BOT Says Rates to Continue Rising Until Economy Reaches Full Potential

[nigelforbes]

20 minutes ago, ThailandRyan said:

House near us was at 18.2 MThb in July. December 1st the owner raised the price to 19.9 MThb. Before the price was raised they had no one look at for the 5 months it was on the market at the lower price. Since then there have been many viewings.  Yesterday they accepted an offer for 19.5 MThb. Prices are going up.  Of course it's now high season and folks with money from overseas are getting ready for retirement. The Southern Hua Hin area near Pranburi is growing.

No viewings at 18.2, one offer at 19.5, he should have told the buyer to sod off and increased it to 22. :))

 

The rate at which people plan to retire doesn't change from one month or year to the next! 

 

I'm sure there are some post covid price adjustments currently but generally speaking property prices outside of the major urban areas are consistently slow and consistent over time. There continues to be an over supply almost everywhere, that's the issue, the supply and demand equation is out of balance.

problem and it's getting worse as the population ages and the birth rate shrinks.  

[Isaan sailor]

So can we all at least agree a rising Baht sucks for expats?

[nigelforbes]

43 minutes ago, ThailandRyan said:

House near us was at 18.2 MThb in July. December 1st the owner raised the price to 19.9 MThb. Before the price was raised they had no one look at for the 5 months it was on the market at the lower price. Since then there have been many viewings.  Yesterday they accepted an offer for 19.5 MThb. Prices are going up.  Of course it's now high season and folks with money from overseas are getting ready for retirement. The Southern Hua Hin area near Pranburi is growing.

BTW mortgage rates have increased and will continue to do so; Consumer Loans are at an all time high; inflation is running over 6% and BOT is steadily increasing lending rates, plus, there's a recession due in the US and Europe that will hurt Thai exports and the Thai economy. I hate to appear unduly negative but I do wonder where this property boom is going to come from!

[sandyf]

15 hours ago, tomazbodner said:

That's oxymoron. Increasing rates cools economy.... ???

Follow the leader.

 

The Bank hiked interest rates on Thursday for the ninth time in a year, to the highest level in 14 years, but told borrowers to prepare for fresh increases in the new year.

https://www.theguardian.com/business/2022/dec/15/bank-of-england-raises-interest-rates-to-35#:~:text=Bank of England raises interest,ninth increase in a year&text=Interest rates,-The Guardian

[sandyf]

35 minutes ago, nigelforbes said:

Again, a double edged sword. A stronger Baht does indeed make imports cheaper but it also makes exports uncompetitive. You can't look at just the upside.

And you cannot look in isolation, rates are changing globally.

The baht was stronger 2 years ago than today, hopefully never back to mid 2019.

[ThailandRyan]

1 hour ago, nigelforbes said:

No viewings at 18.2, one offer at 19.5, he should have told the buyer to sod off and increased it to 22. :))

 

The rate at which people plan to retire doesn't change from one month or year to the next! 

 

I'm sure there are some post covid price adjustments currently but generally speaking property prices outside of the major urban areas are consistently slow and consistent over time. There continues to be an over supply almost everywhere, that's the issue, the supply and demand equation is out of balance.

problem and it's getting worse as the population ages and the birth rate shrinks.  

Over supply of condos and smaller houses maybe, but the mini McMansions are few and far between. The owner was not Thai and the buyers are from Switzerland. The reasons it sat was it needed to be painted, the wood trim needed to be re-sealed, and a few other items updated. That's one reason he upped the price and also why it sold fairly quickly afterward. Curb appeal means more than a little to folks, plus it has a large pool and half wrap around porch on  the lower floor and the upper floor. Gated Moo Ban with great common Area upkeep and not far from the ocean.  Retirement Area with great restaurants and resources not far away.   Sure it's a 3 hour drive from Bangkok but then the weather and here are great year around.

