Housing Bubble To Hit Los

[roamer]

I see the real estate agents/developers are all in agreement. Everythings just fine.

I am neither an estate agent nor a developer. I am an investor in stocks and property and love to preserve my money as much as the others. I can hear some of the points of view especially a warning in not relying on past history and grateful for the constructive comments and warnings. Tatooing on a bubble stays in my mind.

Something one should also bear in mind is how much the financial markets have changed over the last 10 years or so. Take Northern Rock, in my banking exams had I ever advocated a good financial model would have been to lend capital for periods of 30 years or more whilst borrowing money in the market on periods of three months or less....somehow doubt I would have got many marks for that one.

And even if we don't rely on past history it helps to remember some of it. A lot of the Wall St crash in the 30's was due to rumors flying about....whats the difference in HBOS (Halifax Bank of Scotland) losing 17% at one point today simply on the basis of insolvency rumors it had to rebut or what happened all those years ago ?

We are entering uncharted waters, I certainly wouldn't be too concerned about prime property I had bought years ago but I would certainly be concerned about where my capital was.

Irene I think your maxim about never touching anything outside the CBD with a bargepole is so very sound and your also in it for the long haul, major difference. Think a few others might get burnt fingers though....

[quiksilva]

For benchmarking you may consider that President Park on Suk 24 was fetching 55,000 Baht per sqm during the same time.

What prices are President Park apts going at now on the 2nd hand market? I swear I've seen ads per sqm in the 50's. Am I mistaken?

Nope your not mistaken, values have slipped at PP. Mostly due to a hamstrung managment team who struggled for years to make good a host of construction short cuts on a shoe string budget.

[Irene]

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.

QUOTE (PadThaiGuy @ 2008-03-19 07:30:46) I see the real estate agents/developers are all in agreement. Everythings just fine.

I am neither an estate agent nor a developer. I am an investor in stocks and property and love to preserve my money as much as the others. I can hear some of the points of view especially a warning in not relying on past history and grateful for the constructive comments and warnings. Tatooing on a bubble stays in my mind.

Something one should also bear in mind is how much the financial markets have changed over the last 10 years or so. Take Northern Rock, in my banking exams had I ever advocated a good financial model would have been to lend capital for periods of 30 years or more whilst borrowing money in the market on periods of three months or less....somehow doubt I would have got many marks for that one.

And even if we don't rely on past history it helps to remember some of it. A lot of the Wall St crash in the 30's was due to rumors flying about....whats the difference in HBOS (Halifax Bank of Scotland) losing 17% at one point today simply on the basis of insolvency rumors it had to rebut or what happened all those years ago ?

We are entering uncharted waters, I certainly wouldn't be too concerned about prime property I had bought years ago but I would certainly be concerned about where my capital was.

Irene I think your maxim about never touching anything outside the CBD with a bargepole is so very sound and your also in it for the long haul, major difference. Think a few others might get burnt fingers though....

roamer,

It is this sort of comments I am seeking from this forum, a meaningful viewpoint, that has caused me to pull myself into the right track. It is interesting to read today on International Herald Tribune that after a period of eight months, no one can explain the causes of the current slowdown of the US economy convincingly.

[VegasVic]

I wonder if all those people who were going to retire to Boca with their $2,000,000 nestegg will instead decide to move to Thailand with their somewhat smaller savings. Property may look cheap to them, where it looks expensive to you. Just thinking out loud...

Good point lanna! Many of those folks who were planning on retireing to Boca Raton or the Caymans a year ago may be thinking more along the lines of Cuba, I hear that Fidels brother Raul is a real hoot!

[VegasVic]

^^ Well said, LPN suffered badly.

30,000 psm sounds about right for the Asoke area in the post crisis times, it was difficult to achieve sales during that time so it is of little surprise to hear that they let it go for this level. For benchmarking you may consider that President Park on Suk 24 was fetching 55,000 Baht per sqm during the same time.

As for the remarks that seem to be directed at my previous post, I must state that I am most certainly not anti-American. I like America, although I will not dispute being anti-Bush, but that has nothing to do with this thread.

