Capital Faces Oversupply Of Condo Units

[bingobongo]

for all the bagholders and deluded, i hope this helps........

If you fail to transcend conventional thinking at a time when conventional thinking is losing touch with reality, then you will be more likely to fall prey to an epidemic of disorientation that lies ahead. Disorientation breeds mistakes that could threaten your business, your investments and your way of life."-- James Dale Davidson and Lord William Rees-Mogg, The Sovereign Individual, 1997

[bingobongo]

i wonder if this will be added to the slick marketing brochures.........LMAO

Thailand on 'most dangerous' list for travellers

Thailand has made the list of the Top 20 Most Dangerous Places as compiled by the Telegraph newspaper of London.

The latest edition of the list puts Thailand as the seventh most-dangerous spot for travellers behind Iraq, Afghanistan, Chechnya, South Africa, Somalia and Sudan. Thailand is said to be more dangerous than Colombia and Haiti at the moment.

It justifies the Thai spot on the list because of "major political demonstrations and a temporary state of emergency" at the two Bangkok airports.

It also cites the continuing demonstrations around Government House, the Cambodian-Thai fighting on the bordefr, and "civil unrest and frequent attacks" in the deep South.

The British "Foreign Office advises against all but essential travel to these areas," the newspaper said.

http://www.bangkokpost.com/breaking_news/b...s.php?id=132361

[think_too_mut]

i wonder if this will be added to the slick marketing brochures.........LMAO

Thailand on 'most dangerous' list for travellers

Thailand has made the list of the Top 20 Most Dangerous Places as compiled by the Telegraph newspaper of London.

The latest edition of the list puts Thailand as the seventh most-dangerous spot for travellers behind Iraq, Afghanistan, Chechnya, South Africa, Somalia and Sudan. Thailand is said to be more dangerous than Colombia and Haiti at the moment.

It justifies the Thai spot on the list because of "major political demonstrations and a temporary state of emergency" at the two Bangkok airports.

It also cites the continuing demonstrations around Government House, the Cambodian-Thai fighting on the bordefr, and "civil unrest and frequent attacks" in the deep South.

The British "Foreign Office advises against all but essential travel to these areas," the newspaper said.

http://www.bangkokpost.com/breaking_news/b...s.php?id=132361

Bingobongo, you may have enraged the "investors"in BKK, they may become even more adamant to admit their "investment" is in a place like Mogadishu or Mumbai.

Expect more flames as they continue refuse to face the reality.

Just wondering what those rejects from Spain's (who landed in Temisoara and Bangkok) real estate "professionals" are about to put up as their new sales pitch.

[bingobongo]

i wonder if this will be added to the slick marketing brochures.........LMAO

Thailand on 'most dangerous' list for travellers

Thailand has made the list of the Top 20 Most Dangerous Places as compiled by the Telegraph newspaper of London.

The latest edition of the list puts Thailand as the seventh most-dangerous spot for travellers behind Iraq, Afghanistan, Chechnya, South Africa, Somalia and Sudan. Thailand is said to be more dangerous than Colombia and Haiti at the moment.

It justifies the Thai spot on the list because of "major political demonstrations and a temporary state of emergency" at the two Bangkok airports.

It also cites the continuing demonstrations around Government House, the Cambodian-Thai fighting on the bordefr, and "civil unrest and frequent attacks" in the deep South.

The British "Foreign Office advises against all but essential travel to these areas," the newspaper said.

http://www.bangkokpost.com/breaking_news/b...s.php?id=132361

Bingobongo, you may have enraged the "investors"in BKK, they may become even more adamant to admit their "investment" is in a place like Mogadishu or Mumbai.

Expect more flames as they continue refuse to face the reality.

Just wondering what those rejects from Spain's (who landed in Temisoara and Bangkok) real estate "professionals" are about to put up as their new sales pitch.

TTM, the only correction i have regarding your post is that at least Mogadishu and Mumbai have functioning airports, so they maybe considered "upmarket" as compared to Bangkok

but you are right, like a child who can not accept that Santa Claus does not exist, the bagholders are in deep denial

[glyph]

Gosh, fellas - bingokoko, midas, busybee, and the quacking ducks at thaicrisis...

With all of the problems, it is remarkable that real estate prices haven't collapsed.

Maybe your hopes and dreams will come true in 2009.

