Housing Bubble To Hit Los

[dotcom]

If you see someone trashing Irene gratutiously - click the "report" feature. Hopefully the mods will remove the offending post. They know her to be a valuable asset to the forum.

[dotcom]

Is Thailand property a bubble? I don't know.

How the USA got into the credit crunch has many reasons. From the moment the internet stock bubble burst the property bubble began.

Then people began to see houses as a way to get rich quick. Gains of 30% PA will do that. People got loans with zero down & ARM's. The mortgages were then packaged up by the banks & sold off like securities. The borrower could not call up the lender to discuss his mortgage because the lender might be in Holland or Japan.

Now back to our beloved LoS. If you own a luxury condo between Nana BTS & Prom Phong BTS you will be albe to sell it for good money. Whether more or less than you paid is not too important. If you don't like the offer price rent the unit out till the market rebounds.

People like Irene have excellent knowledge of the market. When it is high you sell. When it is low you buy. That the global economy is in a slow down seems pretty obvious. However China has domestic consumption to pull it through. To some extent Thailand does too.

http://www.hkri.com/icms2/template?series=...mp;article=2005

Live within your means. Don't borrow money. Be happy with what you have. Don't worry when the TV tells you that you need a flat stomach white teeth & sweet smelling underarms.

[dotcom]

Good Article:

http://www.readbangkokpost.com/business/re..._bubble_yet.php

[bingobongo]

pain is coming.......are you ready homdebtors?

Bankers see hazy market

A decline in condominium rentals and low liquidity in the resale market are factors that point to signs of oversupply in the Bangkok condo market.

http://www.bangkokpost.com/Business/08Apr2008_biz76.php

[cclub75]

The link has changed.

http://www.bangkokpost.com/080408_Business...r2008_biz76.php

pain is coming.......are you ready homdebtors?

Bankers see hazy market

A decline in condominium rentals and low liquidity in the resale market are factors that point to signs of oversupply in the Bangkok condo market.

http://www.bangkokpost.com/Business/08Apr2008_biz76.php

[bingobongo]

The link has changed.

http://www.bangkokpost.com/080408_Business...r2008_biz76.php

pain is coming.......are you ready homdebtors?

Bankers see hazy market

A decline in condominium rentals and low liquidity in the resale market are factors that point to signs of oversupply in the Bangkok condo market.

http://www.bangkokpost.com/Business/08Apr2008_biz76.php

thanks

why are government and builder incentives needed if things are going well? i'll give you hint, becasue they are not

but who cares, keep building even if Bangkok ends up being a Potemkin village

Potemkin village noun: something that appears elaborate and impressive but in actual fact lacks substance

[lardy]

The link has changed.

http://www.bangkokpost.com/080408_Business...r2008_biz76.php

pain is coming.......are you ready homdebtors?

Bankers see hazy market

A decline in condominium rentals and low liquidity in the resale market are factors that point to signs of oversupply in the Bangkok condo market.

http://www.bangkokpost.com/Business/08Apr2008_biz76.php

thanks

why are government and builder incentives needed if things are going well? i'll give you hint, becasue they are not

but who cares, keep building even if Bangkok ends up being a Potemkin village

Potemkin village noun: something that appears elaborate and impressive but in actual fact lacks substance

Just back from BKK and for me personally I can report I have 3 people chasing me to rent one of my condos that will be available in June this year (we have four all are full). One is asking for 6 months stay the other 1 year and 3 days ago my wife was called by a Thai whos husband is an American just saying they will take it unseen for a year. They have seen our website and know the area and seen our photos. For me demand is still extremely strong. I had to pay 150000 baht more to buy this latest condo than I did when I bought new 22 months ago at this development and I struggled to get a unit at this price all others were at least another 150000 more than this one, no one would drop their price my seller needed his sister to go to America qucikly hence "quick sale".

I dont find making money on condos in BKK difficult, customer service is priority number 1 for our company, they can call us 24 hours day and we DO answer the phone.

Im not an agent I dont care what esle people are saying Im telling you whats its like for me at the blunt end right as of today, nothing repeated here or something I have read in a paper , heard in a bar or any other place.

I havent even advertised this unit .Sometimes I dont know how people have found us.

Right location , excellent customer service and immaculately clean with modern furniture................ = rented, price is not so important as I know others in this complex can be 3000 baht per month cheaper for the same size unit. Some bigger units at a lower price have been sitting empty for 6+ months in fact we were asked by another owner if we could help them rent it. Many have no idea how to market their property at all.

I for one was extremely happy the govt lowered the tax to buy it, made my day as it was not expected it saved me more than 70000 baht.

For me there is no current problem as for others?????????????

[cclub75]

They have seen our website and know the area and seen our photos.

I havent even advertised this unit .Sometimes I dont know how people have found us.

