Gloomy Days Ahead For Asia's Housing Markets

[quiksilva]

What's your source on that bingo?

I buy the interest rates story, I have seen this coming for several years now. But I am curious to understand how they can say that FDI has been slow to pick up in Thailand. Picl up from what? The fact is the number and value of BOI applications actually increased last year and this is not mickey mouse figures either, these are genuine projects that are going ahead.

Eg Suzuki have purchased a 500 rai site in Hemeraj, Tata Motors acquired a 70% stake in Thonburi Motors and have started production of 1 ton pick ups, Ford, Honda and Toyota have all announced and received approvals for large amounts of FDI in the eco car project worth over 60 billion Baht. Volkswagen is circling the country too. That's to say nothing of the amount of downstream automotive suppliers coming in or even to say anything of other industries which includes the likes of Mitsubishi Heavy Industry, Kubota, Epson, Western Digital, Fisher & Paykel (who are expanding again after only opening a year ago), and a whole host of others.

Interest rates up, yes, limited FDI well that's relative but for Thailand its been pretty good.

[jumnien]

I have to agree with boingo on this one. There is no gloominess ahead for Thailand, just relatively lower prices overall!

[chiangmaiexpat]

With the current inflation, building becomes more expensive rather quickly. Although building is still cheap in Thailand compared to the EU, it is not as cheap as it once was. What this means is that one may now find better deals buying somewhat older properties rather than building a new one, or than buying a unit/house that has yet to be built. When I look at the present offerings in Thai real estate magazines/websites this trend appears to be on the horizon. Could it be that we are heading towards a buyer market? Considering the vacancy rates in some locations, we should already have a buyer market. However, low real estate taxes and low maintenance cost seem to prevent that. In other words, owners prefer to let their properties rot rather than to lower prices. This doesn't make much economic sense, but then again economics isn't always rational, especially not in Thailand.

I think the current "gloominess" in Thailand comes from the fact that salaries haven't kept pace with inflation during the last five years and consumers therefore have less purchase power now. The effect for the real estate market seems to be partly chusioned by the fact that interest rates are at an all-time low. It's hard to say where this will lead.

Cheers, CMX

[backflip]

bingobongo's April Fool's joke is several weeks late. According to his graph and oh-so-clever comments, Japanese real estate prices are the same as they were 25 years ago. Absolute rubbish.

Too, he believes that the graph is indicative of all real estate in every country in the world. Nonsense.

He also believes that the 6.2% annual inflation rate that he quotes understates the actual inflation rate, because he has done an analysis of his own figures. It is not pure speculation that he possesses neither the statistical knowledge nor the intellectual acumen to calculate his personal cost of living, much less than the cost of living for 65 million people in Thailand.

[donx]

bingobongo's April Fool's joke is several weeks late. According to his graph and oh-so-clever comments, Japanese real estate prices are the same as they were 25 years ago. Absolute rubbish.

Too, he believes that the graph is indicative of all real estate in every country in the world. Nonsense.

He also believes that the 6.2% annual inflation rate that he quotes understates the actual inflation rate, because he has done an analysis of his own figures. It is not pure speculation that he possesses neither the statistical knowledge nor the intellectual acumen to calculate his personal cost of living, much less than the cost of living for 65 million people in Thailand.

bingobongo's charts remind me of another forum member who used to post financial charts but no longer posts here. Remember Harmonica's outrageous claims that oil would soon be trading for around $10 a barrel? When it hit $70 a barrel he pretended that it didn't happen and that he was still looking for it to drop well below $50 a barrel.

Perhaps some day bingobongo will just disappear from this forum the same way Harmonica suddenly left.

I doubt that bingobongo will ever say that there is a good time to buy real estate.

For full disclosure, I don't own any property in Thailand. My wife owns several plots of land free and clear including farm land and beach front property. I plan on owning a condo in or around Bangkok but I am in no hurry to buy since I live in the US. If it is true, as bingobongo insists, that property values are decreasing, then I have time to wait until I find a good value. So, bingobongo, when will we hit the bottom of the market? Please don't tell me that it is going to keep going down forever. That would be contrary to most of the real estate markets in the world. You keep saying "Why pay more now when you can get it for less in the future", so when do you predict to be the next good buying opportunity?

By the way, bingobongo, you rarely respond directly to anyone's questions. I hope you don't do what you typically do and simply post another link to some article or attach a home-grown chart. I'm seriously interested in your opinion on when the next best buying opportunity is.

