Cbd Condo Prices Indestructable?

[dave9988]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

[363885]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

[pkrv]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

Not CBD.

[thaihome]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

Not CBD.

Isn't the Met the one on Sathorn Road next to the Singapore Embassy? Are you saying that is not the CBD? Gee, with all those bank HQ's right there I always sorta thought that was the real CBD as opposed to toruist ghetto on Sukhumvit.

TH

[cclub75]

You see... Le Raffine was supposed to be the alpha and the omega of the luxury condo market in central bangkok, blablabla.

It was supposed to be a bunker against any price drop, economic downturn, or whatever else.

It was the Light House of Serenity and Eternal Growth Because Bangkok Is So Different (LHSEGBBISD copyright myself).

Well... Le Raffine is nothing else than a building. And a building amid a full blown crisis.

The luxury condominium developer Le Raffine' 1989 Co Ltd plans to reduce the latest prices of condominium units at its Soi Sukhumvit 39 site by 15-20% and sell the remaining units at Soi Sukhumvit 31 that it adit kept for renting out.

Dr Pimpa Vajrabukka, the company's owner and managing director, said prices at Le Raffine' Jambu Dvipa on Soi Sukhumvit 39 would be cut to 160,000 baht per square metre from 200,000 baht due to an unfavourable market. (Bangkok Post)

http://www.bangkokpost.com/business/econom...-cutting-prices

I don't know why I think about the movie Apocalypse Now, with colonel Kurtz.... "The horror.... the horror"...

Replace with "The suckers...".

Edited February 2, 2009 by cclub75

[hhgz]

The price cut is part of the story..

"Despite an almost 20% decrease in unit prices, the project continues to generate a profit as the prices are well above the launch prices of 90,000 baht a sq m four years ago. The project value will rise from two billion baht to 2.5 billion."

I'm sure that you accidentally forgot to mention that.

[pkrv]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

Not CBD.

Isn't the Met the one on Sathorn Road next to the Singapore Embassy? Are you saying that is not the CBD? Gee, with all those bank HQ's right there I always sorta thought that was the real CBD as opposed to toruist ghetto on Sukhumvit.

TH

Hi thaihome - The Met is a very, very interesting development. I love the concept of the gardens and it apparently a joins the hotel which has its own gardens I believe, great stuff! The area is interesting it is more like Covent Garden / Soho in UK terms. I understand that all Farang quota units (god I hate that term) sold out almost immediately and Thai Quota (god I hate that term also!) are in difficulties, leasehold etc being considered.

You cannot cross that road without taking you life in your hands. To get to the BTS you sort of have to take a taxi, as well as a taxi to Central the 'local store'.

No it is not CBD

[363885]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

Not CBD.

Isn't the Met the one on Sathorn Road next to the Singapore Embassy? Are you saying that is not the CBD? Gee, with all those bank HQ's right there I always sorta thought that was the real CBD as opposed to toruist ghetto on Sukhumvit.

TH

Hi thaihome - The Met is a very, very interesting development. I love the concept of the gardens and it apparently a joins the hotel which has its own gardens I believe, great stuff! The area is interesting it is more like Covent Garden / Soho in UK terms. I understand that all Farang quota units (god I hate that term) sold out almost immediately and Thai Quota (god I hate that term also!) are in difficulties, leasehold etc being considered.

You cannot cross that road without taking you life in your hands. To get to the BTS you sort of have to take a taxi, as well as a taxi to Central the 'local store'.

No it is not CBD

While I agree the BTS is "slightly" far (it takes me 10 minutes to walk to Chong Nonsi) and Sathorn Road is in need of having a subway line passing through it, I do think Sathorn Road is CBD. But it really depends on your perspective on what is considered CBD. If it is shopping, CBD would be Siam and Chitlom. But if it is business and financial center, Sathorn definitely is it. Also, it has a large number of fabulous 5-star hotels (Sukhothai, Banyan Tree, Metropolitan, etc.).

