 50% ferang and 10% thai, sold- leaving the outstanding units (approx 40%) for thai only,  as the company way of purchase is 

f - - ked,

[stevemiddie]

However, due to the 50/50 rule it looks like  by the end of the build there could be 50% ferang and 10% thai, sold- leaving the outstanding units (approx 40%) for thai only,  as the company way of purchase is 

f - - ked,

50/50 rule? I always thought the occupancy had to be 40/60 Farang/Thai. ?

Has this changed ?

[Chopper]

50/50 rule? I always thought the occupancy had to be 40/60 Farang/Thai. ?

Has this changed ?

There has bever been a 50/50 rule. It used to be 40/60 but some years ago the Government changed it to 49%/51% infavour of Thais.

[tropo]

, is quoted as saying that he expects the pattaya condo and housing markets to plummet.

I was under the impression that the Pattaya condo and housing market has been dead all year. I would agree with Jingthing who said your friend is trying to stir up business. There has already been reports of real estate businesses packing up and leaving (going home).

I never believe anything uttered by a real estate agent.

[Chopper]

I never believe anything uttered by a real estate agent.

tropo you have the temerity to suggest that they have a reputation for telling the odd porky or two...

[cdnvic]

Predictions of an imminent housing market collapse are an almost daily occurrence on Thai forums. I'll believe it when it's reported, not just predicted.

[Gary A]

I would think it is fairly obvious. Farangs have finally figured out that they cannot own a home in their name. The bogus company route has lost favor for sure. As far as condos, I would think there is/will be a huge glut of unsold units. Many developers are in financial trouble and once the 49 percent farang share is sold out, then what? Some have clever marketing schemes where they tell you the unit can be in your name, BUT, it is kind of like a coin toss. Maybe you will be lucky and maybe NOT. Just a few years ago a price of 30,000 to 40,000 baht per square meter was pretty much standard. Now some are asking 90,000 and up per square meter. Prices for material have gone up but not doubled and tripled. Second hand older condos have doubled in price during the past three years mainly because they were reasonably priced to start with.

[Ungabunga]

With respect to the guy at Pattaya Agency, it would seem that he doesn't know much about the property market and that you should not be preturbed about his comments. This is utter <deleted> (in my opinion that is). I think that if anything, his business is slow and he's not selling anything and he's looking for excuses.

[suiging]

There is little or no movement in the property market for Farang at present for obvious political reasons. however ask any of your prominent Thai friends and you will find they are buying like crazy (specially around Na Jomtien ),

I had dinner with a very well placed Thai private banker in Hong Kong ( No I am no cliaming I move in those circles. His wife, is in My wife's golf society ).

Bloke was quite upfront and in his opinion the market for us is screwed for at least one year, more probably two. He was a typical Thai nationalist, stating that if anti-farang legislation was good for his country he would support it. However he and the other swingers in the Thai upper classes, are adamant that in the end finance will prevail and a way for he and his pals to fleece us of our"Grey Money" in particular, will be found.

He was a BK boy of course, but finished the chat with the insight that he too had bought land in Pattaya as in the medium to long term ( certainly not the short term most Estate agents try to push ) the area will boom.

Flame away. Only reporting what was said by an extremely wealthy and connected, nice guy.

[HowardJohnson]

, is quoted as saying that he expects the pattaya condo and housing markets to plummet.

There has already been reports of real estate businesses packing up and leaving (going home).

New brokers are opening up all the time in Pattaya. Plus property is a big Bangkok firm. Exoctiq is a big franchise firm. Other brokers are opening new branches. So I would say that there is confidence out there that the market will improve.

All the major international companies are predicting a boom at some point. The only thing they disagree on is the timing. Some think it will start to happen in the new year, others feel it will be at least 2 years. Either way, it can only get better.

[Jingthing]

My gut feeling is that although it is obvious now that the market is soft and declining, there isn't anyone smart enough to pick the actual bottom of any market, so if you need a condo for the long term, say 5, better 10 years, it is a very good time to buy. Pretty much the only reason I personally can afford to live like a pampered beach bum in Thailand at a reasonable age is that I have bought into gloom and doom markets before.

Edited June 29, 2007 by Jingthing

[raro]

Joerg, one of the directors of Pattaya Agency

good that you got your info from a reliable source...I recommend getting a second opinion somewhere else...

[johnh101]

I've never heard of "Pattaya Agency".

[ZZZ]

If the condo glut persists they may do what they did in Bangkok when they had a big over supply, they allowed 100% foreign ownership of condos for 1-2 years.

[Abrak]

If the condo glut persists they may do what they did in Bangkok when they had a big over supply, they allowed 100% foreign ownership of condos for 1-2 years.

And when did they do that? I dont remember...

Allowing 100% foreign ownership under Thai law would be quite complicated. I think the best that foreigners can hope for in the short term is for an extension of leases from 30 years to say 99 years. This would be easy to implement and it seems that the Democrats are keen to free up foreign ownership.

[raro]

I've never heard of "Pattaya Agency".

It's run by that friendly looking guy with the bald head and huge mustache all over the face...their ads are all over the Pattaya gazettes.

[ZZZ]

If the condo glut persists they may do what they did in Bangkok when they had a big over supply, they allowed 100% foreign ownership of condos for 1-2 years.

And when did they do that? I dont remember...