[cclub75]

bingobongo's April Fool's joke is several weeks late. According to his graph and oh-so-clever comments, Japanese real estate prices are the same as they were 25 years ago. Absolute rubbish.

Too, he believes that the graph is indicative of all real estate in every country in the world. Nonsense.

He also believes that the 6.2% annual inflation rate that he quotes understates the actual inflation rate, because he has done an analysis of his own figures. It is not pure speculation that he possesses neither the statistical knowledge nor the intellectual acumen to calculate his personal cost of living, much less than the cost of living for 65 million people in Thailand.

Backflip, we all understand that you are loosing your nerves... Because your rozy and shiny way to see the world is falling apart, slowly but surely.

Datas are against you.

But that shouldn't be a reason to become too personal.

[quiksilva]

Datas are against you.

Please share these "datas" and the sources of the same. It will make for interesting reading.

[zorro1]

Datas are against you.

Please share these "datas" and the sources of the same. It will make for interesting reading.

"datas " ?? At least the property deficient bingo bongo gives a link to accommodate his short falls

[quiksilva]

Yes I picked up on that too, hence the quotation marks!

[LivinLOS]

bingobongo's charts remind me of another forum member who used to post financial charts but no longer posts here. Remember Harmonica's outrageous claims that oil would soon be trading for around $10 a barrel? When it hit $70 a barrel he pretended that it didn't happen and that he was still looking for it to drop well below $50 a barrel.

Ohh lord.. I remember him.. Just went hunting and found one of his last posts to me..

http://www.thaivisa.com/forum/index.php?sh...27244&st=25

QUOTE(LivinLOS @ 2005-10-21 17:35:55)

And what value was your initial short call ?? mid March IIRC..

I called a 70 USD oil this year.. What did we hit ??

10 USD oil.. 250 gold.. deflation.. superb comedy..

*

Hey ######, deal with your whopping losses like a man instead of taking these stupid, incessant potshots at me. I'm not responsible for your stupidity and the towering torrents of rubbish you spewed out in your predictions on the US Dollar. You have singlehandedly taken stupidity to a new plateau. And, I'm not your daddy.

Now get the <deleted> out of my face!

Ahh yes.. that 250 gold was such a nice call Harm.. To go right up there with 10 Oil and dollar recovery..

[bingobongo]

so if prices continue to fall as interest rates were lowered, what happens to prices when interest rates are raised to control rampant inflation........

[donx]

so if prices continue to fall as interest rates were lowered, what happens to prices when interest rates are raised to control rampant inflation........

See? You did it again. Can't you respond to my question?

Here it is again, in color this time: How long will we have to wait for the bottom of the real estate market in Thailand?

[bingobongo]

here is a fun diagram......

emotion and real estate are not appropriate when placed together, buy when prices make sense, otherwise it is a Capital Trap

Edited May 8, 2008 by bingobongo

[donx]

here is a fun diagram......

emotion and real estate are not appropriate when placed together, buy when prices make sense, otherwise it is a Capital Trap

Why are you so emotionally attached to your rental apartment?

Now, stop ignoring me and answer my question. When do you predict prices will be in line with their real value in Thailand?

[quiksilva]

here is a fun diagram......

emotion and real estate are not appropriate when placed together, buy when prices make sense, otherwise it is a Capital Trap

Interesting graph, can you see the underlying trend?

[LivinLOS]

yes.. rising inflation..

[quiksilva]

Yes, or you could say that the value of money diminishes over time.

Real estate prices and values also rise over time just like all things, so long as they are kept in good condition. If this was not true we could all buy pints of beer for 5p, but alas this is not how the world works.

Edit: If you are one of those people who still own the home that their parents purchased and raised their families in, would you sell it for the same price that they paid?

Edited May 9, 2008 by quiksilva

[pkrv]

Yes I see the trend - Bingo is wasting our time, he is making up and publishing graphs as he goes along - he is obviously bored.

On a serious note though - perhaps this helps for one of the market segments in Bangkok. We paid about 100K psm back in April 2005 for The Park (1 Soi Chidlom), I believe The Athenee was in the same ball park. Are there any reputable sources who can estimate the worth psm now (virtually at completion)?

No I am not selling - This information may help understand one of the components of the picture. Bingo - please don't quote, as it is probably a waste of kinetic energy on the keyboard.