[bingobongo]

come on glyph or whatever moniker you choose to use

do not hate the player, hate the game.........and your inability to play it

by the way, given the airport(s) is closed for the forseebale future, and the folks in red are gathering, how will that be spun in the glossy brochures?

i am sure you must have a lovely view (or soon will) of the unrest that is about to unfold from your balcony, just make sure to duck for cover (quack quack)

Edited December 1, 2008 by bingobongo

[midas]

Gosh, fellas - bingokoko, midas, busybee, and the quacking ducks at thaicrisis...

With all of the problems, it is remarkable that real estate prices haven't collapsed.

Maybe your hopes and dreams will come true in 2009.

well glyph a well thought out and thoroughly informative post like this one you have written

just shows how you have run out of things to say about the property market !

But I can understand this because it's hard to paper over the cracks now isn't it?

[bingobongo]

cash is now king, condos (even if the airport was open) are not

Edited December 1, 2008 by bingobongo

[bendix]

Hey, cool . . thaivisa's favourite one trick pony is back.

[Scott123]

Correct, but it has worked for me for a number of years now, and continues to do so thankyou very much!!

Just look at how much free advertising you get on this site....every time somebody posts saying they want to BUY a house or condo, hundreds of posters come out saying RENT RENT RENT!!! Magic!!!!...

success in the past does not gaurantee future gain.

Your rental property gives you good income because your cost was based on the value from a fews years back and you can afford lowering or not raising the rent just to keep the property occupied.

Again, my point is your success was based on many factors that may or may not hold true now or in the future.

Many posters here are concerned about what is happening to the property market NOW, and its future trend, not what it has been. We all know the property market has been a good investment in Thailand in the past 10 years or so, just like in many other parts of the world.

If you are brave, why don't you go out and buy a 10 million baht condo NOW, and tell us how optimistic you are?

[bingobongo]

so China has a functioning airport(s), a functioning government, a stronger economy and is feeling the pain in real estate

whereas LOS has none of the above and will be immune? what ever hallucinogens the bahholders are taking, i suggest you either up the dosage or quit cold turkey

China Property Slump Threatens Global Economy as Growth Slows

House prices in Shanghai, Shenzhen and Guangzhou are plunging, and the global economy may grind almost to a halt next year because of it.

"The real estate sector has seen a particularly pronounced slowdown," said a senior economist at the World Bank in Beijing. "Real estate investment growth is now close to zero."

http://www.bloomberg.com/apps/news?pid=206...p;refer=economy

Edited December 2, 2008 by bingobongo

[quiksilva]

The industry sentiment is at an all time low, and this is true throughout the world.

I maintain that the fallout from the global economic crisis would have been manageable in Thailand but thanks to the self made political problems the Kingdom has suffered immeasurable damage, and we are likely facing a downturn in the residential sector comparable to 1997, if not worse.

Thailand's tourism markets have been absolutely decimated, I was at the Four Seasons Hotel on Rajadamri Road, last night who reported occupancies of 10-12%. I hear rumours of Conrad facing occupancies of 30%, but this is purely because a large portion of their guests simply can not leave the country.

The impact this will have on the residential markets can not be overstated. Having said that there is still activity in the sub 10m baht per unit sector, but almost exclusively to Thais.

[glyph]

"thaivisa's favourite one trick pony is back."

And it's lame. The Shanghai real estate market has been losing value, even before I moved from there in August, 2007. I'm not sure why bingo thinks that "news". The Shanghai real estate market had several years of 30-40% increases, and it was time for the market to cool off. On the other hand, BKK real estate has increased 40% over 5 years, and that's a completely different scenario.

[bingobongo]

glyph, you wouldnt know an asset from your own arse

anyway, not condo specific per se, but I am sure you get the point......or maybe not

Thai protest ends, but not the economy's problems

Top industrial estate developer Amata Corp AMAT.BK said this week it had cut its 2008 land sales forecast by 33 percent and would cut land prices next year to try to win back customers.

http://www.reuters.com/article/rbssFinanci...lBrandChannel=0

[andyc2006]

well, reality finally meets fantasy..........

credit crunch - check

oversupply - check

gvt on verge of collapse - check

local economy disintegrating - check

BANGKOK PROPERTY MARKET

Capital faces oversupply of condo units

Falling demand leaves developers with a large inventory of unsold units

http://www.nationmultimedia.com/2008/10/31...ss_30087290.php

Bongo Im still managing to let with ease my condos (4) just taken on a new client for 1 year priced at 14000baht per month. Advertised for 2 days now full again although did have a guy pay a deposit and never turn up?? Oh well w e kept the deposit and then re advertised 2 days later full.

I'll let you know when it changes.