Allowing 100% foreign ownership under Thai law would be quite complicated. I think the best that foreigners can hope for in the short term is for an extension of leases from 30 years to say 99 years. This would be easy to implement and it seems that the Democrats are keen to free up foreign ownership.

I think it was about 7-8 years ago, when there was a big condo glut in Bangkok. They then allowed foreigners to buy 100% of the units in condominiums. Think this rule was in force for about 2 years, until the oversupply was sold off.

[Luckydog]

If one already has a fully paid for House anywhere, what does it matter what 'the Market' does?

If prices go down. Yours follows suit. If they go up. Ditto.

If you want to move to another house, and you get a low price for your present one. The House you buy will presumably be cheaper........

The only time you lose money is if you want to sell-up and go to another country. RIGHT?

So stop worrying about the Bluddy 'Market'.

[jumnien]

I've heard it for years. People promise that very cheap and affordable prices for all are just around the corner. Well, we never seem to get around that corner. Don't hold your breath for universal cheap condo ownership for all in Bangkok. The market goes up and down, mostly up!

[Mobi]

In days gone by, many condos were sold to farangs through the company route, when the 49% farang share was filled.

This is no longer an option except for the most gullible farangs and most unscrupulous lawyers.

There were also many instances of farangs being told that their condo was part of the 49%, only to discover subsequently that it was no such thing.

Be very careful all you condo buyers out there - if there are any left.

Land prices around Pong continue to rise, and I am sure that in the medium to long term, the prices of houses will stabilise, and then increase along with demand. This is a short term problem - maybe 2 - 3 years.

I'm not in the least bit worried about the Mobi mansion decreasing in value as I have no intention of selling in the foreseeable future.

[Jingthing]

I've heard it for years. People promise that very cheap and affordable prices for all are just around the corner. Well, we never seem to get around that corner. Don't hold your breath for universal cheap condo ownership for all in Bangkok. The market goes up and down, mostly up!

I'd have to agree largely for the reason that Thailand urban condos are still cheap compared to condos in other big cities in other Asian countries.

[DonTron]

I just came back from the sales office at AD Condo Naklua.... 90% sold out - only 10 units left.

Same with Privacy condo just next to where I live - Building A totally sold out already.

And the very expencive condos at Northpoint (sorry but 14.7 mill bath for a small 1 bedroom is expencive in my eyes) - but still - almost all of them are sold out.

And why not go to Jomtien - look at La Royal... all the 20 mill front condos are sold.

Then comes the huuuge Ocean Tower One... All the good studios are already sold (I was too late and doubted that it would be build, ###### he he)

And thinking of houses. I lived on this Naklua soi for only 4 months now. When I came there were lots of deserted properties where squatters had moved in and turned it into garbage disposals. In these 4 months 5 of them have started or is finished building very nice villas, some are very luxurious.

So where is the crash? ViewTalay? Well look at the quality of ViewTalay Project 1. And look who is behind the project. Then you have your answer right there.

Just my 2 bath....

[Humphrey Bear]

Early this year we bought a house.

When in the Land Office my wife saw a couple of friends behind the counters and we were all chatting away.

Then I was asked for 30K baht. Asked what it was for. The tax on the difference between the previous purchase price and our purchase price (i.e. a Capital Gains Tax). I complained, saying this was a seller's tax, not a buyer's, but anyway that was eventually settled with the vendor.

I then asked what would happen if the market fell and there was no capital gain?

Answer - not allowed to register - there must be an increase over the previous selling price or the change in ownership will not be registered.

Note that this is the LAND, not the house or other structures on the land.

[observer21]

50/50 rule? I always thought the occupancy had to be 40/60 Farang/Thai. ?

Has this changed ?

There has bever been a 50/50 rule. It used to be 40/60 but some years ago the Government changed it to 49%/51% infavour of Thais.

Thats right 49/51 -  just to satisfy the pedantics

[nidge]

I bought a new house 6 months ago, (in issan), since then nearly all the remaining units in the complex have been sold. Perhaps the market is slowing in Bangkok and Pattaya because people are realising how much cheaper it is to buy elsewhere.

[tropo]

Predictions of an imminent housing market collapse are an almost daily occurrence on Thai forums. I'll believe it when it's reported, not just predicted.

Reported by whom? Real Estate Agents?

Edited June 30, 2007 by tropo

[stevemiddie]

I bought a new house 6 months ago, (in issan), since then nearly all the remaining units in the complex have been sold. Perhaps the market is slowing in Bangkok and Pattaya because people are realising how much cheaper it is to buy elsewhere.

Very true. We have 3,500,000 to spend on a house. That might be a nice liitle wooden shed here in Pattaya ( a BIT of a joke )

My wife is from Korat. We had a look at some new builds there 2 weeks ago. ( thinking of our future retirement )

Amazing what the same amount of money will buy there. New 4 bed detached , large garden etc etc etc etc

[expatgaz]

The house / condo market is not moving at all yet there are no real bargains out there.Nobody is reducing prices,infact a lot of properties on the market which can't sell the owners have increased the price.It's totally crazy.If anyone can point out any bargains then feel free.As long as crazy owners ask crazy prices the property market is doomed.If you have a nice place then the impact is not relevant as you'll not want to sell,but my advice to people trying to sell GET REAL with your asking price.10 years ago it was hard to find a property over 6 mil,now it's hard to find one under that price.

EPG.