Real Estate Expected To Rebound Due To Mega-projects

[Jai Dee]

Real estate to rebound due to mega-projects

Real estate businessmen express confidence that the real estate sector will rebound after signals from the new government that it will stimulate investments in mega-projects.

Businessman in the real estate sector Wichian Phaetthayanan (วิเชียร แพทยานัน) says the sector is expected to continuously expand by 2-5.8% due to the new government’s plan to push for mega-projects this year. However, he says the sector’s growth still depends on the country’s GDP.

Mr Wichian adds that positive factors in the sector this year include higher inflation rate which will prompt consumers to invest more in real estate as well as political stability.

Source: Thai National News Bureau Public Relations Department - 04 February 2008

[naka]

One always expects "Real estate businessmen" to say this. It's called "talking up the market".

Naka.

[midas]

Over the last few weeks all I have heard about in the media is a drying up of

capital. Wouldn't this put a dampner on on any " rebound " ?

[steveromagnino]

Over the last few weeks all I have heard about in the media is a drying up of

capital. Wouldn't this put a dampner on on any " rebound " ?

It is a recession led rebound.

Latest in property development :-)

[blizzard]

real estate people always believe market going up!

even when its going down they think its going up.........lol

[Phrakhanong]

So the true expectation is it will go down then?

[bingobongo]

LOL.....this is a sales pitch to lure in the suckers

[backflip]

Oh, the past 3 years have been terrible for the Thai real estate market. During this period, my condo doubled in value. Oh, woe is me. I can't wait for the real estate market to improve.

[p_brownstone]

Oh, the past 3 years have been terrible for the Thai real estate market. During this period, my condo doubled in value. Oh, woe is me. I can't wait for the real estate market to improve.

I suggest it's only doubled in value when you actually get someone to buy it at that price.

Patrick

[rafval]

what else can they say? they arent going to say "now is a bad time to to buy what I sell" are they?

[zorro1]

Oh, the past 3 years have been terrible for the Thai real estate market. During this period, my condo doubled in value. Oh, woe is me. I can't wait for the real estate market to improve.

I suggest it's only doubled in value when you actually get someone to buy it at that price.

Patrick

Just because you didn't sell doesn't mean that it didn't double. The price of gold went up but did you sell your Rolex? probably not but you cant dispute the current value..

[PattayaParent]

But backflip's condo is not traded on the international market is it?

So it's only worth what someojne is willing to pay for it at the time he puts it up for sale, and what if that's only half of what he thinks it's value is?

[londonthai]

there might be some hope for improvement in thailand - but if the usa crashed it will drag down all the rest, with the second & third world countries affected the most

[bendix]

Oh, the past 3 years have been terrible for the Thai real estate market. During this period, my condo doubled in value. Oh, woe is me. I can't wait for the real estate market to improve.

I suggest it's only doubled in value when you actually get someone to buy it at that price.

Patrick

Just because you didn't sell doesn't mean that it didn't double. The price of gold went up but did you sell your Rolex? probably not but you cant dispute the current value..

In that case i'd to solemnly declare that my house has double in value since last night. I feel very happy.

Now, who would like to buy it?

[backflip]

"So it's only worth what someojne is willing to pay for it at the time he puts it up for sale, and what if that's only half of what he thinks it's value is?"

Most condos have a sales office that track units in the building for sale or rent. I'm basing the sales price of my unit on the past couple sales (in 2 months). Your opinion is based on...nothing in particular.

[steveromagnino]

In that case i'd to solemnly declare that my house has double in value since last night. I feel very happy.

Now, who would like to buy it?

I will.

Payment will be in chickens and eggs, which thanks to the recent increase in fowl prices will mean a mutually beneficial deal, and we can share in the chicken s^&t.

[lazeeboy]

lets hope its true and its on the up .going on local prices for land and houses im going to make a killing

[bingobongo]

"So it's only worth what someojne is willing to pay for it at the time he puts it up for sale, and what if that's only half of what he thinks it's value is?"