Nevertheless, the point is that Sathorn condos have always commanded among the highest prices in Bangkok, and a property like The Met has dropped from about 160K-170K baht to 115K - 125K per sq. meter, a clear indication that prices are dropping in BKK. By the way, units in The Met have sold out. In fact, they've closed their on site office and show room. The only units now are "re-sale" units. But the fact that the development will complete this year right in the middle of the economic crisis means some buyers will not be able to close, and will have to resell at firesale prices, thus the decline in prices.

[quiksilva]

You see... Le Raffine was supposed to be the alpha and the omega of the luxury condo market in central bangkok, blablabla.

It was supposed to be a bunker against any price drop, economic downturn, or whatever else.

It was the Light House of Serenity and Eternal Growth Because Bangkok Is So Different (LHSEGBBISD copyright myself).

Well... Le Raffine is nothing else than a building. And a building amid a full blown crisis.

The luxury condominium developer Le Raffine' 1989 Co Ltd plans to reduce the latest prices of condominium units at its Soi Sukhumvit 39 site by 15-20% and sell the remaining units at Soi Sukhumvit 31 that it adit kept for renting out.

Dr Pimpa Vajrabukka, the company's owner and managing director, said prices at Le Raffine' Jambu Dvipa on Soi Sukhumvit 39 would be cut to 160,000 baht per square metre from 200,000 baht due to an unfavourable market. (Bangkok Post)

http://www.bangkokpost.com/business/econom...-cutting-prices

I don't know why I think about the movie Apocalypse Now, with colonel Kurtz.... "The horror.... the horror"...

Replace with "The suckers...".

Who told you that it "was supposed to the the bunker"? LOL

Le Raffine is ALL duplexes, every single one! (Talk about having all your eggs in one basket!). I am surprised to hear that they were trying to get 200,000 per square meter (the Sukhothai has a lot to answer for) but its not much of a surprise to learn that they didn't sell out 100%.

Edited February 3, 2009 by quiksilva

[midas]

You see... Le Raffine was supposed to be the alpha and the omega of the luxury condo market in central bangkok, blablabla.

It was supposed to be a bunker against any price drop, economic downturn, or whatever else.

It was the Light House of Serenity and Eternal Growth Because Bangkok Is So Different (LHSEGBBISD copyright myself).

Well... Le Raffine is nothing else than a building. And a building amid a full blown crisis.

The luxury condominium developer Le Raffine' 1989 Co Ltd plans to reduce the latest prices of condominium units at its Soi Sukhumvit 39 site by 15-20% and sell the remaining units at Soi Sukhumvit 31 that it adit kept for renting out.

Dr Pimpa Vajrabukka, the company's owner and managing director, said prices at Le Raffine' Jambu Dvipa on Soi Sukhumvit 39 would be cut to 160,000 baht per square metre from 200,000 baht due to an unfavourable market. (Bangkok Post)

http://www.bangkokpost.com/business/econom...-cutting-prices

I don't know why I think about the movie Apocalypse Now, with colonel Kurtz.... "The horror.... the horror"...

Replace with "The suckers...".

Who told you that it "was supposed to the the bunker"? LOL

Le Raffine is ALL duplexes, every single one! (Talk about having all your eggs in one basket!). I am surprised to hear that they were trying to get 200,000 per square meter (the Sukhothai has a lot to answer for) but its not much of a surprise to learn that they didn't sell out 100%.

Oh come on quiksilva' when the market was booming this was meant to be one of

the most sought after condo's in Bangkok :-

" What makes Le Raffiné condominiums so exclusive and unique?

We are the world’s first themed condominium, offering the ultimate in privacy with the exclusiveness of a private balcony pool in every unit.