Will Thailand feel the slow down of the US? You bet they will! It will hurt exports, but not by as much you might like to believe. Thailand, nor indeed the world's financial well being is solely dependent upon a healthy US of A anymore.

The world is a big place now and yes we are all interlinked but Asia's growing consumption will almost certainly help cushion the blow of a slow down in the US.

If a strong Baht vs the USD will mean that some Americans will postpone their decisions to buy a condo, so be it, but it will not have a significant impact on the Thai property market and will certainly not influence values.

The reason is because as a nation, Americans make up only a small % of demand in Thailand. The Thai developers know this, and understand where the demand stems from and thus they are focussed on markets like the UK, Germany, Sweden, Russia, Hong Kong, Singapore, Taiwan, and Australia.

Please do not take this as an anti-American rant, there is no malice in this post, all I have stated are simple facts.

Quicksilva, Not only is your post not anti-American, but it is spot on! Americans make up a relatively small percentage of retirees and vacationers in Thailand and their number has been falling and will likely fall further. This is no slight at Thailand but just a fact of economics, American vacationers traveling to Europe have also decreased substantially as the dollar has weakened. Americans looking to become expat retitrees are looking more at Mexico, Panama, Costa Rica, Belize and just recently the Phillipines (english speaking just like Belize and fairly inexpensive to retire to). As you correctly stated Thailand will likely feel the economic slowdown in the U.S. in its export sector and this coupled with the strong baht could indeed be very harmful for the Thai export sector. The real problem for Thailand will be threefold (1) if the Chinese markets crash after the Olympics it will slow down economies in the region that might have made up for some of those $ lost in U.S. exports, (2) If the baht remains strong Thailand runs the risk of losing more of its export business to places like Vietnam (3) Thailand also risks losing U.S. business investment ( Ford, GM, Seagate ect.), should U.S. businesses relocate outside of Thailand it will cost the Thai economy far more than any loss from American expats or tourists. As for the Thai real estate market, as far as I can tell it works on much different dynamic than the U.S. or other western markets, so unless the Thais' become business savvy overnight I would imagine that supply and demand will remain as just two more words in the english language that Thais have no concept of. Real estate prices will likely not drop precipitously in Thailand, you will just have a lot of unoccupied condos and houses for many years to come!

[quiksilva]

Thanks Vegas,

There's an interesting story on this topic in today's Nation.

http://www.nationmultimedia.com/2008/03/20...es_30068673.php

Fitch Ratings has placed Singapore, Hong Kong and Vietnam at the top list of the Asian markets most vulnerable to the US turmoil. These markets depend on a large share of exports destined to the US, which accelerates inflation, large net foreign-equity inflows and large exports to China of parts and components that are eventually destined for the US or the EU.

Thailand is almost at the bottom of the vulnerability rankings, in ninth place.

"Thailand is reasonably well positioned," said McCormack.

Vietnam's exports to the US are above 10 per cent of gross domestic product (GDP), while Thailand's exports to the US are about 10 per cent of GDP.

"The number is not small for Thailand," said McCormack.

Its interesting to hear that you say it risks losing American investment, and refer there to some of the largest US based industrialists in Thailand. I personally think that Thailand will win some firms and lose some, but mostly win and here's why:

eg Seagate still has some operations here, although they did lose alot of it but to another country in Asia, they didn't go home. Thailand's important as an automotive center (almost used hub but couldnt bring myself to) should not be over looked. Every major automotive manufacturer is here or is looking to be here, this I know for a fact. As for the Americans, I recall that just last year Ford announced a further 500 million USD investment in Thailand.

I expect that as companies seek to escape stagflation / decreased activity in their home countries many firms will continue to look offshore to stay competitive. For some firms its their only option. So this slow down might mean that we see even more FDI, especially in Custom Free Zones, where factories can operate as if they were based offshore. I know we are certainly seeing a lot more demand for the zones today (and for the cynics, yes these are actual transactions, not just applications).

Thailand understands the strategic importance of FDI in the manufacturing sector and one thing every government has done (including the Junta) is ensured that BOI can carry on doing a great job of attracting investment into this sector and maintaining stable investment policies. (NB I exclude the FBA from this as that has everything to do with the service industries and nothing to do with manufacturing).