Most condos have a sales office that track units in the building for sale or rent. I'm basing the sales price of my unit on the past couple sales (in 2 months). Your opinion is based on...nothing in particular.

numbers dont lie sweerheart, why would anybody buy your used property when they can buy new for less.............denial is a powerful thing for those emotionally attached to 4 walls and plaster..........dont forget inflation is everywhere, not just in "your special condo"

and with supply rising everyday, your property isnt "special" just becasue you want it to be

BMR stands for Bangkok Metropolitan Region

Edited February 9, 2008 by bingobongo

[backflip]

"numbers dont lie sweerheart, why would anybody buy your used property when they can buy new for less............."

Priced by the square meter in identical locations, newer construction is not cheaper. Asset values change, whether it's real estate, gold, or your hubcap collection...and they can rise, fall, or stay the same. Comparing gold prices from 30 years ago, and accounting for inflation, gold has lost half of its value. Could you find a date farther in the past whic would indicate that gold has maintained it as a "hedge against inflation"? Of course you could, but how much gold did you buy 40 years ago...20 years ago...10 years ago?

A friend's family bought one rai of farm land in Udon Thani 20 years ago, and paid 16,000 THB. The family has tried to buy the one rai plot next to them, and the seller kept changing the price, even as they arrived at the Land Department. Two weeks ago, the family finally bought the plot of land for 400,000 THB. I told her that the real estate experts on ThaiVisa thought she was foolish. The land was significantly over-priced, and that it would fall in value soon. She asked me about the experts. "Do any of them, their friends or families own property in Thailand?" "No." "Are any of them seriously investigating buying property?" "Except for rwading the newspaper, no" "Why do they consider themselves to be experts?" "They're middle-aged farangs."

What can I say, I'm happy that I invested in real estate in Thailand, and you're happy that you did not.

[bendix]

With respect backflip, you're comparing apples with oranges. There is only so much land in the world and it will always rise in value. It seems in today's market in Bangkok at least there is an unlimited supply of condos, though, and that's what the thrust of this thread is about.

Plain logic suggests there is an oversupply of overpriced stock in the market at the moment and we're moving into the 'bigger fool' state of the market.

I'm sure you're confident that your condo has doubled in value over the past few years, but saying the words and realising the cash gains in an actual sale are - i'm sure you'll agree - poles apart.

[polymaj]

I bought my condo at 43.21 USD if I sold at the same price (I have been offered 1.7 mil more) but just for worst case I sell for what I paid for it I make $58,000 in the conversion rate at 32.53 USD. However even if I got top baht for the condo I cannot replace. THe point is if you intend to remain here you really don't care about the short term swings.

[Gary A]

My condo has also doubled in value during the past five years. Why would I want to sell it? No way I could replace it. I don't even live in it. I did lease it to a friend of mine and the lease has almost three more years to run. I'm glad the value has gone up but it really means nothing. I didn't buy it for an investment or to resell. My renter wants to buy it. I told him that for the cheap rent he is paying, he couldn't afford to buy it.

[obsession]

I'm sure you're confident that your condo has doubled in value over the past few years, but saying the words and realising the cash gains in an actual sale are - i'm sure you'll agree - poles apart.

As a TG who owns three condos said to me, " condos easy to buy, difficult to sell". And in Pattaya"s case, difficult to rent out in a saturated rental market.

[bingobongo]

well at least it is not "too much" of a bubble LOL.........thats it, keep building, add to that supply

AREA survey points to high supply

"If we look into the details, the current amount of projects waiting to be launched is a slight increase, which is not too much to be a bubble. Of course, if there are more new launch projects in the near future, they will create fierce competition in the market. But we may have to be aware of some effects due to supply over demand," added Sopon.

http://www.property-report.com/aprarchives...amp;date=240108

Edited February 10, 2008 by bingobongo

[bingobongo]

more numbers just for you backflip, you see sweetheart, LOS isn't special just because you want it to be, global inflation is at hand and most schmucks with property made money last year, there were far better places to plant your dough than your "special" used condo (not even taking into account the oversupply in LOS)..........

