Crash In The Condo And House Market

[Digger]

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.

I think the reality is that most of these houses and condo's are not paid for with borrowed money, hence no real financial reason to sell. I considered selling a property I own near Pattaya which I have rented out and decided at the moment, whats the point - the buyers are not there and those that are are expecting firesale pricing. So I have just decided to keep it and keep it rented out. As I did not borrow the money, I am under no pressure to sell it.

Also from what I can see, not much property is built 'to speculate' (ie sell once its finished) and so builders tend to only build something when the buyer stumps up the cash. With the general feeling of a confused market - I dont see anything changing for another year at least, except a lot of realtors are going to be going out of business.

[Ploughboy]

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.

I read a comment somewhere to the effect that in Thailand the value of property goes down, but the price doesn't. Think that sums it up.

[Mobi]

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.

Thai attitudes on selling their land/property are well documented - as you know well. EPG. If they are not desperate for the money, they are perfectly content to sit on their asset for as long as it takes to get their asking price. They just aren't interested in cutting the price for a quick sale. And as a previous poster has said, I think there are a lot of farangs here who are adopting a similar attitude - if they're not desperate, they are prepared to wait.

The late 90's crash resulted in a lot of middle class Thais who were seriously over extended at the banks/finance companies, and were forced to sell at greatly reduced prices. This hasn't happened in the current 'slump' as yet, and I'm not sure that it ever will to any great extent.

The Thai property market is quite unlike any other property market anywhere in the world, and it is almost impossible to predict what will happen. As you can see from this thread, some condos are still selling like hot cakes (according to those selling them ), and others are going nowhere. Ditto the housing market.

One thing's for sure. Don't believe anything any condo sales team or reality reps tell you. They will always talk the market up.

[expatgaz]

Very correct Mobi with your first sentence.I should have snapped up all of that area 10 years ago for a fiver !! Being married to a Thai I should reralise just how stubborn they are. I was round your neck of the woods last week, a lot of activity in the area.

EPG.

[bazmlb]

Isnt the 49%/51% based on floor space and not rooms numbers? so some built big rooms on the low levels/areas with no views and sold them cheaply to thais to fill the 51%?

I did hear it was mentioned opening up to 70% foreign ownership before the coupe

[expatgaz]

49% & 51% is based on rooms.If the building has 100 rooms 49 Foriegn 51 Thai.Some people do have big rooms like I do,however my "Big " condo is 4 rooms renovated not classed as 1.

EPG.

[stevemiddie]

I've never heard of "Pattaya Agency".

Its an agency in Pattaya i believe.

[booman]

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.

Actually he's correct. It's not opinion it is really happening. The market over extended itself, to many companies "back home" have sprung up declaring the Eden had been found. Quick cash in, a building boom, then reality sets in... He I love it here and want it to be doing good at all times, but it ain't a football team you can't just cheer it on to victory.

[think_too_mut]

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.

Is that right?

What they did after 97' crash is what we have today: then introduced laws of 49:51 ownership in residental areas (like BKK, Pattaya, HHin...) are still in effect.

Before, condos could not be owned by foreigners, same as it is with land today.

[BlackJack]

all real estate is cyclical

it is not short term

[Humphrey Bear]

One thing's for sure. Don't believe anything any condo sales team or reality reps tell you. They will always talk the market up.

I think you meant REALTY reps. The last thing these people talk is REALITY.

[Mobi]

One thing's for sure. Don't believe anything any condo sales team or reality reps tell you. They will always talk the market up.

I think you meant REALTY reps. The last thing these people talk is REALITY.

Glad someone spotted the deliberate mistake, or maybe it was a reverse Freudian slip?

Lets just use good old English Estate Agents to avoid any further confusion

[Jet Gorgon]

Raro Baro, that bald guy with the big moustache you mentioned at this estate agent wouldn't happen to live on Samui and drive a big bike, would he?

edit: for Mobi's word choice.

Edited July 1, 2007 by Jet Gorgon

[Chopper]

Morning Jet, good to see you in the Pattaya forum. Now you can catch up on Weho's latest...

[bkk_mike]

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.

Personally - I agree - when it comes to property to live in or holiday in, you buy what you can afford and all the market does is affect what that is. So long as you're planning on holding onto it for a reasonable amount of time, you should be OK.

Buying to rent - is more speculative, and you've got the possibility that rents could drop. (more of an issue if you've got mortgage to pay with the rent, but that's rather unlikely in Thailand - for non-Thais anyway).

You can never pick a market - I bought in London in 99, thinking I was buying at the top of the market (but had to buy as we needed a bigger place as my wife was pregnant), and it's done nothing but go up further (so far).

Thailand has some major oddities (like the 49/51 rule, and the fact that Thais don't like to buy "used" property - but if anything that's useful. - Pattaya is really the only place in Thailand with a truly functioning 2nd hand property market).

[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.

Is that right?

What they did after 97' crash is what we have today: then introduced laws of 49:51 ownership in residental areas (like BKK, Pattaya, HHin...) are still in effect.

Before, condos could not be owned by foreigners, same as it is with land today.

Yes it's right.

After the 1997 a bill was enacted :

To allow foreigners to own more than 49% of the space of condominiums in Bangkok, municipal areas, or local administration as specified by regulations if the total space of the condominium is below 5 rais (1.25 acres).

To allow foreigners to own not more than 49% of condominium outside the above areas.

This bill was Enacted 27th April 1999

Given another oversupply this could easily happen again.

Edited July 8, 2007 by ZZZ

[think_too_mut]

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.