High rise does not have to mean high density. The level of luxury delivered by the Le Raffiné brand of condominiums in unrivalled with low density being a distinguishing feature of our belief that quality of life is more important than the quantity of available for sale. "

Now that the market is heading into unchartered waters and no one this time how it will be impacted

- particularly with Thailand borrowing money to keep going -you cannot say this is not reflecting the general

trend downwards

[ray08]

The price cut is part of the story..

"Despite an almost 20% decrease in unit prices, the project continues to generate a profit as the prices are well above the launch prices of 90,000 baht a sq m four years ago. The project value will rise from two billion baht to 2.5 billion."

I'm sure that you accidentally forgot to mention that.

I remember the prices around Thb 100kpsm , so now they are discounted from thb 200k to thb 160k , just shows how shonkey the market really is , a fake discount ,last week in the bangkok post a big private add asking around Thb 125k psm ,

The developer is trying to say firesale 15-20% discount ,yet i dont think anyone paid Thb 200kpsm

[pkrv]

Prices are indeed dropping significantly in CBD. For example, The Met began sales at 110K baht per sq. meter a few years ago. It peaked mid last year, before the global economic crisis hit, at about 160K - 170K per sq. meter. Now, you can see ads for resale dropped to about 110K to 125K. I suspect it will further decline, as some buyers won't have the funds to close when the building is complete.

link?

Prakard.com

Not CBD.

Isn't the Met the one on Sathorn Road next to the Singapore Embassy? Are you saying that is not the CBD? Gee, with all those bank HQ's right there I always sorta thought that was the real CBD as opposed to toruist ghetto on Sukhumvit.

TH

Hi thaihome - The Met is a very, very interesting development. I love the concept of the gardens and it apparently a joins the hotel which has its own gardens I believe, great stuff! The area is interesting it is more like Covent Garden / Soho in UK terms. I understand that all Farang quota units (god I hate that term) sold out almost immediately and Thai Quota (god I hate that term also!) are in difficulties, leasehold etc being considered.

You cannot cross that road without taking you life in your hands. To get to the BTS you sort of have to take a taxi, as well as a taxi to Central the 'local store'.

No it is not CBD

While I agree the BTS is "slightly" far (it takes me 10 minutes to walk to Chong Nonsi) and Sathorn Road is in need of having a subway line passing through it, I do think Sathorn Road is CBD. But it really depends on your perspective on what is considered CBD. If it is shopping, CBD would be Siam and Chitlom. But if it is business and financial center, Sathorn definitely is it. Also, it has a large number of fabulous 5-star hotels (Sukhothai, Banyan Tree, Metropolitan, etc.).

Nevertheless, the point is that Sathorn condos have always commanded among the highest prices in Bangkok, and a property like The Met has dropped from about 160K-170K baht to 115K - 125K per sq. meter, a clear indication that prices are dropping in BKK. By the way, units in The Met have sold out. In fact, they've closed their on site office and show room. The only units now are "re-sale" units. But the fact that the development will complete this year right in the middle of the economic crisis means some buyers will not be able to close, and will have to resell at firesale prices, thus the decline in prices.

Thanks for a very informative post. The Met now fully sold interesting. Odd you are seeing a price fall. That has not happened at The Park (independent reports are at 150K psm) or Athenee (135k psm). Both up from about 100k psm

I can see why you say the area is CBD it has Bangkok Bank head office, Citibank, Mizhou and HSBC's single branch. Plus Reuters (sorry Thompson). Chidlom has Deutsche Bank I think Another Thai banks HO, the embassies and I guess key the infrastructure (shops BTS etc).

I really, really, agree it is very difficult to translate Bangkok into our western concepts.

BTW I like Vertigo and Cy'an very much indeed!

[quiksilva]

You see... Le Raffine was supposed to be the alpha and the omega of the luxury condo market in central bangkok, blablabla.

It was supposed to be a bunker against any price drop, economic downturn, or whatever else.

It was the Light House of Serenity and Eternal Growth Because Bangkok Is So Different (LHSEGBBISD copyright myself).