I think the price range is the decider.

wow 14000baht/35 = $400 *4 properties = $1600 per month? you really are a high roller.........NOT, when you get to 6 figures in $ (not baht) i'll be impressed

your renters are smarter than you, why tie up the money in a capital trap when they can deploy the dough more effeciently some where else (such as the yen, shorting the global bourses etc) and be LIQUID and remain mobile

I would say collecting a rent whilst retaining the assets was pretty smart??

You would say that without knowing the ratio of the rent to the purchase price of the assets or likely appreciation???

hint: If he bought the condos for 140 baht and rented them for 14000 baht/month, he's a genius. If he bought the condos for 14,000,000,000 baht and rented them for 14000 baht/month, he's a complete f* idiot.

Sometimes renting is a better deal than owning. Sometimes not. You need to do the math and also consider quality of life too.

Being a landlord is an entirely different equation (than determining whether to rent or own the home in which you live). It's all about ROI.

Regardless, it's insane to assume that buying a property and then renting it out is a winning financial move, without first determining the ROI. Maybe you're right, but you don't have the information necessary to do more than guess.

[andyc2006]

I work in Real Estate in Spain and the offers are so lame to the point of being insulting.

I think this is not the time to buy anyplace (with a few small exceptions) regardless of how cheap properties seem. Wait until 2009 to 2010... that's when the bottom will fall out, at least in Spain.

Well, if you're right about this (I think that you are), then the offers aren't so insulting. Maybe 2 years from now, home sellers will regret not taking the "insulting" lowball offers from 2008...

[andyc2006]

I understand the situation today. What I am asking about is when will there be a bottom - a golden opportunity to buy in the future. Surely with all this talk of a Thai market crisis there will come a time when the crisis is over and prices will increase many times over once again.

Here in the US, the NAR (National Association of Realtors) calls a bottom on a daily basis (at some point, they're going to be right!). In the stock market, on every down day, CNBC brings out a new talking head who'll call a bottom & generational buying opportunity.

And when markets are booming, you never need to look far to find a bear calling a top.

Are you really asking about the bottom?

If you buy at the bottom, you're nothing but lucky. Nobody can time the market well enough to tell you when you should buy.

Since people will constantly call bottoms, in retrospect, some will prove to be correct. By luck (if it weren't luck, they'd be able to call all the bottoms, and tops, and you won't find many of those people around, and if you do, they won't be giving free advice on Thai visa).

That said, I'll tell you the answer. The (US) real estate market will bottom some time between 2010 and 2015. You can quote me on that.

[fanselah]

bingobongo,

Your posts are very funny, and remind me of a scene in "The Shipping News". A veteran newspaper reporter is mentoring Kevin Spacey on how to write a compelling headline...

VR: Look at the sky. What do you see?

KS: Clouds.

VR: No, not clouds, but a "killer storm".

KS: It's not a "killer storm".

VR: It doesn't matter. Your headling should read "Killer Storm Headed Towards Island".

KS: What if there isn't a storm?

VR: It doesn't matter. Your headline should read "Killer Storm Misses Island".

After several years of killer storm warnings from you and thaicrisis.com, it's time to take down the hurricane flags. Perhaps you should let your partner play with your semaphores for a while.

After reading this thread, it's clear that there is no bad weather here, it's just a simple case of t®opical depression.

[think_too_mut]

bingobongo,

Your posts are very funny, and remind me of a scene in "The Shipping News". A veteran newspaper reporter is mentoring Kevin Spacey on how to write a compelling headline...

VR: Look at the sky. What do you see?

KS: Clouds.

VR: No, not clouds, but a "killer storm".

KS: It's not a "killer storm".

VR: It doesn't matter. Your headling should read "Killer Storm Headed Towards Island".

KS: What if there isn't a storm?

VR: It doesn't matter. Your headline should read "Killer Storm Misses Island".

After several years of killer storm warnings from you and thaicrisis.com, it's time to take down the hurricane flags. Perhaps you should let your partner play with your semaphores for a while.

After reading this thread, it's clear that there is no bad weather here, it's just a simple case of t®opical depression.

New incarnation of backflip?

Did they ban you as glyph as well?

No matter what you do, pointless pissing against the wind allways end up on your face.

Adio, I may report you for overfilling my ignore list with your handles.

Edit: a few posts up, yes, they banned your as* again.

Edited December 15, 2008 by think_too_mut

[dotcom]

The "crisis" in the property market hasn't even started yet.

Give it about 6 more months.