This might mean a few more expats, but not that much, most US firms like to experiment with Thai nationals in management, but often change their minds.

As for the empty condos I can't help but agree.

Edited March 20, 2008 by quiksilva

[PattayaParent]

If a strong Baht vs the USD will mean that some Americans will postpone their decisions to buy a condo, so be it, but it will not have a significant impact on the Thai property market and will certainly not influence values.

The reason is because as a nation, Americans make up only a small % of demand in Thailand. The Thai developers know this, and understand where the demand stems from and thus they are focussed on markets like the UK, Germany, Sweden, Russia, Hong Kong, Singapore, Taiwan, and Australia.

But the Baht is strong against the GBP, Euro, Rouble, HK$, S$, TW$ over the lsat 2 - 5 years so those currencies have less purchasing power here also which must also affect condo purchases. But I am aware that a lot of money is coming into condos in Thailand from HK and Singapore purely becasuse the cost is so high to buy in those places so the loss of exchange rate may not be such an important factor.

Could the current slowdown in the US economy be due to the effects being felt in the reduction of Arab investment post 9/11 coupled with the increased costs of oil producing a net outflow of funds to the Middle East instead of a recycling of the funds?

[MJo]

Property market in Singapore seems to be slowing down as well. Latest records show major drop in enblock sales compared to Q1/2007...

Also US economy slow down has direct effect in asian property in a way that already on Monday people (locals and expats) were laid off in Spore when the first US bank fell. So at least few units coming to rental market from the expats.

For me it's quite simple. When economy in general slows down also property market slows down. All of us have seen the stock market going down for several months now. For the reasons why this is happening i can not say much, i leave it to the pros. But when you add oversupply into the picture....

Fully agree that Thais do not care and hold on to their assets but in worst case even Thais have to sell for the market price except for those who have bought with hard cash.

Difficult to say if it's going to slow down or crash totally but it seems that crazy days are over for now. Might be hard time for speculators and maybe you find some good deals in next two years but one thing is for sure. If you are it for a long haul all of this doesn't matter. After 30 years you are underground or can not remember the price nor the year you purchased

[Irene]

Difficult to say if it's going to slow down or crash totally but it seems that crazy days are over for now. Might be hard time for speculators and maybe you find some good deals in next two years but one thing is for sure. If you are it for a long haul all of this doesn't matter. After 30 years you are underground or can not remember the price nor the year you purchased

MJo,

Today, I heard from BBC an interview with one Noble-prized economist from California U., in Santa Barbara, that one cannot avoid downward business cycle and unwise for any government to intervene. An example of Japan was cited. You are right I am for a long haul and looking for opportunities now in this slow down and will profit when an economic cycle of good time has to return.

[thaigene2]

I wonder if all those people who were going to retire to Boca with their $2,000,000 nestegg will instead decide to move to Thailand with their somewhat smaller savings. Property may look cheap to them, where it looks expensive to you. Just thinking out loud...

People who think Boca is lovely will probably think Thailand is a dump. Plus, the USD is getting killed and will probably continue getting killed.

Yes whilst I agree with the general premise that those who were thinking about retiring abroad may choose Thailand over some other place in mexico, etc, closer to home, they are far better off to retire right there in the US - maybe Florida if they want a bit of sunshine. Because their dollar will go much, much farther there than here (assuming it continues to slide that is..) - and so much less to worry about. As for the other pleasures of LOS, well they can come here on holidays just like before - and play scrabble the rest of the year with the old dearie down the hall in room 811.

[thaigene2]

For those who say it always just slows down but never recedes here in LOS, consider this..

Thai banks are really competing to offer cheap mortgages (just like US of A in their misguided no-holds-barred version of Capitalism). So this is different from the last bubble (maybe) when thais were spending General-Grandpa's ill-gotten booty he had burried in cold cash in the garden or hidden in the wheel wells of the Merc.

IF - yes 'if' I don't for sure, the Thais buying all these places now are doing so ON CREDIT then the old paradigm simply won't apply. They CAN'T sit on the property - they would have to sell - for cheap - or turn the keys back over to the bankers - like the Americans are doing. This is why banks SHOULD NEVER fall below 20% downpayment rules.