Well... Le Raffine is nothing else than a building. And a building amid a full blown crisis.

The luxury condominium developer Le Raffine' 1989 Co Ltd plans to reduce the latest prices of condominium units at its Soi Sukhumvit 39 site by 15-20% and sell the remaining units at Soi Sukhumvit 31 that it adit kept for renting out.

Dr Pimpa Vajrabukka, the company's owner and managing director, said prices at Le Raffine' Jambu Dvipa on Soi Sukhumvit 39 would be cut to 160,000 baht per square metre from 200,000 baht due to an unfavourable market. (Bangkok Post)

http://www.bangkokpost.com/business/econom...-cutting-prices

I don't know why I think about the movie Apocalypse Now, with colonel Kurtz.... "The horror.... the horror"...

Replace with "The suckers...".

Who told you that it "was supposed to the the bunker"? LOL

Le Raffine is ALL duplexes, every single one! (Talk about having all your eggs in one basket!). I am surprised to hear that they were trying to get 200,000 per square meter (the Sukhothai has a lot to answer for) but its not much of a surprise to learn that they didn't sell out 100%.

Oh come on quiksilva' when the market was booming this was meant to be one of

the most sought after condo's in Bangkok :-

" What makes Le Raffiné condominiums so exclusive and unique?

We are the world’s first themed condominium, offering the ultimate in privacy with the exclusiveness of a private balcony pool in every unit.

High rise does not have to mean high density. The level of luxury delivered by the Le Raffiné brand of condominiums in unrivalled with low density being a distinguishing feature of our belief that quality of life is more important than the quantity of available for sale. "

Now that the market is heading into unchartered waters and no one this time how it will be impacted

- particularly with Thailand borrowing money to keep going -you cannot say this is not reflecting the general

trend downwards

If it was "one of the most sought after projects" as you and the developers think, then why didn't it sell out?

Do not misconstrue my posts, I am not saying that the market is not on a decline. I have always said that those who MUST sell will do so at a lower price, whilst others who might like to sell but dont need to will simply hold on to the assets until such time as the market recovers, whenever that might be. This is what is happening now.

This is also not entirely unchartered waters, certainly the nature of the global meltdown is fairly unique, but the markets have crashed before and they have always recovered. Yes I accept there are oddball exceptions like Japan, but even their markets have improved with time, albeit taking much longer than elsewhere).

Midas, you seem to believe that the world is going to hel_l in a hand basket, doomed never to recover, where properties will eventually drop in value to the point where you can afford to buy houses for a few hundred quid, and pints will cost pennies.

I just don't see it happening, in fact all the evidence points to an overall rise in values over the long term (say a building's life cycle) despite the severe dips along the way. Yes right now we are on what could be a deep downward slope, and we may not yet have hit the bottom, we also don't know how long we will stay at the bottom, but I remain confident that it will rise again.

Of course, if you prefer the doomsday scenario, and that seems like your personal take on things, that's up to you but there is no empirical evidence to support it.

-----------------

RE CBD

We define the Central Business District as the area with the highest density of grade A office buildings, currently this is the L shaped area around Lumpini Park, bordered by Sathorn, Silom, Rama IV, Rajadamri, Ploenchit and Wireless Roads.

Edited February 3, 2009 by quiksilva

[pkrv]

You see... Le Raffine was supposed to be the alpha and the omega of the luxury condo market in central bangkok, blablabla.

It was supposed to be a bunker against any price drop, economic downturn, or whatever else.

It was the Light House of Serenity and Eternal Growth Because Bangkok Is So Different (LHSEGBBISD copyright myself).

Well... Le Raffine is nothing else than a building. And a building amid a full blown crisis.

The luxury condominium developer Le Raffine' 1989 Co Ltd plans to reduce the latest prices of condominium units at its Soi Sukhumvit 39 site by 15-20% and sell the remaining units at Soi Sukhumvit 31 that it adit kept for renting out.

