Good Time To Buy?

[teddy_bare]

I am trying to get my head around the global crisis and what impact it is having on Thailand. Western and some Asian currencies seem to be dropping from past levels, but the Baht looks strong. I haven't seen any obvious signs in Thailand, although my friends often comment of the rising prices and static salaries. I dont know if they are just repeating what they read or if they are experiencing it. I haven't noticed any falls in the property prices, although I have seen a lot of new rentals on the market (people trying to pay their mortages??). I understand the often seen Supply and Demand Asian logic. But surely if people start to lose their houses, they or the banks will sell for whatever.

I am in the market to buy a business or property in Thailand, but still unsure if the time is now, or to leave it a while.

What are your observations?

[tominchaam]

To buy a house in Thailand means to me a cost – not an investment. Condominiums can be investments provided you are well aware of the local conditions here.

[ray08]

I am trying to get my head around the global crisis and what impact it is having on Thailand. Western and some Asian currencies seem to be dropping from past levels, but the Baht looks strong. I haven't seen any obvious signs in Thailand, although my friends often comment of the rising prices and static salaries. I dont know if they are just repeating what they read or if they are experiencing it. I haven't noticed any falls in the property prices, although I have seen a lot of new rentals on the market (people trying to pay their mortages??). I understand the often seen Supply and Demand Asian logic. But surely if people start to lose their houses, they or the banks will sell for whatever.

I am in the market to buy a business or property in Thailand, but still unsure if the time is now, or to leave it a while.

What are your observations?

What i think you should be looking at ,is the volume of sales ,not asking prices of properties ,you might see that the market has very few real sales these days ,

[UncleFrank]

Thousands and thousands of properties to look at, that's for sure.

If you need a place to live for the next 10 years, then, it might be a good idea to buy a place.

[think_too_mut]

I understand the often seen Supply and Demand Asian logic. But surely if people start to lose their houses, they or the banks will sell for whatever.

That could be exacly what you don't understand.

Most Thais buy cash, no pressure to sell. If they are not speculators, they would know how far they can stretch for their own place.

You may find an odd foreigner who has to sell for whatever reasons, possibly more of them in trouble now than 1 year ago.

But it's not a pattern to count on.

Edited January 18, 2009 by think_too_mut

[PattayaParent]

Prices remaining the same in Baht but you have to pay more in foregin currency terms due to the exchange rate.

NOt a good time for buying unless you need a place to live and have found the perfect place to buy, otherwise rent.

[YagerTool]

What is an average price? So the price hasnt changed (in baht) lately?

[siddv]

Wait for the pension funds to go belly up this year. When investors have to start eating into principle to survive. Start looking now and when things get really ugly by the end of this year (09) good deals might be had. Thai RE market, like many others, remain in a state of denial..impervious to world economic melt down. Be patient and you will be rewarded.

[sorensen]

Wait for the pension funds to go belly up this year. When investors have to start eating into principle to survive. Start looking now and when things get really ugly by the end of this year (09) good deals might be had. Thai RE market, like many others, remain in a state of denial..impervious to world economic melt down. Be patient and you will be rewarded.

Agree, start looking now, get a good feeling for a few buildings and note down the size and price you are interesded in. Then do the same 6, 12, 18 months from now. My advise, wait 1-3 years.

[MJo]

I understand the often seen Supply and Demand Asian logic. But surely if people start to lose their houses, they or the banks will sell for whatever.

That could be exacly what you don't understand.

Most Thais buy cash, no pressure to sell. If they are not speculators, they would know how far they can stretch for their own place.

You may find an odd foreigner who has to sell for whatever reasons, possibly more of them in trouble now than 1 year ago.

But it's not a pattern to count on.

Thais buy cash if they can but not most of them have it enough IMHO. I would say most Thais finance their houses, condos and cars. Most of them even finance their whole life with credit cards even if they do not need to. Only few lucky ones that have family money or work overseas with good income buy cash and are small minority of the population.

SCB is claimed to be biggest in mortgages. Their gross loans have gone up from 512B in 2003 to 916B in 2008. Maybe not all of these are mortgages but gives some idea of the trend in past few years. Also all banks still expect mortgage market to grow in 2009 although at slow rate.

http://www.scb.co.th/img/en/abt/doc/annual...1_Financial.pdf

http://www.scb.co.th/img/th/nws/doc/PressR...08-final_V5.pdf

http://www.bangkokpost.com/business/econom...argets-for-2009

Could not find exact figures how much the biggest banks have mortgages and % of NPL's for those. If someone knows a good source please do post a link.