[Zolt]

The problem is indeed if and when the "bottom" will come. As for the stock and commodities market, I'm not too worried, even if the bottom is not hit yet, it's close enough that investments now will generate profit in the long term. In the real estate market I think prices haven't even begun to seriously fall. I'm fairly new in Thailand and don't know so well about the situation here - but in other countries like South Korea, real estate is still staying up at over-inflated prices, even through the rest of the economy has gone through the whole crash thing already. There is a considerable lag involved.

In 90's japan, when the whole financial bubble unraveled, land and housing prices took a small hit at first, but reaching an actual bottom and resuming normal cycle from there took over 10 years of very very slow deflation. Then again, the japanese government was still well organized, and throwing everything it had to stop the deflation. Instead they just diluted and delayed it and it took years to get out of that loop.

In Thailand, with the government's inepty - or sometimes even the absence of a government, one can safely venture than it's efforts to support the market will be at the very least half-assed and disorganized. Combine that with the huge oversupply and the credit crunch and we *might* see a sharper drop on the market, but in my opinion, we'll need a lot of 97' style abandoned projects before developer and land sellers take the cue and slash their prices.

[quiksilva]

Land sellers rarely NEED to sell, developers on the other hand...

[kaxper]

In Thailand, with the government's inepty - or sometimes even the absence of a government, one can safely venture than it's efforts to support the market will be at the very least half-assed and disorganized. Combine that with the huge oversupply and the credit crunch and we *might* see a sharper drop on the market, but in my opinion, we'll need a lot of 97' style abandoned projects before developer and land sellers take the cue and slash their prices.

the trigger for a "crisis" is when banks don't lend .. that's what happen in 97 when the baht devalued and corporates went bust, banks had 45% NPL and developers could not get funding to finish projects (good or bad), and buyers could not get mortgages.

we don't have this in thailand and i don't see any "shock" to the system (like a devaluation), short of a massive social unrest (dare i say civil war). what we will have is a much more conservative lending environment to both developers and home-buyers in 2009 which, coupled with a large supply of housing units (i worry more about the ubiquitous Sansiri-AP 40 sqm condo which frankly speaking is pure speculation) will likely see some price correction but not force sales by developers like in 97 when they had to liquidate inventory.

where i think there will be deals are foreign bought condos .. there is a now shock to the western banking system and foreigners who had thought to get a loan to buy a condo in thailand will likely find their (foreign) banks balking. i would think that with projects that will transfer in 2009 like MET, Emporio, Empire, or those currently transferring like Park Chidlom, Athenee, Infinity, your best deal is probably at "cost".

[bingobongo]

come on bagholders (aka homedebtors), dont cast dispersions at me becasue you cant manage your way out of a paper bag let alone your finances, come on bendix i know you have the urge to pontificate, too bad it has no value

so lets see:

oversupply - check

baht too stong - check

tourism down - check

exports down -check

SET 50% off -check

todays lesson is again the word CAPITAL TRAP: a misallocation of resources in a decling market

Property market could shrivel 10-20 per cent next year

Preuksa Real Estate president and CEO Thongma Vijitpongpun said the developer estimates that demand in greater Bangkok will drop 20 per cent from 56,000 units this year to 40,000 units next year.

Meanwhile, office space is moving towards oversupply with nearly 600,000 square meters of new office space to be completed next year, including 400,000 square meters for the new Government Centre office.

http://www.nationmultimedia.com/2008/12/17...ss_30091183.php

[bendix]

I've got no desire nor need to pontificate, bingobongo, unlike yourself with your unground axe.

I have bought a small condo here as a base. My wife will live in it while I'm working overseas and then it will be rented out (already had offers which would mean a 7-8% ROI). If prices fall over the next few years, no problem. In fact, perfect. I have no desire to sell it. In fact, I'd welcome lower prices because I will be buying a retirement house in 4 years, and lower prices would be ideal. I'll still need my Bangkok drop pad.

What's the problem?

Meanwhile, a well-paying job in the UK to fill up my pension pot, a very tidy wedge in various 6-7-8% tax-free fixed term deposits in various countries to keep me cashed up until it's time to return to equities and bonds and, well, I'm alright jack.

Couldnt be better in fact :-)

I've done my sums and even with a 40% decline in value in that condo, my net worth will have increased 20million in four years, best conservative guess.

[think_too_mut]

Meanwhile, a well-paying job in the UK to fill up my pension pot, a very tidy wedge in various 6-7-8% tax-free fixed term deposits in various countries to keep me cashed up until it's time to return to equities and bonds and, well, I'm alright jack.

I've done my sums and even with a 40% decline in value in that condo, my net worth will have increased 20million in four years, best conservative guess.