Dr Pimpa Vajrabukka, the company's owner and managing director, said prices at Le Raffine' Jambu Dvipa on Soi Sukhumvit 39 would be cut to 160,000 baht per square metre from 200,000 baht due to an unfavourable market. (Bangkok Post)

http://www.bangkokpost.com/business/econom...-cutting-prices

I don't know why I think about the movie Apocalypse Now, with colonel Kurtz.... "The horror.... the horror"...

Replace with "The suckers...".

Who told you that it "was supposed to the the bunker"? LOL

Le Raffine is ALL duplexes, every single one! (Talk about having all your eggs in one basket!). I am surprised to hear that they were trying to get 200,000 per square meter (the Sukhothai has a lot to answer for) but its not much of a surprise to learn that they didn't sell out 100%.

Oh come on quiksilva' when the market was booming this was meant to be one of

the most sought after condo's in Bangkok :-

" What makes Le Raffiné condominiums so exclusive and unique?

We are the world's first themed condominium, offering the ultimate in privacy with the exclusiveness of a private balcony pool in every unit.

High rise does not have to mean high density. The level of luxury delivered by the Le Raffiné brand of condominiums in unrivalled with low density being a distinguishing feature of our belief that quality of life is more important than the quantity of available for sale. "

Now that the market is heading into unchartered waters and no one this time how it will be impacted

- particularly with Thailand borrowing money to keep going -you cannot say this is not reflecting the general

trend downwards

If it was "one of the most sought after projects" as you and the developers think, then why didn't it sell out?

I don't know how the projects are doing but quite frankly for me they did not even get by a causal sweep of marketing material. They are not to my taste.

[midas]

This is also not entirely unchartered waters, certainly the nature of the global meltdown is fairly unique, but the markets have crashed before and they have always recovered. Yes I accept there are oddball exceptions like Japan, but even their markets have improved with time, albeit taking much longer than elsewhere).

Midas, you seem to believe that the world is going to hel_l in a hand basket, doomed never to recover, where properties will eventually drop in value to the point where you can afford to buy houses for a few hundred quid, and pints will cost pennies.

I just don't see it happening, in fact all the evidence points to an overall rise in values over the long term (say a building's life cycle) despite the severe dips along the way. Yes right now we are on what could be a deep downward slope, and we may not yet have hit the bottom, we also don't know how long we will stay at the bottom, but I remain confident that it will rise again.

Of course, if you prefer the doomsday scenario, and that seems like your personal take on things, that's up to you but there is no empirical evidence to support it.

quiksilva I never said the world is " going to hel_l in a hand basket, doomed never to recover " because yes the sun will keep rising everyday

and life in places like Isaan where I go to visit will keep going on at a very pleasant and leisurely pace. And I never said " where properties will

eventually drop in value to the point where you can afford to buy houses for a few hundred quid, and pints will cost pennies."

But I am saying that those who think the financial system as we know it and thereby asset values as we know them will continue to show

the same robust performance of the past are dreaming

You say markets have crashed before and they have always recovered I think is a vast oversimplification. And Japan

has never recovered to the level it was once at ? There are so many variables that have to be taken into

account this time around. When was the world facing so much debt ever before

by so many sovereign states who are effectively simultaneously " broke " and with those

countries unable to squeeze any more money out of their citizens?

Where can they go from here?

I do believe we are facing a significant and unpredictable change in the financial system- not now not even

next year but in the next few years-something has to give - don't you see any major differences in the state of

the world financial system today compared to the relatively minor recessions you have referred to in the past?

There is also the unprecedented loss of confidence in banks which will be accentuated even further over the next few months

as we see even more banks in the USA collapsing - even now 44 percent of people in the UK no longer feel comfortable

keeping money in the bank -and how long is that going to go on ? There will be some pertinent questions to be answered when these US banks

do collapse as to how much information should have been immediately revealed now upfront rather than waiting for some people who are bound to lose

more money all over again-like a festering sore.

