Why Shouldn't I Buy R/e Right Now?

[zorro1]

Im looking at purchasing another condo in the BKK area for my mother as an investment and for her to stay here 6 mths of the year. Every thread ever written seems to say "dont purchase now" and some are very old threads lol. Is there ever a good time to purchase? I never worry about economic forces and just purchase and have always done very well. Just a general consensus really, but is there any major reason why buying now would not be advised?

[sweetchariot]

If you're not looking to turn a quick profit then there aren't too many reasons not to, but I personally wouldn't.

The market here has slowed to a crawl, and there is massive over supply, but this has not been reflected in prices......yet.

Don't expect to make a profit in the short to medium term.

I suppose the only other reason is political instability, but other than driving down demand I can't realistically see this having any other adverse effects on condo owners.

[zorro1]

There would be no intention to sell ever unless of some unforeseen circumstances. I guess its a buyers market so some serious negotiations are in order..Sirikit centre is having a condo expo this weekend so will go for a wander and check it out

by the way Sweet Chariot or any one else, has there ever been a major documented slump in R/E prices in Bkk like what is currently happening in the states and OZ, UK?

Edited August 23, 2008 by zorro1

[sweetchariot]

Between '98 and '99 there was a 27% downturn in property prices following the Asian financial crisis, which took until 2006 to fully recover in real terms. Don't know about further back than that though.

Some details here: http://www.globalpropertyguide.com/Asia/Th...d/Price-History

[chiang mai]

My guess is that folks everywhere have somewhat underestimated the degree to which Asian and Far Eastern economies will suffer as a result of the financial shenanigans in the West. I personally see this region suffering a lot more pain before things start to get better and that includes the housing and currency markets. For those reasons I think that staying out of real estate is a good idea currently.

[alantheembalmer]

No matter when or where I have bought property, the only criteria I have used is "if it is the right property for me, and I can afford the price, then I purchase it". An oppotunity should be taken when it occurs, after all, it might be your best, and it might be your last.

[glyph]

"I personally see this region suffering a lot more pain before things start to get better and that includes the housing and currency markets. "

This mindset has been the mainstay for the Thai real estate for the past decade, and it is wrong.

[JimmyTheMook]

An oppotunity should be taken when it occurs, after all, it might be your best, and it might be your last.

Hmmm, plus the baht should be taking a dump anytime.

Try and time it right.

[russianrobert]

An oppotunity should be taken when it occurs, after all, it might be your best, and it might be your last.

Hmmm, plus the baht should be taking a dump anytime.

Try and time it right.

I think that's right. If you are considering to buy as an investment.

A lot of condos will be comming on the market shortly as many large projects are nearing completion. As has been mentioned the Baht could be heading further south soon as well.

[zorro1]

Was at the Condo/housing R/E expo at Sirikat and was pact to the rafters, mainly 99.9% Thai. Found a place off the plan ready in 2 years near the Bts (station ready 12 mths) for the price of a descent car back home. 36sqm fully furnished. Not a big investment but a nice location

[sweetchariot]

"I personally see this region suffering a lot more pain before things start to get better and that includes the housing and currency markets. "

This mindset has been the mainstay for the Thai real estate for the past decade, and it is wrong.

Really?

Are you a real estate agent by any chance?

[thaigene2]

Was at the Condo/housing R/E expo at Sirikat and was pact to the rafters, mainly 99.9% Thai. Found a place off the plan ready in 2 years near the Bts (station ready 12 mths) for the price of a descent car back home. 36sqm fully furnished. Not a big investment but a nice location

Why in an overbuilt, overheated market like we're in right now would you buy off-plan? How confident would you be that the place will be built? As to your general question - if money isn't an issue than it doesn't matter does it - you just buy something you like?

[zorro1]

I see your point but I really like new (maybe i have Asia fever lol) its only a few mill baht 50,000bht/sqm 18th floor fully furnished near BTS. Not really a concern and it does give a few options at the end

85% payment to buy

Rent

Flip(flame away)

I already have a major base and not moving or selling and I bought right on completion and they wouldn't discount off the plan so I made a silly offer and found a flipper who said yes so I already done that. This is just a smallish outlay and I do agree with you If I was going to spend 10-20 mill bht right now I would look at it from a lot of different angles.

edit

they have several completed projects and a descent reputation. I also went to the site and they well into foundation stages although of course that could stop anytime.

Edited August 24, 2008 by zorro1

[russianrobert]

Was at the Condo/housing R/E expo at Sirikat and was pact to the rafters, mainly 99.9% Thai. Found a place off the plan ready in 2 years near the Bts (station ready 12 mths) for the price of a descent car back home. 36sqm fully furnished. Not a big investment but a nice location

Zorro,

i was there this afternoon and i came back 3 hundredweight of gumph.