So we'll see I guess..we need for the demand (the Thai goldrush mentality as I call it) to end. Then wait six months.

[craigt3365]

VegasVic: I think your comment about China is right on. This is the one item that will really hurt Asia. US economy slows, China slows, Asia slows. Alan Greenspan not long ago warned about irrational exuberance in the Chinese market. Remember last time he warned about this? When China crashes...or even slows...it is going to be tough. And it will happen...just a matter of when...

[VegasVic]

VegasVic: I think your comment about China is right on. This is the one item that will really hurt Asia. US economy slows, China slows, Asia slows. Alan Greenspan not long ago warned about irrational exuberance in the Chinese market. Remember last time he warned about this? When China crashes...or even slows...it is going to be tough. And it will happen...just a matter of when...

Don't try and tell lao po that! Six months ago I thought that the chinese equity markets would crash before the Olympics, but since a little air has been released from that bubble recently I have moved over to the camp that China will try and put a good face on all things chinese (I am not sure how they will spin their polution problem, the Tibet situation or human rights,prison labor ect. though) for the world to see at the Olympics, and then after the Olympics is over we will likely see the crash. When this occurs it will undoubtedly hurt the entire region, however there will be one significant benefit, and that will be taking the air out of the commodity markets. China has been hording oil, steel and agriculture products for some time now, which is fine but it has had the effect of rapidly escalating the prices of those commodities on the world markets and thereby hurting consumers in poorer countries like Thailand. Thailand (and the rest of the world) will see substantially lower prices on their oil and ag imports after the downturn in china begins, and that coupled with the dollar strengthening (likely to begin in earnest before this coming fall) should help ease any further increase in inflation for countries like Thailand, even if they catch the chinese flu after the Olympics!

[Irene]

For those who say it always just slows down but never recedes here in LOS, consider this..

Thai banks are really competing to offer cheap mortgages (just like US of A in their misguided no-holds-barred version of Capitalism). So this is different from the last bubble (maybe) when thais were spending General-Grandpa's ill-gotten booty he had burried in cold cash in the garden or hidden in the wheel wells of the Merc.

IF - yes 'if' I don't for sure, the Thais buying all these places now are doing so ON CREDIT then the old paradigm simply won't apply. They CAN'T sit on the property - they would have to sell - for cheap - or turn the keys back over to the bankers - like the Americans are doing. This is why banks SHOULD NEVER fall below 20% downpayment rules.

So we'll see I guess..we need for the demand (the Thai goldrush mentality as I call it) to end. Then wait six months.

Thais do not buy places on credit. The current trend is to buy off the shelf at say Baht 10M by paying a deposit at 5% and 10% within two months and paying 26 instalments for the rest of 15% (over a period of two years). During that 26 month period, there will be a resale market for each unit based on B10M price. By investing Baht 3M upfront payments, you could make a gain of that 3M when the project is near completion and becomes less a dream than on Day one of the off the shelf sale. There is a risk to a buyer if the project is not realised or fails completely, then there can be a maximum loss of Baht3m. Rarely a buyer intends to take a mortgaged loan from a bank when the 26 month time is up. (Why do I know this? The answer is because I am one of them). If you are waiting for a cheaper price at that time, the project would have to fail miserably and/or the speculation has died down to satisfy your crave to buy cheap at that time. The bank plays no part on the retailed buyers at an initial stage but it plays a big part in giving finance to the developers. My open secret is to buy those right in front of the projected or already existing MRT or BTS hoping that the public will give a high price to these buildings when completed. My stay in London helps me to realise that a flat near to South Kensington station fetched a premium rental far higher than those near to Hyde Park. Another big message was a visit to Tokyo where activities are frentic near to each station such as Shinjuku and those in the walking distance to a station for 15 minutes are relatively cheaper and appears provincial, hardly developed, though serene and quiet like living in a temple. I am certain that the current scenario would not cause Thailand to end up with huge subprime loans like the US and sufferings of Wall Street because those who invested the way I described do not cause a bank to collapse but can cause his personal wealth to collapse. They are prepared to go for this because they all have made high profits in the past and now loving the game.