Simply saying things will recover just because they have in the past is meaningless without considering the substantial demographic differences

around the world.

Please explain the mechanism of a possible correction ? Please join the dots for us and give us your opinion as to how you see

how things will unfold economically around the world over the next 10 to 20 years to support your theory of an eventual recovery

to support " an overall rise in values over the long term " ?

We got into this trouble in the first place partly because the multiplier between people salaries and their borrowings was off the planet.

How many young graduates representing the new working population today find it difficult to get very well paid full-time work ?

And there is certainly no prospect of an enormous push in wage costs -so without that how can real estate

values ever increase like they did in the past without the liquidity of

the artificial money of derivatives upon more derivatives which was in the system before

should never been there in the first place and with the average person no longer earning large salaries ?

How can you possibly know how many of these jobs being lost now will ever come back ?

At the end of the day one of us will be proved right and the other wrong regarding our very different interpretation of things-

the world will not end and I never said it will but I firmly believe the financial world will change so much that

you'll be waiting a very long time for your expected " overall rise in values "

[shochu]

quicksilva,

i wonder if u ever found the ivy league prof i mentioned in the past who is - well - the man when it comes to housing. his name is shiller and he is part of a team shiller case - and they do housing studies.

as i mentioned before, they point out how housing over the past couple of hundred years shows only a slight increase in value to the point we can safely say is flat. however, this does not consider the depreciating currency and the cost for upkeep. so it is safe to say - housing does not go up in value - it only does a cycle of boom and bust so if u can catch it at the bottom, then u can profit at the top - that is if u want to.

this housing bubble is - how shall i say it - along with the world economy - the biggest ????? the modern economy has ever experienced and will go down as the greater depression when the future generations talk about it.

the simplest way i can explain what is happening without giving away the candy store so to speak is - it's a numbers game!

and contrary to what many people have said repeated her on tv - there were a lot of firesales during the 97 crisis. we didn't get too much info back then because the internet was not as widely prevalent back then.

[midas]

quicksilva,

i wonder if u ever found the ivy league prof i mentioned in the past who is - well - the man when it comes to housing. his name is shiller and he is part of a team shiller case - and they do housing studies.

as i mentioned before, they point out how housing over the past couple of hundred years shows only a slight increase in value to the point we can safely say is flat. however, this does not consider the depreciating currency and the cost for upkeep. so it is safe to say - housing does not go up in value - it only does a cycle of boom and bust so if u can catch it at the bottom, then u can profit at the top - that is if u want to.

this housing bubble is - how shall i say it - along with the world economy - the biggest ????? the modern economy has ever experienced and will go down as the greater depression when the future generations talk about it.

the simplest way i can explain what is happening without giving away the candy store so to speak is - it's a numbers game!

and contrary to what many people have said repeated her on tv - there were a lot of firesales during the 97 crisis. we didn't get too much info back then because the internet was not as widely prevalent back then.

shochu, thanks - i had not heard of this man before but this was interesting ....

http://www.spiegel.de/international/busine...,582621,00.html

[quiksilva]

As well you know, Midas I have read and I believe understand both of your opinions quite well, and whilst you have never stated those comments exactly, I think they illustrate your view quite well. The financial landscape is of course changing rapidly, as I said nobody knows how it will pan out, how deep it will go and how long it will last, it might last along time.

Senior management in a number of major MNC's that I regularly speak to tend to be believe that whilst it may take a few years to get back on our feet, but nobody seriously believes that a recovery will be more than a few years away. Even Roubini suggest that recovery may start in 2010, and even when that happens they will be hard and difficult times, but they will get better.

Shochu, the last time you were referencing Schiller you were trying to tell me that there was no such thing as a cyclical movement of markets, from boom to bust and recovery, which is contrary to what you just said and contrary even to his data, see: Schiller's US Housing Data.