Once mid / upper mid class thais are starting to lose their jobs there will be problems in the market. Agree that most Thais who buy with finance are in low end market with 1M to 3M properties but also lot of thais have purchased 5M to 7.5M places with finance in recent years with high hopes to rent them out to foreigners or flip the contract before completion.

I would take it easy and see how badly the market is effected in next year or so.

[hhgz]

"I am trying to get my head around the global crisis and what impact it is having on Thailand...I am in the market to buy a business or property in Thailand, but still unsure if the time is now..."

My advice is that you do not move to Thailand. From your post, I infer that cannot afford to live here, and it has nothing to do with the cost of living. You seem to want a "yes-or-no" decision, and have no tolerance for ambiguity. Accordingly, it seems that there would be an unacceptable emotional toll.

[satiariyan]

I am in the market to buy a business or property in Thailand, but still unsure if the time is now, or to leave it a while.

What are your observations?

Throughout the last 6 months or so I've observed that online sites, where one can advertise for free whatever one may have for sale, have become increasingly clogged with properties for sale which nowadays may constitute 90% of ads. I haven't seen a similar rise in businesses for sale. Actually, being particularly interested in the combination of business and property that shophouses constitute I dare say - these are exceptions to the general trend that owners want to get rid of their real estate. Wonder why. Could it be that a shop, providing down-to-earth goods or services also needed by unemployed, has (at least) the potential of carrying you safely through hard times where countries, pension funds and stockmarkets may go bankrupt?

I don't see why buying a business in Thailand now should be any worse than buing one at any other time in the past or future - just keep in mind that the overall moneyflow is reduced and consumption moves towards necessities at the loss of luxury.

[mommysboy]

Prices look set to tumble for Bangkok Condos at least, and are predicted to fall for real estate in general, but I'm only going by what the Bangkok Post and Nation say.

I'd say wait 1 -2 years for the best price.

Since prices are generally so cheap anyway, you need to work out whether you are going to save that much money given that you may be putting one part of your life on hold.

The issue of buying a business has also been raised- unless it's a certain cash generator and you have a proven track record, don't do it. At the best of times farangs get burnt, there is also a truly massive slump predicted.

[satiariyan]

The issue of buying a business has also been raised- unless it's a certain cash generator and you have a proven track record, don't do it. At the best of times farangs get burnt, there is also a truly massive slump predicted.

Any sources?

[mommysboy]

The issue of buying a business has also been raised- unless it's a certain cash generator and you have a proven track record, don't do it. At the best of times farangs get burnt, there is also a truly massive slump predicted.

Any sources?

What do you mean? The major world economies have already entered a quite devastating slump. Although countries like Thailand missed the first wave, they can not avoid the second wave and this is already evidenced by an alarming slump in Thailand's case, refer to this month's reduction in exports.

The fact that it is not so much evidenced now is more to do with 'time lag' but the Thai economy ground to a halt in October as predicted. Moodys downgraded prospects in december. Since then there has been further evidence of a downturn in exports reported by way of November statistics. Thailand is 70% dependent on exports and up to 10% dependent on tourism. Domestic consumption has been weak for 5 years now and was being propped by a real estate peak which has also dissipated.

It's not so much needing to qualify my own assertions as about you providing eveidence otherwise!

[satiariyan]

The issue of buying a business has also been raised- unless it's a certain cash generator and you have a proven track record, don't do it. At the best of times farangs get burnt, there is also a truly massive slump predicted.

Any sources?

What do you mean? The major world economies have already entered a quite devastating slump. Although countries like Thailand missed the first wave, they can not avoid the second wave and this is already evidenced by an alarming slump in Thailand's case, refer to this month's reduction in exports.

The fact that it is not so much evidenced now is more to do with 'time lag' but the Thai economy ground to a halt in October as predicted. Moodys downgraded prospects in december. Since then there has been further evidence of a downturn in exports reported by way of November statistics. Thailand is 70% dependent on exports and up to 10% dependent on tourism. Domestic consumption has been weak for 5 years now and was being propped by a real estate peak which has also dissipated.