My intention in writing is not to push up the value of my investment and I am not an estate agent hoping to generate the activitie to generate commission income. I just like to enlighten those who seems to be certain of their opinions. I may be wrong in my speculation but I am a risk taker on investments that give me more odds of winning than losing. I would love to read someone telling me that I am wrong rather than those casting doubt on my integrity on the purpose of this writing.

[thaigene2]

Hi Irene - another great post that property investors worldwide should read.

We're on the same page. And my guess is nearer to Hammersmith is better still (and always was) since we all know South Ken is a drag to get home to by tube at night -- or maybe now Chelsea Docks is getting better as 'modern' quality beckons - nearly bought there - should have!! (who wants 'old' anymore in "old" blighty?). The Dove is always a nice stop along the river -- Tokyo-Shinjuku? Don't want Tokyo - someone else can pay for my digs there ...(white guys stink, only chinese girls -sorry - round eyes can not have japs - Koreans almost as bad - okay bye, bye Japan/Korea..You Japs are too weird for me anyway - I don 't care about you either since i never learned the bondage thing)..

So back to LOS since we're here..

I agree with Irene that this is simple stuff - you buy a place near the rapid transit stations and watch the CBD grow around them. The more central the better. Straightforward.

BUT my question that Irene is only guessing at - and she doesn't know the answer despite her musings - how many Thais are now using CREDIT to keep the market bouncing along right now for revenue properties?????? Let's WAIT AND SEE - -at least 6 months I tnink before the fallout becomes clear..

Edited March 21, 2008 by thaigene2

[roamer]

Hi Irene - another great post that property investors worldwide should read.

We're on the same page. And my guess is nearer to Hammersmith is better still (and always was) since we all know South Ken is a drag to get home to by tube at night -- or maybe now Chelsea Docks is getting better as 'modern' quality beckons - nearly bought there - should have!! (who wants 'old' anymore in "old" blighty?). The Dove is always a nice stop along the river -- Tokyo-Shinjuku? Don't want Tokyo - someone else can pay for my digs there ...(white guys stink, only chinese girls -sorry - round eyes can not have japs - Koreans almost as bad - okay bye, bye Japan/Korea..You Japs are too weird for me anyway - I don 't care about you either since i never learned the bondage thing)..

So back to LOS since we're here..

I agree with Irene that this is simple stuff - you buy a place near the rapid transit stations and watch the CBD grow around them. The more central the better. Straightforward.

BUT my question that Irene is only guessing at - and she doesn't know the answer despite her musings - how many Thais are now using CREDIT to keep the market bouncing along right now for revenue properties?????? Let's WAIT AND SEE - -at least 6 months I tnink before the fallout becomes clear..

No question that in an uncertain world following one of life's great maxims "Location, location, location" is a great way of minimizing risks . My unease would rest around the developing complexity in respect of the world financial markets, too many unknowns, its like watching a chemical mixture boiling under reflux, controlled until more elements are added to the mixture, the dynamic becomes ever more complex until it finally can no longer be cooled down and escapes the flask. Government intervention in the markets are the financial equivalent of the cooling in the chemistry model, if the dynamics exist then the cooling can delay the reaction but cannot contain it.

Really is a wait and see time, not sure whether the old Thai practice of just holding on will work this time.

[think_too_mut]

...was a visit to Tokyo where activities are frentic near to each station such as Shinjuku and those in the walking distance to a station for 15 minutes are relatively cheaper and appears provincial, hardly developed, though serene and quiet like living in a temple.

Did you Google it or you have really been there?

Shinjuku station sees 2 mil passengers a day (compared to the entire BKK BTS that carries 640K ppl a month).

Taking into account weekends and holidays, more than the entire planet's population goes through Shinjuku each year.

The area is like Manhattan in NYC. Just more, much more, busy.

How do I know? Shinjuku has been my home for 5 years now.

[PadThaiGuy]

For those who say it always just slows down but never recedes here in LOS, consider this..