Thank you to give the URL of your website. So we can see the "magic".

Edited April 13, 2008 by cclub75

[bingobongo]

The wide disparity in prices has little to do with the quality of the prices and much to do with the delusions of the sellers. The market is about to give them a cleansing dose of reality.

[samran]

The wide disparity in prices has little to do with the quality of the prices and much to do with the delusions of the sellers. The market is about to give them a cleansing dose of reality.

bingo, this is based on the assumption that these buyers borrowed to purchase. Many don't. Finance is hard enough to get as a Thai citizen. I should know.

[LaoPo]

The wide disparity in prices has little to do with the quality of the prices and much to do with the delusions of the sellers. The market is about to give them a cleansing dose of reality.

bingo, this is based on the assumption that these buyers borrowed to purchase. Many don't. Finance is hard enough to get as a Thai citizen. I should know.

Out of curiosity, are Banks now tougher in LOS (mortgage wise) than let's say 1 year ago, Samran ?

(they are in the US and certain countries in Europe...)

LaoPo

[samran]

The wide disparity in prices has little to do with the quality of the prices and much to do with the delusions of the sellers. The market is about to give them a cleansing dose of reality.

bingo, this is based on the assumption that these buyers borrowed to purchase. Many don't. Finance is hard enough to get as a Thai citizen. I should know.

Out of curiosity, are Banks now tougher in LOS (mortgage wise) than let's say 1 year ago, Samran ?

(they are in the US and certain countries in Europe...)

LaoPo

I think they have always been tight, having being burnt in 1997 when they were left with alot of property on their books. I must qualify my statememnt that new builds get the most preferential and easist to get loans. But for established properties (ie land, older condos, they'll usually value the property at 70-80% of the sale price, and then only let you borrow 70-80% of the valuation). As such, the banks are effectively only letting you borrow say 60% of what you need. The are on a safe bet case and that has been their modus operandi for a few years now.

Compare this to Australia say, where I could walk into the bank, immediatelyy qualify for a stupidly large loan, and the bank would (in good times) give me 95% of the house price.

[Heng]

Jumbo mortgages, interest only mortgages, etc. haven't caught on here yet and I hope they never do. When you offer stupidly large loans, what can you expect other than a lot of stupid people lining up in front of your bank?

Edited April 15, 2008 by Heng

[samran]

Jumbo mortgages, interest only mortgages, etc. haven't caught on here yet and I hope they never do. When you offer stupidly large loans, what can you expect other than a lot of stupid people lining up in front of your bank?

depends on your perspective Heng. From my perspective, I earn fairly well but am pretty conservative. Neverthless, being not from a particularly wealthy family, I like most in the west, need to resort to -da dum - debt to create our future wealth (I know you hate debt youself - each to their own).

As an economist, I have no problem with this and beleive it is a useful tool to create and spread the economic wealth pie a little. Having debt focuses the mind a bit, and forces you to be economically responsible overall. But they way it is set up in Thailand, the lack of felexiblity offered by the banks is one of the reasons why the property market is relatively illiqiud and why the rich stay rich, and the poor have very little opportunity to (responsibly) get a foot on the property ownership ladder -set up businesses etc.

When it came to an investment decision for me and my wife, we looked at Thailand, the UK and Australia. At the end of the day, with the lending ratios offered by Thai banks, I'd essentially be locking a large proportion of my cash at hand on an illiqiud asset which I'd have little opportunity to sell COMPARED to say OZ. So we ended up sticking our cash into a property in OZ. The mortgage is flexible enoough for my purposes, and I know, if it all goes to seed, I can sell the property fairly easily and get my cash out.

[JimmyCA]

Boy the USA is taking it up the behind right now and decoupling looks to be wishful thinking. Might it finally be a very good time to be patient and see condo and real estate prices take a major dump before buying in Bangkok. Might it finally be a time soon for bargain hunting.

From my experience as an investor in Thailand for three decades, I have yet to see the price level of condo property tumbling down. I do see unsalable property, plenty of them in which the owners are not willing to sell or not in a position to sell. I like to see my belief corrected.

did you take a vacation in 97 - 99

[Heng]

Jumbo mortgages, interest only mortgages, etc. haven't caught on here yet and I hope they never do. When you offer stupidly large loans, what can you expect other than a lot of stupid people lining up in front of your bank?

depends on your perspective Heng. From my perspective, I earn fairly well but am pretty conservative. Neverthless, being not from a particularly wealthy family, I like most in the west, need to resort to -da dum - debt to create our future wealth (I know you hate debt youself - each to their own).