Is that right?

What they did after 97' crash is what we have today: then introduced laws of 49:51 ownership in residental areas (like BKK, Pattaya, HHin...) are still in effect.

Before, condos could not be owned by foreigners, same as it is with land today.

Yes it's right.

After the 1997 a bill was enacted :

To allow foreigners to own more than 49% of the space of condominiums in Bangkok, municipal areas, or local administration as specified by regulations if the total space of the condominium is below 5 rais (1.25 acres).

To allow foreigners to own not more than 49% of condominium outside the above areas.

This bill was Enacted 27th April 1999

Given another oversupply this could easily happen again.

When did the bill expire? When the current one was enacted? Or re-enacted?

Edit: View Talay would not have to resort to company tricks if that bill was in place. If I remember correctly, it was covering Pattaya too. IMO, that's one same bill, still in effect.

Maybe I should do some research and not rely on my memory.

Edited July 8, 2007 by think_too_mut

[ZZZ]

As far as I know it was only in effect for 5 years.

[think_too_mut]

As far as I know it was only in effect for 5 years.

For that to be true, during that period, too many buildings sold "company" to condo owners.

There should be some people on the board who went through that.

[thaimate]

the trouble here in pattaya is that thais have an inflated view of what their properties are worth,an example houses near us just on market from the builder 3.8 mill, 2 months later back on market at 6.5 mill crazy !. the house opposite us has just gone on the market ,the rent 18000 bhat more than we were paying or for sale 4mill more than ours ,identical house ,but not as nicely furnished or decorated .my wife tried to explain to the owner that it was vastly overpriced but she seemed to think there would be a stampede to view.2 months later nada. i blame the agents young thai girls came to view the house and just took it on at what the vendor wanted ,i was an agent in england and to be honest most of the agents here couldnt run a bath let alone an office

when we got our house 2 years ago we looked at many and made offers that were turned down ,i would say 80% are still empty.

the house market for farangs is dead,and i believe will stay that way for years . as for condos the nice sea view ones seem to be selling ,but there are a hel_l of a lot still unsold of the other vareiety.

[stevemiddie]

the trouble here in pattaya is that thais have an inflated view of what their properties are worth,an example houses near us just on market from the builder 3.8 mill, 2 months later back on market at 6.5 mill crazy !. the house opposite us has just gone on the market ,the rent 18000 bhat more than we were paying or for sale 4mill more than ours ,identical house ,but not as nicely furnished or decorated .my wife tried to explain to the owner that it was vastly overpriced but she seemed to think there would be a stampede to view.2 months later nada. i blame the agents young thai girls came to view the house and just took it on at what the vendor wanted ,i was an agent in england and to be honest most of the agents here couldnt run a bath let alone an office

when we got our house 2 years ago we looked at many and made offers that were turned down ,i would say 80% are still empty.

the house market for farangs is dead,and i believe will stay that way for years . as for condos the nice sea view ones seem to be selling ,but there are a hel_l of a lot still unsold of the other vareiety.

This is all true. Thais seem to think that all foreigners will pay whatever to live here. Rumour begets rumour. One Thai says ...............so all must be true.

Its their country though so i guess what they want to do is their business.

[lotus eater]

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)

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....

Curiously, I never see a comment or opnion of The Sails which is an expensive sea front building going up in the na-Jomtien vicinity. Even though I gather it is 80% pre sold. Don't understand why it remains so much 'under the radar' when properties just as expensive, such as Northpoint are discussed often enough.

as for condos the nice sea view ones seem to be selling ,but there are a hel_l of a lot still unsold of the other vareiety.

What's your expert view of The Sails - sea view, adjoining the tower for a new Le Meridien hotel - as a rental and capital gain investment on a 5 year horizon?

----

Earlier this week there was a prominent article in the Int Herald Tribune about the bull market in Thai stocks and Bangkok (I think also Pattaya) condos this year - despite the baht's strength and political developments of the last 6-9 months.

[RAZZELL]

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.

Thai attitudes on selling their land/property are well documented - as you know well. EPG. If they are not desperate for the money, they are perfectly content to sit on their asset for as long as it takes to get their asking price. They just aren't interested in cutting the price for a quick sale. And as a previous poster has said, I think there are a lot of farangs here who are adopting a similar attitude - if they're not desperate, they are prepared to wait.

The late 90's crash resulted in a lot of middle class Thais who were seriously over extended at the banks/finance companies, and were forced to sell at greatly reduced prices. This hasn't happened in the current 'slump' as yet, and I'm not sure that it ever will to any great extent.

The Thai property market is quite unlike any other property market anywhere in the world, and it is almost impossible to predict what will happen. As you can see from this thread, some condos are still selling like hot cakes (according to those selling them ), and others are going nowhere. Ditto the housing market.

One thing's for sure. Don't believe anything any condo sales team or reality reps tell you. They will always talk the market up.

How true...

There's a property in Chiang Mai that's been for sale at 25m for 3 years!

(I don't know if it's Thai or Farang owned)

RAZZ

[djinn]

Curiously, I never see a comment or opnion of The Sails which is an expensive sea front building going up in the na-Jomtien vicinity. Even though I gather it is 80% pre sold. Don't understand why it remains so much 'under the radar' when properties just as expensive, such as Northpoint are discussed often enough.

Sails added one floor to their central structure in about 3 months

Now they must have about 6 or 7 floors

In comparison the San Marino structure just near is nearly completed and they began the building looong time after the Sails

Perhaps the wind turned for the Sails???????