Thai banks are really competing to offer cheap mortgages (just like US of A in their misguided no-holds-barred version of Capitalism). So this is different from the last bubble (maybe) when thais were spending General-Grandpa's ill-gotten booty he had burried in cold cash in the garden or hidden in the wheel wells of the Merc.

IF - yes 'if' I don't for sure, the Thais buying all these places now are doing so ON CREDIT then the old paradigm simply won't apply. They CAN'T sit on the property - they would have to sell - for cheap - or turn the keys back over to the bankers - like the Americans are doing. This is why banks SHOULD NEVER fall below 20% downpayment rules.

So we'll see I guess..we need for the demand (the Thai goldrush mentality as I call it) to end. Then wait six months.

Thais do not buy places on credit. The current trend is to buy off the shelf at say Baht 10M by paying a deposit at 5% and 10% within two months and paying 26 instalments for the rest of 15% (over a period of two years). During that 26 month period, there will be a resale market for each unit based on B10M price. By investing Baht 3M upfront payments, you could make a gain of that 3M when the project is near completion and becomes less a dream than on Day one of the off the shelf sale. There is a risk to a buyer if the project is not realised or fails completely, then there can be a maximum loss of Baht3m. Rarely a buyer intends to take a mortgaged loan from a bank when the 26 month time is up. (Why do I know this? The answer is because I am one of them). If you are waiting for a cheaper price at that time, the project would have to fail miserably and/or the speculation has died down to satisfy your crave to buy cheap at that time. The bank plays no part on the retailed buyers at an initial stage but it plays a big part in giving finance to the developers. My open secret is to buy those right in front of the projected or already existing MRT or BTS hoping that the public will give a high price to these buildings when completed. My stay in London helps me to realise that a flat near to South Kensington station fetched a premium rental far higher than those near to Hyde Park. Another big message was a visit to Tokyo where activities are frentic near to each station such as Shinjuku and those in the walking distance to a station for 15 minutes are relatively cheaper and appears provincial, hardly developed, though serene and quiet like living in a temple. I am certain that the current scenario would not cause Thailand to end up with huge subprime loans like the US and sufferings of Wall Street because those who invested the way I described do not cause a bank to collapse but can cause his personal wealth to collapse. They are prepared to go for this because they all have made high profits in the past and now loving the game.

My intention in writing is not to push up the value of my investment and I am not an estate agent hoping to generate the activitie to generate commission income. I just like to enlighten those who seems to be certain of their opinions. I may be wrong in my speculation but I am a risk taker on investments that give me more odds of winning than losing. I would love to read someone telling me that I am wrong rather than those casting doubt on my integrity on the purpose of this writing.

WOW. Buy in a good location. Thanks for the investment tip.

[shochu]

irene,

You just revealed yourself as a used car salesmen - pity on you. I wondered why you kept harping the tiresome mantra of "must be very close to the subway"and now I know. By this reasoning, then 90+% of condos are not to be invested in?

AND your buddy's comments border on racism - how lovely he must be,

YES you, thaigene,

AND very astute comments on tokyo - when were you there - just after the war??

[Irene]

irene,

You just revealed yourself as a used car salesmen - pity on you. I wondered why you kept harping the tiresome mantra of "must be very close to the subway"and now I know. By this reasoning, then 90+% of condos are not to be invested in?

AND your buddy's comments border on racism - how lovely he must be,

YES you, thaigene,

AND very astute comments on tokyo - when were you there - just after the war??

shochu,

First, I have no intention of selling my condos, so how can I be a used car salesman. I share my view with others and conclude in my mind of staying away from those condos that have no fall back prospects.

Readers may or may not subscribe to this belief that does not affect me at all. I am certain that for some readers, they must have some fruits of thought from me.

Second, I don't know who is thaigene.

Third, I have been to Tokyo last year and walk all over the places and had that impression.

I must hit on your soft spots unintentionally to cause you to be so mean in labelling your fellow participants. Look at yourself and ask what have you contributed to this forum?

[Irene]

...was a visit to Tokyo where activities are frentic near to each station such as Shinjuku and those in the walking distance to a station for 15 minutes are relatively cheaper and appears provincial, hardly developed, though serene and quiet like living in a temple.