As an economist, I have no problem with this and beleive it is a useful tool to create and spread the economic wealth pie a little. Having debt focuses the mind a bit, and forces you to be economically responsible overall. But they way it is set up in Thailand, the lack of felexiblity offered by the banks is one of the reasons why the property market is relatively illiqiud and why the rich stay rich, and the poor have very little opportunity to (responsibly) get a foot on the property ownership ladder -set up businesses etc.

When it came to an investment decision for me and my wife, we looked at Thailand, the UK and Australia. At the end of the day, with the lending ratios offered by Thai banks, I'd essentially be locking a large proportion of my cash at hand on an illiqiud asset which I'd have little opportunity to sell COMPARED to say OZ. So we ended up sticking our cash into a property in OZ. The mortgage is flexible enoough for my purposes, and I know, if it all goes to seed, I can sell the property fairly easily and get my cash out.

I hear you, and I certainly wasn't calling you stupid. My issue with home/property debt (and again, yes, to each their own) is that is also encourages/enables biting off more than one can handle. And IMO as a whole, I'd say the "more than one can handle" crowd outnumbers the "responsible debt to increase wealth" crowd.

As for those from "wealthy" families, they are just as evenly divided into the cash and debt crowd. Some of those debt crowd folks can really hit it out of the park when they leverage their substantial holdings, but then again there are those who destroy multiple generations of wealth with a few stupid decisions as well. That's the main reason I have always been a fan of cash and 100% equity. It's wonderfully safe and boring. If I want risk, I'll go for a drop shot from the back of the court or serve and volley on my second serve.

[Heng]

Boy the USA is taking it up the behind right now and decoupling looks to be wishful thinking. Might it finally be a very good time to be patient and see condo and real estate prices take a major dump before buying in Bangkok. Might it finally be a time soon for bargain hunting.

From my experience as an investor in Thailand for three decades, I have yet to see the price level of condo property tumbling down. I do see unsalable property, plenty of them in which the owners are not willing to sell or not in a position to sell. I like to see my belief corrected.

did you take a vacation in 97 - 99

There wasn't a huge tumble in prices, even in '97-'99. Now there were plenty of people TALKING about it happening, but they mostly sat around to wait for it, and are still waiting for it a decade later. Too many of the owners that Irene mentioned are cashed up to the point where they don't or at least rarely feel the need to drop prices. Not to say that bargains can't be found, just like anywhere else there are plenty of properties that are leveraged beyond the owner's "treading water" stamina (finance wise) and you CAN pick these out of the water - and kick the owner away and leave him/her to drown.

[YoungFarang13]

everyone is sitting and waiting for the housing bubble to come so they themselves can buy. these threads are all essentially, "you should sell now, at a low price to me and i wouldn't buy it at this price, i would buy it at this price, its not fair that other people have more money then me. real estate costs more in asia. look at the prices in hong kong, 600K baht/m2 and please tell me that bangkok is silly over priced. you can't.

Edited April 15, 2008 by YoungFarang13

[LaoPo]

everyone is sitting and waiting for the housing bubble to come so they themselves can buy.

Wrong.

Just the people with money. The others have to sell.

LaoPo

[Heng]

And then the inevitable... but this isn't Hong Kong or Tokyo! I'm just so sure that if I keep on waiting, we'll reach market equilibrium some time between now and a hundred years from now.

[ourmanflint]

How unfortunate.... I was hoping that on my once in a while visits to the forum that some sense of reality may have settled in, but as usual the Thai bubble is continuing on apace and everyone it seems feels nicely insulated from the goings on in the outside world. How lucky for you all that you are so naive, as when the sh*tstorm happens it will barely register on your smiling faces.

I can report that things outside the universe of Thailand are going from bad to worse quicker than you can say "Jehosephat", house prices in the UK predicted to drop by a minmum of 20% this year alone and bottoming out at 50% of current values by many commentators. The USA may be in an even worse situation. But then this should have little effect on anyone in Thailand should it. Of course if the thousands of factories now closing in China who once supplied the USA are the only problem facing the Chinese economy then that shouldn't be a problem either should it? Neither should the beginning of a property crash in India!

No you're alright Jack!!

And of course the doubling of the price of rice on the world market in the past 3 months can only be good for Thailand as exports rocket, here, nevermind that it will mean prices doubling in the shops and restaurants as well, no none of it matters, Thailand will be fine as always and you'll all carry on as before, making lots and lots of mney, drinking beer and watching the sun go down over your last development.

I wish I was you right now I really do!

Edited April 15, 2008 by ourmanflint

[Heng]

^ I'd probably recommend holding off on buying/adding to your property portfolio for you.