I am particularly interested in "off plan" and like the idea of something somewhere near one of the new extensions to the MRT or BTS.

Any idea where i can find a plan online of future developments to public transport in BKK?

Cheers

[zorro1]

Unfortunately they don't really cater for farangs at these expos. I found a brochure with the next few stops AFTER On Nut (on nut is not there its just off the map). They are scheduled to be operating within 12 mths or so they say. There a are a number of developments around the area

IMG.pdf

Edited August 24, 2008 by zorro1

[xbusman]

You ask a tough question that has a lot of possible answers depending on your situation.

Here are the facts.

First rule of Thailand, NEVER INVEST MORE THAN YOU CAN WALK AWAY FROM

I think you fit that rule, you seem to be talking about chump change out of your budget. If this is indeed the case then you need to consider the following.

The rent/purchase ratio and per capita income is way out of whack. At best, its a lousy investment and there are many better things to do with your money than waste it on property in Thailand. However, disposable income is not subject to investment requirements. Driving a Bentley instead of an Accord is a perfect example. So if its disposable money and you feel better owning a condo in Bangkok instead of a Bentley in your garage wherever, have at it. At worst, you are investing into the top of a massive real estate bubble that will evaporate your investment for many years to come. Again, hardly a matter when we are talking about the loose change from your sock drawer.

Trying to time any market is difficult, even for the experts. I think I read once in Motley Fool where all the mutual funds managed by the best and brightest were only able to beat index funds about 10% of the time, and then not consistently. Their opinion, and I agree with it, is to not try and guess timing, particularly in markets that we are not expert, are obscure and opaque in their operation, which property is in Thailand. Now is as good as time as any to throw your money away on a consumable that you never expect a return on and have no reason to want to recoup other than fortunate happenstance.

Best of luck.

[thaigene2]

Trying to time any market is difficult, even for the experts. I think I read once in Motley Fool where all the mutual funds managed by the best and brightest were only able to beat index funds about 10% of the time, and then not consistently.

Yes - sorry for a slight off-topic, but I also heard that many of these guys bet the opposite of the market at open-to-close. So the market closes today at 11,212. They bet at opening tomorrow it will close say 1.5% up (they 'future' the market up). And vice versa if today's close goes up they short tomorrow's close. Statistically, they should be 50-50 - and thus losing on the brokers fees, correct? But if many, many other 'day traders - and so-called seasoned traders are doing the same no-brainer, then the odds are actually in their favour - it's a self-fulfilling prophecy - they force the market up or down by enough margin to make a profit. A classic house of cards. Go back and look at daily trends to see what I mean.

[zorro1]

You ask a tough question that has a lot of possible answers depending on your situation.

Here are the facts.

First rule of Thailand, NEVER INVEST MORE THAN YOU CAN WALK AWAY FROM

I think you fit that rule, you seem to be talking about chump change out of your budget. If this is indeed the case then you need to consider the following.

The rent/purchase ratio and per capita income is way out of whack. At best, its a lousy investment and there are many better things to do with your money than waste it on property in Thailand. However, disposable income is not subject to investment requirements. Driving a Bentley instead of an Accord is a perfect example. So if its disposable money and you feel better owning a condo in Bangkok instead of a Bentley in your garage wherever, have at it. At worst, you are investing into the top of a massive real estate bubble that will evaporate your investment for many years to come. Again, hardly a matter when we are talking about the loose change from your sock drawer.

Trying to time any market is difficult, even for the experts. I think I read once in Motley Fool where all the mutual funds managed by the best and brightest were only able to beat index funds about 10% of the time, and then not consistently. Their opinion, and I agree with it, is to not try and guess timing, particularly in markets that we are not expert, are obscure and opaque in their operation, which property is in Thailand. Now is as good as time as any to throw your money away on a consumable that you never expect a return on and have no reason to want to recoup other than fortunate happenstance.

Best of luck.

Good Lord you lost me at the "you never walk away from blah blah" cliche standard in ever property thread on TV , like it doesn't apply every else in the world. You would be a popular guy on the property forums in USA and OZ I don't care if I never sell it. Actually that's what I said, its my mothers wish to have her own place here.

Edit. You haven't really given a reason why not to buy, apart from the standard bursting bubble routine that's in nearly every thread since TV started. Eventually you will be correct

Edited August 24, 2008 by zorro1

[xbusman]

You are correct, nowhere in the above post did I say not to buy. That decision is up to each persons situation and desires.