Did you Google it or you have really been there?

Shinjuku station sees 2 mil passengers a day (compared to the entire BKK BTS that carries 640K ppl a month).

Taking into account weekends and holidays, more than the entire planet's population goes through Shinjuku each year.

The area is like Manhattan in NYC. Just more, much more, busy.

You got my message wrongly. Places away from the centres of rail stations to be least developed comparing with the centre. If you read economic history of UK and USA, development came to the area with ease of transportation. Look at China, the inland far away from seaports are hardly developed.

How do I know? Shinjuku has been my home for 5 years now.

[Irene]

No question that in an uncertain world following one of life's great maxims "Location, location, location" is a great way of minimizing risks . My unease would rest around the developing complexity in respect of the world financial markets, too many unknowns, its like watching a chemical mixture boiling under reflux, controlled until more elements are added to the mixture, the dynamic becomes ever more complex until it finally can no longer be cooled down and escapes the flask. Government intervention in the markets are the financial equivalent of the cooling in the chemistry model, if the dynamics exist then the cooling can delay the reaction but cannot contain it.

Really is a wait and see time, not sure whether the old Thai practice of just holding on will work this time.

roamer,

Great post! This may turn out to be a business cycle of the low and I have been pondering whether I should cash instead of stocks for a few months before the dust settles in.

[LaoPo]

VegasVic: I think your comment about China is right on. This is the one item that will really hurt Asia. US economy slows, China slows, Asia slows. Alan Greenspan not long ago warned about irrational exuberance in the Chinese market. Remember last time he warned about this? When China crashes...or even slows...it is going to be tough. And it will happen...just a matter of when...

Don't try and tell lao po that! Six months ago I thought that the chinese equity markets would crash before the Olympics, but since a little air has been released from that bubble

Oh Vic, Oh Vic....and craigt3365 also, you are both so lousy informed it's laughable. You talk a lot but you are so wrong.

Haven't you noticed that more than 40% of air has been released in the past 5 months on the Shanghai stock market already ?

Shanghai SE Composite:

October 16, 2007: 6.092

March 25, 2008 : 3.629

Do you see that Vic....? 40% of air, whilst you claim 'a little air has been released from that bubble'....

Now, come on, be a man and admit you're wrong. I would be surprised if you would BUT you would have my respect !

LaoPo

[Rdrokit]

I think the name of this thread is "Housing Bubble To Hit Los, When will LOS feel the crunch" and all I have read are replies on the condo market. What about the House Market? I live in Korat where there are hardly any condos. Everyone here lives in a house and the housing market here is booming. There are about 5 developers here building in about 10 housing developments. As soon as one is sold out they start on another one. The development I live in has just bought 1000 rai to add more homes. I see no slow down here and as soon as a home is built it is sold. In fact in my development most of the homes are presold.

[shochu]

irene,

you have been caught perjuring yourself!

you have stated that you buy off plan and pay the deposit to flip it for the equivalent profit.

when you were offering advice I thought - okay - here is someone who is doing a good deed. when i thought that you took older condos and refurbished them - I THOUGHT - hey - here is someone working for a living putting condos back on the market that would otherwise just deteriorate and thus providing a needed market function in a city that requires it - but then your rhetoric was like a boken record and anyone who has to repeated say - I AM NOT AN AGENT - generally is.

why am I up on you - WELL BECAUSE - i think anyone that flips condos is a used car salesmen - no better than a ticket scalper - who based purely on a profit motive artificially drives up the price of a condo to the point where bubbles form and keeps the locals priced out of the market and thus creates problems - BASED PURELY ON GREED - and by offering no real product except the ability to buy something that they have no need for except to profit by it. i dislike scalpers and thus I also dislike flippers. you profit from the sweat of others just by being in a position to hold it over them. you distort the market for a product that should first and foremost be a home to people that need them at an affordable price. you and people like you are pricing the thais's out of their own homes so that they will perpetually be in debt. i see nothing wrong in trying to make money - BUT -flipping is a very low form of making money that is on the level of used car salesmen, scalpers, snake oil salesmen, etc.

AND if your tokyo analysis is anyting to go by - then all you have offered for advice is most likely the same - an end game for your gain!