It's not so much needing to qualify my own assertions as about you providing eveidence otherwise!

Believe me, I weren't asking for sources to support that "major world economies have already entered a quite devastating slump" - there already are about a million links to such sources on this board. Maybe you should confine your posts to the numerous threads where ivory tower analyticers are discussing world scale economics?

The opening question in this thread obviously were not about establishing a new multi mega trillion dollar export enterprise in Thailand, but more a question of when one should buy a few handfuls of properties or streetlevel businesses in Thailand that would fit the financial capability of an individual foreigner who's been hooked on some Thai female and now are contemplating how and when to relocate.

My question were about sources about down-to-earth streetlevel SME's in Thailand. Fair enough if you haven't got any source, dealing with matters on such an inferior detail level, at hand.

Edited January 23, 2009 by satiariyan

[mommysboy]

The issue of buying a business has also been raised- unless it's a certain cash generator and you have a proven track record, don't do it. At the best of times farangs get burnt, there is also a truly massive slump predicted.

Any sources?

What do you mean? The major world economies have already entered a quite devastating slump. Although countries like Thailand missed the first wave, they can not avoid the second wave and this is already evidenced by an alarming slump in Thailand's case, refer to this month's reduction in exports.

The fact that it is not so much evidenced now is more to do with 'time lag' but the Thai economy ground to a halt in October as predicted. Moodys downgraded prospects in december. Since then there has been further evidence of a downturn in exports reported by way of November statistics. Thailand is 70% dependent on exports and up to 10% dependent on tourism. Domestic consumption has been weak for 5 years now and was being propped by a real estate peak which has also dissipated.

It's not so much needing to qualify my own assertions as about you providing eveidence otherwise!

Believe me, I weren't asking for sources to support that "major world economies have already entered a quite devastating slump" - there already are about a million links to such sources on this board. Maybe you should confine your posts to the numerous threads where ivory tower analyticers are discussing world scale economics?

The opening question in this thread obviously were not about establishing a new multi mega trillion dollar export enterprise in Thailand, but more a question of when one should buy a few handfuls of properties or streetlevel businesses in Thailand that would fit the financial capability of an individual foreigner who's been hooked on some Thai female and now are contemplating how and when to relocate.

My question were about sources about down-to-earth streetlevel SME's in Thailand. Fair enough if you haven't got any source, dealing with matters on such an inferior detail level, at hand.

Well, my initial comment was a small addition to a posting that mainly dealt with buying property in Thailand, and to reiterate it's most likely prices will drop, anecdotally, I was sitting with my lawyer this week and he read out a newspaper story about 1 in 5 depositors in Condo projects failing to go through with the deals.

Regarding what I see as a massive economic slump, I guess I'm in no good position to justify this comment, but do not believe this is more than idle speculation, rather it's a case of the other way round as the papers have been full of bad news of late, how do you argue the notion that Thailand won't go the same route as USA for instance, on whom it is majorly dependent for custom? Are you saying the loss will be compensated by tourism? or by domestic consumption?

I run a small export business from Thailand which is doing rather badly. True, I may be in a more fragile position than the local plumber, but then the average farang is more likely to be doing similar rather than plumbing, driving a tuk tuk, etc.

The point is I have stopped buying locally, so now someone very much in the Thai economy loses custom, as does someone down the line- I believe it's called the multiplier effect. Now if you go Pratunam you will see many stall holders in a bad position, plus numerous shops recently vacated, and sadly a number of stall holders that were par of the fixtures and fitiings have closed, just hurredly replaced by fly by night operations.

I am pretty sure Thailand is going to get a full on recession. The previous recession was big enough but it came at a time when the west was quite flush. Farang investment was soon secured, and of course the drop in the bt was a massive incentive for even more tourists to splash their money around. These conditions no longer apply.

[satiariyan]

Well, my initial comment was a ....

Thanks for a sensible reply. I surely do not know what will happen to a Thai soil based micro-business like mine, but prefer to keep a positive spirit as long as KNOWN facts do allow it.

Edited January 24, 2009 by satiariyan

[laluji]

The wise people say "what goes up ,comes down"

In the last three years real estate has not gone up in Thailand so how it will come down.?

The places where the so called recce-sion has arrived or the things came down are those places where it had gone up .