[nigelforbes]

45 minutes ago, ThailandRyan said:

Over supply of condos and smaller houses maybe, but the mini McMansions are few and far between. The owner was not Thai and the buyers are from Switzerland. The reasons it sat was it needed to be painted, the wood trim needed to be re-sealed, and a few other items updated. That's one reason he upped the price and also why it sold fairly quickly afterward. Curb appeal means more than a little to folks, plus it has a large pool and half wrap around porch on  the lower floor and the upper floor. Gated Moo Ban with great common Area upkeep and not far from the ocean.  Retirement Area with great restaurants and resources not far away.   Sure it's a 3 hour drive from Bangkok but then the weather and here are great year around.

OK, Pranburi is a highly desirable area and is very up and coming with the Bangkok crowd, we were there three months ago and it's delightful. But areas like that are very far and few between, just in the same way that the farang mansions dotted around the place are also not typical of the housing stock. Such places will always turn over to new retirees or wealthy Bangkokians but they are anomalies in the greater housing picture. If you are basing your idea of rising house prices generally on those things, you are misguided.

[ThailandRyan]

5 minutes ago, nigelforbes said:

OK, Pranburi is a highly desirable area and is very up and coming with the Bangkok crowd, we were there three months ago and it's delightful. But areas like that are very far and few between, just in the same way that the farang mansions dotted around the place are also not typical of the housing stock. Such places will always turn over to new retirees or wealthy Bangkokians but they are anomalies in the greater housing picture. If you are basing your idea of rising house prices generally on those things, you are misguided.

Better look around as prices will be increasing for many types of residences. Not just my view and far from being misguided. Just rented out my Bangkok Condo for 6 months at 75k a month.  

[nigelforbes]

5 minutes ago, ThailandRyan said:

Better look around as prices will be increasing for many types of residences. Not just my view and far from being misguided. Just rented out my Bangkok Condo for 6 months at 75k a month.  

75k a month is so far removed from average or median rental prices as to be unfunny! Just like Pranburi is so far removed from average Thai property market values and supply and demand. Both are in the top 1% or so, why even talk about those things in the context of increased housing values in Thailand, unless you simply want to announce your wealth, yet again! You know what TR, I think you have to go back onto my ignore list, you're just not ready yet.

[spidermike007]

3 hours ago, nigelforbes said:

This is a story about the competitiveness of Central Bank interest rates, which attract or repel foreign capital investment, along with a desire to reduce inflation, BOT has almost no choice in this matter. 

I agree. I was simply saying his prediction on the economy next year was foolhardy at best, and highly ignorant at worst. 

[ThailandRyan]

5 minutes ago, nigelforbes said:

75k a month is so far removed from average or median rental prices as to be unfunny! Just like Pranburi is so far removed from average Thai property market values and supply and demand. Both are in the top 1% or so, why even talk about those things in the context of increased housing values in Thailand, unless you simply want to announce your wealth, yet again! You know what TR, I think you have to go back onto my ignore list, you're just not ready yet.

You still do not understand. The median prices are increasing not decreasing. Pre covid pricing is returning. Your stuck in believing everything is over priced, far from it. Put me on ignore, it really will hurt my ego....lol, funny.

[Harsh Jones]

13 hours ago, nigelforbes said:

The US equities market is the biggest, it accounts for about 50% of the planets investments in equities and investment markets. USD is the major reserve currency, over 60% of global exports are denominated in USD, oil is priced in USD. Whatever happens to US equities, whatever happens to the value of USD, the contagion effect ensures that the impact is transmitted around the world, to every economy, within days if not hours.

 

If the US hikes interest rates, countries with lower rates see capital outflows as investors go to the US mainland and invest in USD based assets. No this is not coincidence, this is the reality of the US being the dominant market in the world and USD being the dominant currency.

 

Finally, Central Banks don't act entirely on their own initiative, they are custodians of the country's currency and they act within the fiscal policy framework set by government, all of which vary from country to country. The US Fed has increased interest rates to 4.5%, BOT rate is 1.25%, Thailand has seen capital outflows as a result and must play catch up for the sake of its own economy and to keep inflation down. Those things are basic economics, not coordinated efforts.

Yeah I don't see how this contradicts my point. There is literally nothing free market about the price and control of credit in the world. It is essentially an administrative command system not unlike the prices of things in the Soviet Union.  Except just with one thing. The most important thing. The price and emission of credit. The Fed is a 12 person politburo