What happened with the previous million (dollars) you were bragging about a year ago? Screwed between October 2007 and now?

[yabaaaa]

Meanwhile, a well-paying job in the UK to fill up my pension pot, a very tidy wedge in various 6-7-8% tax-free fixed term deposits in various countries to keep me cashed up until it's time to return to equities and bonds and, well, I'm alright jack.

I've done my sums and even with a 40% decline in value in that condo, my net worth will have increased 20million in four years, best conservative guess.

What happened with the previous million (dollars) you were bragging about a year ago? Screwed between October 2007 and now?

Perhaps he's buying a "2" millon dollar yacht? And good luck to him I say!!

[midas]

Weakness seen in Bangkok luxe condo market

Dec 12, 2008 - The Business Times

Greg Lowe

THE luxury condominium market will dive next year as the global economic downturn continues to dry up the much-needed pool of cash-rich foreign investors, local property analysts said.

They predict that luxury condominium prices would drop by 10-20 per cent in the first half of 2009. Current high prices will stifle local demand, as the domestic political turmoil undermines investor sentiment, they said.

Despite Bangkok's luxury condominiums being relatively cheap - at around 100,000-150,000 baht (S$4,300-6,500) per square metre (psm), 8-12 times less than a similar property in Singapore or Hong Kong, according to Jones Lang LaSalle Research - demand has dropped off, analysts said.

'Luxury condos depend on foreign buyers. With the global downturn, there are no buyers left,' said Thaninee Satirareungchai, property analyst, KGI Securities (Thailand).

'The price of the physical property should be corrected down by at least 15-20 per cent next year.'

UOB Kay Hian (Thailand) expects sector prices to drop by 10-15 per cent to stimulate demand from Thai buyers, who tend to opt for luxury single-detached houses rather than condominiums.

Thai law prevents foreigners from buying land, but they are allowed to purchase up to 49 per cent of the saleable space in a condominium, hence the sector's dependence on overseas investors.

A fall will provide investment opportunities for bargain hunters, said Veena Naidu, head of research, UOB Kay Hian (Thailand).

Projects that were launched 18-24 months ago are being completed and coming onto the market now, so investors still have time to survey the market.'

CB Richard Ellis (Thailand), a leading realtor, said the decreasing pool of foreign investors and are likely to lower their prices, said James Pitchon, executive director, CB Richard Ellis (Thailand).

'Some luxury projects increased their notional prices after units at the Sukhothai Residences sold at an average of more than 200,000 baht psm. But a number of those developers were not able to sell at the recalibrated prices.

'We expect a return to the pre-Sukhothai prices, where developers that upwardly adjusted their prices revert to what they were six months ago.'

The biggest factors in Bangkok's surging luxury property prices were rising land and commodity costs, he said. While the price of crude has dropped, said Mr Pitchon, the value of Bangkok's CBD land was not contracting, adding that plunging commodity prices were unlikely to affect the sector in the next two years.

'Commodity prices have fallen, so in theory new construction costs will also fall. There will be very few, if any, new projects launched in the next 24 months, so we are not going to have competing products with the new lower construction costs.'

[pkrv]

The above article gave me a headache. It brought a new twist to the term balanced reporting - It appeared to say one thing, then at the end, completely contradicted itself.

[bingobongo]

come on bendix, is that the best you have? i'm not impressed, i called the SET bust and the housing weakness for more than 2 years, come back when your acumen is as good as your pontificating (which are obviously not correlated except to your own ego)

glyph (aka whatever you call yourself), you are an amusing little fellow, but your frustration in your posts is quite entertaining

anyway, like a bargirls looks over 25, equity is fading............

Home prices widely expected to fall in 2009

Moreover, property developers can be expected to boost their sales next year by reducing prices, after they see falling sales in the final quarฌter of 2008. As a result of all these facฌtors Supalai expects lower residential prices in 2009, Prateep said

According to the Real Estate Information Centre (REIC), new houses registered around the country in the third quarter of this year numbered only 113 projects or 17,000 units - a drop of 25 per cent and 13 per cent respectively from the third quarter of 2007. Of these, 82 projects with a total of 14,000 new homes were registered in Bangkok and its suburbs - a drop of 9 per cent in terms of projects and 1 per cent in terms of units over the corresponding period of last year.

Meanwhile, 284 projects with 42,000 new homes were registered a round the country in the first nine months of 2008 - falling by 25 per cent and 11 per cent respectively from the first nine months of last year.

http://www.nationmultimedia.com/2008/12/17...ss_30091142.php

Edited December 17, 2008 by bingobongo