ANNUAL HOUSE PRICE CHANGE 2007* (%), ADJUSTED FOR INFLATION

INFLATION-ADJUSTED NOMINAL

Singapore 24.29 27.59

China (Shanghai) 20.04 27.85

Bulgaria 15.42 3 0.59

Estonia (Tallinn) 15.08 23.38

Norway 11.93 11.56

Lithuania 11.43 13.64

Philippines 9.88 13.04

Hong Kong 9.44 11.25

Australia 8.6 10.63

Sweden 7.86 9.86

Japan (6 cities) 7.86 7.75

UK 7.49 9.68

France (Paris) 7.01 8.27

South Korea 6.53 9.01

Colombia 6.41 2.82

Poland 5.81 8.38

New Zealand 4.59 6.67

SouthAfrica 3.77 12.52

Canada 3.66 6.13

Finland 3.29 5.88

Spain 2.88 5.31

Netherlands 2.44 3.77

Denmark 2.29 3.95

Italy 2.08 5.6

Switzerland 1.91 2.56

Malaysia 1.73 3.2

Greece 1.54 4.18

Germany -0.4 2.04

Latvia -1.02 10.22

Indonesia -1.18 5.24

Japan -1.38 -1.48

Portugal -1.68 0.49

Israel -1.86 -0.51

Thailand -2.81 -0.78

Ireland -9.08 -4.68

US (NAR) -8.46 -5.07

US (FHFB) -6.79 -3.49

US (OFHEO) -0.56 1.79

* latest available

Edited February 11, 2008 by bingobongo

[backflip]

I live in Thailand, so it doesn't concern me where others have invested their money.

As long as we're speaking of investments...let's talk about gold. For some reason, many TVers think of gold as a safe haven, a hedge against inflation, and something very special.

Let's say your parents gave you $35,000 on December 12, 1980, and told you to invest it any way that you pleased. Your parents have already convinced you that the world is a scary place, full of dire consequences, and you decide to buy 63 ounces of gold. Although gold hasn't reached the $1000/ounce threshold, let's say it did. So, you turned $35,000 into $63,000 - not too bad, until you consider inflation, and that $35,000 in 1980 is worth about $100,000 today. Essentially, you spent $100,000 for $63,000 - a pretty bad investment.

Let's say another young chap received the same amount of money but, rather being taught to be afraid of the future, his parents instilled a deStijl mindset - the future will be exceptional, full of promise, and that investments should be made on the firm belief in capitalism, and the growth of American industry...and this guy decides to buy 1600 shares of Apple Computer. A dozen years later, it looks like a horrible investment, with the stock worth less than half of what was originally invested. But, he hangs in there, believing it will get better. The stock splits, and does this twice more. The $100,000 (2007 dollars) is worth over $2 million.

Here's the clincher: most of the TVer posters that have been lavishing praise on gold have completely missed the mark. It is their firm collective belief that investment begins and ends with gold, and nothing else matters. Essentially, given the choice, they would rather trade $100,000 for $63,000...rather than $2 million. Well, everyone has an investment strategy, and their's defies common sense.

As I posted earlier, I'm completely satisfied with my investments - including the purchase of a condo in Thailand. You're happy with your choice of not investing in Thail real estate, and that's that.

[quiksilva]

Yawnnnnnn - Bingo come on man, you keep making me repeat myself, houses are not condos.

So now that we have that straight, show us some appropriate stats that actually support your hypothesis "condo values are falling" .

[bendix]

I think you'll find that in bingo's list houses and apartments are interchangeable. It's a commentary on property prices, not houses only. At least I assume it is given that Singapore is right up there at the top and I would imagine the vast majority of properties being measured in Singapore are apartments and not houses.

[quiksilva]

Unfortunately its not. Do a bit of digging and one will discover that its actually based on government figures that record house prices of new projects only. All it tells the reader is that new housing projects are being aimed at lower income segments.

So again this is houses and prices, not condos and values = four entirely different things.

[bingobongo]

could not find a cartoon with lemmings, so this will have to do........