BTW I am not saying we may not be in for a tough time in the future - But somehow I don't think the world is going to end either. Mind you we took the precaution of battening down the hatches (just in case) several years ago, which oddly puts us in a very strong position today, odd that isn’t it? I believe the commonly applied term is a ‘war chest’.

[pkrv]

Aaaaahh haaaahhh, my research has found a job opening perfect for you Bingo. It's on Oxford Street (London) and for a Sandwich Board bearer. The text to be displayed is "The End Is Nigh".

Please note the web site for this 5,000,000k GBP per year position (I may have missed out some zeros).

Graphs and description can be found at:

www.totalbollocks.com

Disclaimer - PKRV is not to be held liable for any innacuracies in this job opportunity.

[backflip]

"Backflip, we all understand that you are loosing your nerves..."

I'm not "loosing" anything. I am not losing anything but my hair.

[thaigene2]

Unfortunately the graph posted does not really tell us all that much. Values go up and down, and just as surely as things go down they come back up again, and vice versa. C'est la vie!

Take that chart back to the 1970's, and now tell me is the bottom of the trough then, higher or lower than today than the bottom of the trough today?

What is the general trend?

A few posts ago you were sayng that if you wait 10 years or so prices will go up. Now you are saying that prices from 1980 to now are just an abberatioin and we have to go back to the 70s? What about the millions of Japanese who bought housing in the late 80s. That is 20 years ago. Comforting them by saying the longterm trend means their house will one day be worth more: Just how long do you think that will be. Prices now are lower than they were even 3 years ago and still no firm bottom to the market.

Comparing the Japanese market with Bangkok- in tokyo there is almost 99% occupancy, while in Bangkok there are around 300,000 empty units.

Yes. Everyone's trying to avoid the "D" word - as in "Deflation". That's what happened in Japan. It was going crazy the other way for years - maybe 1960's to early 80s inflation made the country an extremely expensive place - including property - especially property given the scarcity in big places like Tokyo.

Personally, while Quicksilva makes a good point that local conditions trump all other considerations, a big worldwide recession triggered by what's happening in the US at the moment combined with the balloon-like crazy inflation of commodities and oil driven by China - has gotta be a disaster waiting to happen in even the most bullish person's mind. When it pops - and does anyone think it won't? - the deflationary cycle that follows would affect everywhere. Property is no exception - Thailand and other 'second' home markets (Mexico, Carib, southern spain, cyprus, etc) will ALL get hammered. Who cares if rich Thais sit on empty property and don't sell? You can bet the farangs/japanese/koreans WILL sell, and the more they need the cash, the more they will discount their places to off-load - just like stocks, just like anything.

[zorro1]

Unfortunately the graph posted does not really tell us all that much. Values go up and down, and just as surely as things go down they come back up again, and vice versa. C'est la vie!

Take that chart back to the 1970's, and now tell me is the bottom of the trough then, higher or lower than today than the bottom of the trough today?

What is the general trend?

A few posts ago you were sayng that if you wait 10 years or so prices will go up. Now you are saying that prices from 1980 to now are just an abberatioin and we have to go back to the 70s? What about the millions of Japanese who bought housing in the late 80s. That is 20 years ago. Comforting them by saying the longterm trend means their house will one day be worth more: Just how long do you think that will be. Prices now are lower than they were even 3 years ago and still no firm bottom to the market.

Comparing the Japanese market with Bangkok- in tokyo there is almost 99% occupancy, while in Bangkok there are around 300,000 empty units.

Yes. Everyone's trying to avoid the "D" word - as in "Deflation". That's what happened in Japan. It was going crazy the other way for years - maybe 1960's to early 80s inflation made the country an extremely expensive place - including property - especially property given the scarcity in big places like Tokyo.

Personally, while Quicksilva makes a good point that local conditions trump all other considerations, a big worldwide recession triggered by what's happening in the US at the moment combined with the balloon-like crazy inflation of commodities and oil driven by China - has gotta be a disaster waiting to happen in even the most bullish person's mind. When it pops - and does anyone think it won't? - the deflationary cycle that follows would affect everywhere. Property is no exception - Thailand and other 'second' home markets (Mexico, Carib, southern spain, cyprus, etc) will ALL get hammered. Who cares if rich Thais sit on empty property and don't sell? You can bet the farangs/japanese/koreans WILL sell, and the more they need the cash, the more they will discount their places to off-load - just like stocks, just like anything.