[craigt3365]

LaoPo...sure, the market has gone done a little. But the real crash will be the economy. That is what I was referring to. When demand worldwide slows (as it is now), China's economy will slow (as it is widely predicted to do). Which will slow a lot of Asian countries...probably Thailand....and I won't even get into the political issues in China that could really mess things up. That country is a mess.

You post in a very unusual way...

[ray08]

irene,

you have been caught perjuring yourself!

you have stated that you buy off plan and pay the deposit to flip it for the equivalent profit.

when you were offering advice I thought - okay - here is someone who is doing a good deed. when i thought that you took older condos and refurbished them - I THOUGHT - hey - here is someone working for a living putting condos back on the market that would otherwise just deteriorate and thus providing a needed market function in a city that requires it - but then your rhetoric was like a boken record and anyone who has to repeated say - I AM NOT AN AGENT - generally is.

why am I up on you - WELL BECAUSE - i think anyone that flips condos is a used car salesmen - no better than a ticket scalper - who based purely on a profit motive artificially drives up the price of a condo to the point where bubbles form and keeps the locals priced out of the market and thus creates problems - BASED PURELY ON GREED - and by offering no real product except the ability to buy something that they have no need for except to profit by it. i dislike scalpers and thus I also dislike flippers. you profit from the sweat of others just by being in a position to hold it over them. you distort the market for a product that should first and foremost be a home to people that need them at an affordable price. you and people like you are pricing the thais's out of their own homes so that they will perpetually be in debt. i see nothing wrong in trying to make money - BUT -flipping is a very low form of making money that is on the level of used car salesmen, scalpers, snake oil salesmen, etc.

AND if your tokyo analysis is anyting to go by - then all you have offered for advice is most likely the same - an end game for your gain!

I Don,t agree with most of Irene,s view of the Bangkok market , but by saying people who flip property are greedy , and pricing people out of there own homes is a pretty silly statement

First and foremost everyone is entitled to make a living and speculation on property is no worse than buying shares or commodities in the hope to "flip"them to someone else at a higher price or God forbid short the market ,

The Thais have all the advantages in this market , eg guranteed land ownership and can buy at a discount to foreigners in most Condos due to the 50% rule ,

And Most important if someone wants to pay extra for a flipped unit , Good luck to them ,because the speculator who threw down the deposit took the risk that developer would not go bust, project quality good and every other headche from buying off the plan,

Just for the recoerd i would never buy from a speculator unless they were in deep trouble ,so you see there is a place for everyone in this market place , and we all need to eat

[bingobongo]

the thing about bubbles, is that they are difficult to see when you are standing in the center of one (whether it be housing, commodities, stocks, bubble gum, or soap)

[LaoPo]

LaoPo...sure, the market has gone done a little. But the real crash will be the economy. That is what I was referring to. When demand worldwide slows (as it is now), China's economy will slow (as it is widely predicted to do). Which will slow a lot of Asian countries...probably Thailand....and I won't even get into the political issues in China that could really mess things up. That country is a mess.

You post in a very unusual way...

-40% down in 5 months, and you call that a little ? hmmmm.....

Of course China's economy will slow further and I've said so before many times, but some people can't read, unfortunately.

If demand in the west slows, due to housing and financial crisis in the west, of course production and thus export slows, not just in China but India, Thailand, Vietnam, Taiwan, Japan etc. as well.

That's a normal market reaction but more than 60% of the world population -some 3.5 Billion people- will be in trouble and the whole world will be in a mess if the economy slows further and further. More and more people will be living in tents and not because of an earthquake

Political issues in China...? Yes, let's leave that as you have no idea about that country and it's population. You form an opinion based on western news and I leave it with that.

I post unusual ? Maybe I am unusual...

LaoPo

[donx]

irene,

you have been caught perjuring yourself!

you have stated that you buy off plan and pay the deposit to flip it for the equivalent profit.

shochu,

Can you point me to the post where Irene states that he/she buys off plan and pays the deposit to flip it for the equivalent profit? As far as I can recall, Irene has always stated that he/she rents out all of the condos that he/she buys.