What I did say was if you fit the profile, and you seem to, don't try to time the market. Just buy when you find the right thing.

If my response got you confused and you had trouble understanding what was being said, be sure to get professional advice from a lawyer before buying property in Thailand.

Best of luck.

Edited August 25, 2008 by xbusman

[zorro1]

Fair comment. After re re reading your post it comes across as having a bet each way and a fair opinion from you. I kind of skimmed it after the don't invest more than walk away bit. Thanks for you response, cheers

[BEENTHEREDONETHAT]

If you find one you really like and the price seems reasonable, go for it. You are not looking for an investment but a lifestyle. The down side is it may take longer to recover your money if the timing is wrong. Trying to pick the highs and lows is in my mind is nearly impossible. Buy your mother a condo and enjoy life, eventually you will get your money back in saved rent.

Good luck and enjoy.

[glyph]

"Really? Are you a real estate agent by any chance? "

Nope. I bought a condo 4 years ago, without reading the comments of horror in ThaiVisa. Since then, my condo has appreciated considerably, and I'm very happy with my decision. BingoKoko, and others, have claimed that the weak baht would destroy the Thai real estate market. Then, the oversupply of condos would destoy the Thai real estate market. Then, the strong baht would destroy the Thai real estate market. Then, the coup would destroy the Thai real estate market. Then, the 30% witholding would destroy the Thai real estate market. Then, the US real estate market would destroy the Thai real estate market. Then, the US bank situation would destroy the Thai real estate market. Then the falling bourses around the wrold would destoy the Thai real estate market. Every prediction that bingokoko and others naysayers have been wrong.

Actually, the naysayers have missed the boat, and they are upset that someone might be making money. Regardless, the Thai real estate market will be OK with them, or without them.

[zorro1]

"Really? Are you a real estate agent by any chance? "

Nope. I bought a condo 4 years ago, without reading the comments of horror in ThaiVisa. Since then, my condo has appreciated considerably, and I'm very happy with my decision. BingoKoko, and others, have claimed that the weak baht would destroy the Thai real estate market. Then, the oversupply of condos would destoy the Thai real estate market. Then, the strong baht would destroy the Thai real estate market. Then, the coup would destroy the Thai real estate market. Then, the 30% witholding would destroy the Thai real estate market. Then, the US real estate market would destroy the Thai real estate market. Then, the US bank situation would destroy the Thai real estate market. Then the falling bourses around the wrold would destoy the Thai real estate market. Every prediction that bingokoko and others naysayers have been wrong.

Actually, the naysayers have missed the boat, and they are upset that someone might be making money. Regardless, the Thai real estate market will be OK with them, or without them.

That is well put and very witty I must say. You forgot mud slides and earthquakes! Hope you dont mind if I cut n paste this as my standard reply to "don't invest more than you can blah blah" Eventually though one of the above will happen (sometime within the next century) and Bingo a go go will be pounding his chest here for years

Edited August 25, 2008 by zorro1

[BEENTHEREDONETHAT]

"Really? Are you a real estate agent by any chance? "

Nope. I bought a condo 4 years ago, without reading the comments of horror in ThaiVisa. Since then, my condo has appreciated considerably, and I'm very happy with my decision. BingoKoko, and others, have claimed that the weak baht would destroy the Thai real estate market. Then, the oversupply of condos would destoy the Thai real estate market. Then, the strong baht would destroy the Thai real estate market. Then, the coup would destroy the Thai real estate market. Then, the 30% witholding would destroy the Thai real estate market. Then, the US real estate market would destroy the Thai real estate market. Then, the US bank situation would destroy the Thai real estate market. Then the falling bourses around the wrold would destoy the Thai real estate market. Every prediction that bingokoko and others naysayers have been wrong.

Actually, the naysayers have missed the boat, and they are upset that someone might be making money. Regardless, the Thai real estate market will be OK with them, or without them.

Good response Glypn it says it all.

[sweetchariot]

"Really? Are you a real estate agent by any chance? "

Nope. I bought a condo 4 years ago, without reading the comments of horror in ThaiVisa. Since then, my condo has appreciated considerably, and I'm very happy with my decision. BingoKoko, and others, have claimed that the weak baht would destroy the Thai real estate market. Then, the oversupply of condos would destoy the Thai real estate market. Then, the strong baht would destroy the Thai real estate market. Then, the coup would destroy the Thai real estate market. Then, the 30% witholding would destroy the Thai real estate market. Then, the US real estate market would destroy the Thai real estate market. Then, the US bank situation would destroy the Thai real estate market. Then the falling bourses around the wrold would destoy the Thai real estate market. Every prediction that bingokoko and others naysayers have been wrong.