Just curious, why did you single out "second home markets"

[think_too_mut]

Real estate prices and values also rise over time just like all things, so long as they are kept in good condition. If this was not true we could all buy pints of beer for 5p, but alas this is not how the world works.

No shit, Sherlock?

How did Japanese properties declined as much as 80% and the US and the UK are declining at double digits quarter after quarter?

[jumnien]

No one expects US housing valuations to ever hit the levels they were at 5 years ago. They may recede 30 - 40% from their present value, but never so low as 5 years ago.

[think_too_mut]

No one expects US housing valuations to ever hit the levels they were at 5 years ago. They may recede 30 - 40% from their present value, but never so low as 5 years ago.

No one expected housing valuations to drop at all, ever.

[jumnien]

No one expects US housing valuations to ever hit the levels they were at 5 years ago. They may recede 30 - 40% from their present value, but never so low as 5 years ago.

No one expected housing valuations to drop at all, ever.

I thought most people conceived of houses going up and down like stock prices, generally up over the long haul.

[Heng]

A lot of people like to talk about or talk down land like it might go to zero (unlike stocks which CAN go to zero).

Nothing wrong with stocks, it's just that I'd rather hold them through an institutional risk filter: banks taking my funds and investing in whatever markets they see fit... and if they can make 15-20%, great, just so long as I get my fixed 6-8% without a sentence at the bottom saying 'past returns may not guarantee future results'.

[bingobongo]

do you think this will be presented on the back of the shiny glossy brochures when trying to sell the .........thai condo high-so lifestyle?

raise interest rates and commodity prices will come down as will the lovely overbuilt condo market

'Half the country' fears another coup: Poll

More than 50 per cent of respondents to an Abac Poll fear there will be another coup within the next six months, the pollster said on Sunday.

Abac Poll by Assumption University said that of 3,404 people surveyed, 55.6 per cent said the military might launch another coup during the next six months, and 54.6 per cent expected some unexpected, violent event to occur.

Only 53.6 per cent of respondents surveyed from May 6-10 expect Samak Sundaravej to remain as prime minister.

There has not been a military coup since Sept 19, 2006, when the army unseated prime minister Thaksin Shinawatra.

Some 87.8 per cent of people said they expected to face more expensive commodity prices and 80.1 per cent were braced for increased crime.

http://www.bangkokpost.com/breaking_news/b...s.php?id=127604

Edited May 11, 2008 by bingobongo

[CaptHaddock]

Bongo,

Don't give up the effort! I appreciate your skeptical posts. While I don't have direct knowledge of the Thai housing market myself, the self-serving mendacity of the real estate lobby sounds just like the song of the bubble deniers here in the States. And we can see now how well that has turned out.

Or course, they will never give up either. "It is difficult to get a man to understand something when his salary depends upon his not understanding it" - Upton Sinclair

Capt Midnight

[quiksilva]

Real estate prices and values also rise over time just like all things, so long as they are kept in good condition. If this was not true we could all buy pints of beer for 5p, but alas this is not how the world works.

No shit, Sherlock? Yes that right no shit. I know it bores me to point out the blindingly obvious too but it seems I have no choice sometimes

How did Japanese properties declined as much as 80% and the US and the UK are declining at double digits quarter after quarter? So they'll be free at Christmas? If not how low will they drop? Will it be lower than the last cycle or the cycle before that?

If you are you being serious then it sounds like its not me who has the rose tinted glasses on, quite the opposite.

As for noone thinking values will decline, speak for yourself, I have never head such utter rubbish. Sunrise hit the nail on the head just like all investment classes, property values fluctuate over time, history has taught us this. The extent of the decline will be affected by the global economic climate insofar as that will affect domestic economies. Again: over the long term the value of economies grow, prices rise, and so does real estate/ Of course there exceptions Zimbabwe, Iraq, Sierra Leon spring to mind, cookies if you can guess why!

The reason why the UK is badly affected by the recent meltdown of the USA is because 30% of UK GDP is derived from the financial services industry. We can say then, that the UK is tied in to global affairs much more closely than say, Thailand (no surprise there) so it should also not be of a surprise to learn that Thailand will not be as affected by this current climate as say, the UK, for example.

As for the latest scaremongering by Bongo. Would you buy shares on an ABAC poll result? No. So I wouldn't let that obscure my decisions about real estate either.

Edited May 12, 2008 by quiksilva