[YoungFarang13]

look i know where you are coming from. you ask yourself "is a higher floor view really worth a 40% increase in price? who would pay so much money for such a thing?" sadly, there are just too many rich people to whom 10 million baht and 14 million baht look the same to on paper and not enough supply

Edited April 16, 2008 by YoungFarang13

[alive555]

look i know where you are coming from. you ask yourself "is a higher floor view really worth a 40% increase in price? who would pay so much money for such a thing?" sadly, there are just too many rich people to whom 10 million baht and 14 million baht look the same to on paper and not enough supply

i know of a development where one side of the building sells for 130% more than the other side . same building same product. different view.

[crocodile]

look i know where you are coming from. you ask yourself "is a higher floor view really worth a 40% increase in price? who would pay so much money for such a thing?" sadly, there are just too many rich people to whom 10 million baht and 14 million baht look the same to on paper and not enough supply

i know of a development where one side of the building sells for 130% more than the other side . same building same product. different view.

What development? Where? I for one, would like to go and look at the cheap side.

[alive555]

look i know where you are coming from. you ask yourself "is a higher floor view really worth a 40% increase in price? who would pay so much money for such a thing?" sadly, there are just too many rich people to whom 10 million baht and 14 million baht look the same to on paper and not enough supply

i know of a development where one side of the building sells for 130% more than the other side . same building same product. different view.

What development? Where? I for one, would like to go and look at the cheap side.

the river

[Scott123]

.....for my money Thailand housing has been safer and a more consistant a return for the past 3 years that I have had a small piece of it. I bought in with the idea of flipping but now rent for a very nice 9.5% return and that's not counting the currency exchange profit if I sold now (18%)

Congratulations to you on your investment. Here is my quesiton: Will you buy a condo in Bangkok at the current price now? Do you think you will get this kind of return if you buy a property at the current price?

[backflip]

"Do you think you will get this kind of return if you buy a property at the current price?"

Probably not. Much of the increase in equity during the past several years is due to the increase in the value of the THB. When I bought my condo, the USD/THB exchange rate was 1:40. The current exchange rate is closer to 1:30 - that's an increase in equity of 25%...without figuring in the "ordinary" inflation of property prices due to land and construction costs.

[pkrv]

A small voice in the dark -

Condominiums Can Be Homes Too!!!!!!!!!!!!!!!!!!!!! - Who Cares

[VegasVic]

How unfortunate.... I was hoping that on my once in a while visits to the forum that some sense of reality may have settled in, but as usual the Thai bubble is continuing on apace and everyone it seems feels nicely insulated from the goings on in the outside world. How lucky for you all that you are so naive, as when the sh*tstorm happens it will barely register on your smiling faces.

I can report that things outside the universe of Thailand are going from bad to worse quicker than you can say "Jehosephat", house prices in the UK predicted to drop by a minmum of 20% this year alone and bottoming out at 50% of current values by many commentators. The USA may be in an even worse situation. But then this should have little effect on anyone in Thailand should it. Of course if the thousands of factories now closing in China who once supplied the USA are the only problem facing the Chinese economy then that shouldn't be a problem either should it? Neither should the beginning of a property crash in India!

No you're alright Jack!!

And of course the doubling of the price of rice on the world market in the past 3 months can only be good for Thailand as exports rocket, here, nevermind that it will mean prices doubling in the shops and restaurants as well, no none of it matters, Thailand will be fine as always and you'll all carry on as before, making lots and lots of mney, drinking beer and watching the sun go down over your last development.

I wish I was you right now I really do!

ourmanflint, I enjoyed the flint movies back in the 60's and for the most part I enjoyed your insightful post which is basically spot on. The only part where I think that you might have gone astray is your view of the U.S. real estate market. The worst is about over for the U.S. and there were only selected areas of double digit declines like in California, Vegas, Phoenix, Florida and Ohio, but keep in mind that many of these same areas saw a doubling of real estate values between 2004-2006. Those who bought before 2004 (the vast majority of U.S. homeowners) in the aforementioned areas are enjoying quite sizeable gains in their home values still, despite the recent 30% haircut in some of those areas. As you noted, China and India are going through their cycle of irrational exeuberance, and the eventual "end of the party" will soon be here and the hangover could have some substantial repercussions, particularly for the S.E. asian basin. Sadly countries like Thailand whose populace can least afford the ravages of out of control commodity inflation, are being and will continue to be hit the hardest. I think that the foolish ethynol policy in the U.S. coupled with the puposeful weakening of the U.S. dollar to mitigate trade imbalances has caused havoc in the rest of the world and I hope the next U.S. president ditches this assinine ethynol policy and reigns in spending so the dollar can continue its recent strengthening, thereby putting downward pressure on oil prices. I agree with you about what I have dubbed the "lollipops and roses brigade" here on TV, it seems no matter what facts they are presented with, the real estate market is always booming in Thailand and inflation is always a non issue. Alas, those rose colored glasses that Palm and some of the others have on will have to come off eventually as the hard reality of the situation will hit them in the face like a tsunami