Actually, the naysayers have missed the boat, and they are upset that someone might be making money. Regardless, the Thai real estate market will be OK with them, or without them.

I understand where you are coming from, but you have to realise that we are facing a global recession the likes of which have not been seen for nearly 40 years.

I too have done well in the market over the last 4 years, but have recently liquidated all my assets as I can see what is coming. These were investment properties, not 'lifestyle' properties, and I agree with the previous posts that this should not affect the OP's decision to buy.

Zorro, if you are buying off plan, then make sure the developers have signed up to the new escrow laws, even the big developers are going under at the moment.

[zorro1]

Thanks Sweet chariot, where can I get a copy of the new escrow?

[sweetchariot]

Thanks Sweet chariot, where can I get a copy of the new escrow?

This is a cut and paste from a previous thread where I first learned about it. Don't have an official source I'm afraid, but google 'escrow thailand' and I'm sure you will find it. Sadly it's not compulsory yet, and it sounds like only a few (if any) will sign up to it any time soon - but still a good bargaining chip.

Escrow Business Law

24 March 2008 | The new escrow business law was enacted by Parliament on 21 December 2007 and comes into effect on 19 May 2008. The law is intended to protect buyers and sellers of real estate from possible fraud and deceit through the services of a neutral third party who holds funds, property, or legal documents for disbursement once certain conditions are met as instructed by the buyer and seller. An escrow service provider can provide services in the areas of reciprocal contract, contracts for purchase of homes, condominiums, and land. In property purchases, the escrow service provider is responsible for overseeing that payments for purchase of property are made according to schedule and as specified by the conditions under the escrow contract. In the event of breach of contract, such as the seller cannot complete the project as stated in the contract, the funds held by the escrow service provider will not be disbursed to the seller and can be returned to the buyer.

It is not mandatory under Thai laws to enlist the services of an escrow service provider. If the buyer and seller wish to avail themselves of an escrow arrangement, a contract with the buyer, seller, and escrow service provider as signatories will be needed in addition to the contract between buyer and seller.

The details are as follows:

1. The escrow service provider must be a financial institution, a commercial bank, or a financial company.

2. The escrow service provider must have received authorization to provide escrow services from the Ministry of Finance.

3. The escrow contract must be signed by the buyer, seller, and the escrow service provider.

4. The escrow service provider must be a neutral third party and have no connections to buyer or seller either directly or indirectly.

5. The escrow service provider must open a bank account for the parties to the contract with a financial institution.

6. The property, funds, or legal documents held in trust by the escrow service provider must be kept separate from the escrow service provider's personal assets.

7. For escrow property agreements, the escrow service provider must inform the Land Department that the property comes under the escrow agreement and that transfer of ownership is not permitted until the escrow service provider provides the department with a written notice authorizing transfer of ownership. The department's official must make a written record to that effect.

8. In the event of disagreement between buyer and seller, the escrow service provider must not transfer funds or property to either party until the parties come to an agreement or under order of the court.

9. Once the funds have been transferred from the escrow service provider's account to that of the rightful owner and the escrow agreement comes to an end, the escrow service provider must close the escrow bank account and inform the parties immediately."

Edited August 25, 2008 by sweetchariot

[zorro1]

Thanks for that. I wasn't aware, will research more into this now. Thanks again

[trajan]

It is not mandatory under Thai laws to enlist the services of an escrow service provider.

as its completely voluntary, I would be interested to know which developers (if any) actually eventually set up escrow accounts....I understand they need to immediately use the cash from buyers .....

[alantheembalmer]

Buying property truly is a strange beast. How many of us have decided to buy a property when we have only stepped one foot over the threshold, (I know I have)? It is probably the biggest single purchase, I hesitate to use the word "investment", we will ever make in our lives, but in many, if not most, cases we make the decision with our heart and not our heads. In itself this is not necessarily a bad thing, as we want somewhere where we feel comfortable, relaxed and "at home", not somewhere where the potential market viability can be calculated by an actuary. I have always purchased property on "feeling" and I have made a cosiderable sum out of doing so, (as long as the place has been structurally sound). I could, of course, boast that this has been down to my business acumen, but in reality it is more to do with the fact that if I like a place because of its overall ambiance, then many other people will too when I decide to sell. Buying a property is always risky if your one and only concern is a return on your investment, and this is compounded by the two variables of the baht exchange rate, and the direction that the property market will take. If anyone tells you they know how these two variables will interact and perform in the future is either deluding you or themselves, but most likely both of you.