This shows a huge bubble in the US housing markets of recent times (i.e. the last 10 years) just as it shows previous peaks and troughs, and despite everything it also shows that Home Prices over the long term rise (right click on the home price index and add a linear trend line). Yes, the recent US housing bubble is unprecedented in its scale, and it does skew the outlook on that trend, but its the trend is still up no matter which way you look at it, and this history shows us that no matter how bad things get markets recover.

Why? Well I am not going to write a detailed economic paper on the subject, and heck if I knew what and how things would pan out over the next few years I wouldn't be working in real estate in Thailand!

But here's a few key points to my rationale:

1. People always need housing. People instinctively prefer to own their main residence than lease. Yes, that view changes at times, but on the whole whilst it might not be rational, its true.

2. However, many will prefer to rent in these difficult times. This is good for landlords. As demand for lets increase, rents will eventually climb. So yields will improve too, eventually to point where they offer a much more attractive destination for capital than simply putting it in highly risky stocks and 'risky' banks... Late 2009 early 2010 could be an interesting time to get in the market...

As more people eventually seek to acquire assets, prices will eventually recover for these leased premises. Comparable valuations mean that market values will rise too.

I only hope that investors get real, and accept that recent anticipations of double digit returns are grossly unrealistic, (some major players I know were seeking 25% and much more besides!), whereas property markets natural level tend to be more in the single digit territory (varying by property type). If we proceed on that basis, I think we'll be good for a while.

Schiller made a good call on the US housing bubble in 2003, I wasn't reading him back then. Frankly I wasn't all that interested. Although the IMF called an over valuation of the UK property markets to the tune 30% back in the same year.

I personally keep myself up to date with latest Knight Frank, RICS, IMF, World Bank, PWC and various other research papers but mostly those that are focussed on regional property markets and overall macro economic trends, as these are much more relevant to my day job. So no, I haven't been following Schiller much, I wish I had time to keep abreast on every property market in the world, but alas time is precious.

Edited February 4, 2009 by quiksilva

[pkrv]

RE CBD

We define the Central Business District as the area with the highest density of grade A office buildings, currently this is the L shaped area around Lumpini Park, bordered by Sathorn, Silom, Rama IV, Rajadamri, Ploenchit and Wireless Roads.

Thanks for the insight - That makes sense - Very strangly these are the areas I know best, though I am just a tourist for the moment.

[shochu]

quiksilva,

are u sure ur not making things up?

show me in a past post where i said there are no boom and bust cycles. i believe - no - i know for a fact - that i have always said, there were - but - OVER A LONG PERIOD it reverts back to a mean which is really not much growth unless one gets in at the low and gets out at the high- just as i have stated above. and lets not forget to add inflation, upkeep and if u want me to add more property taxes. i have stated all these a couple of years ago.

u r gonna have to make a better reply if u want to be taken seriously and frankly, i expect more from someone in the industry.

j'm sure u can not expect us to actually take internal reports made by industry so called experts to be more accurate than the most respected economist in the field. and we both know that we can find the appropriate graph from him to either cloud or more accurately provide the info.

just so u know - i do get paid to consult on these matters and maybe u once knew more about the local market, but i would say my research skills are second to none and my research in the local market over the last two years gives me a pretty good insight into these markets. everything i have stated regarding the economy, currency plays and the local housing markets have come to pass, whereas all the literature from ur so called experts have been updated with quotidian reports trying to downplay the direction of the industry which also contradict their earlier statements.

don't blame me if i don't take ur indsutry reports too seriously.

just check my past posts and it speaks for itself!

and the fact i have not been affected by the downturn and am still bringing in the same returns as past years speaks volumes.

[shochu]

u know what - i need to add something

quicksilva ,

that graph is LAME

u and i know that - that graph does NO JUSTICE to his research.

now i know u are desperate!!!!!!

[pkrv]

May I add a comment - god I am dead meat.

What is happening here is simply us all exploring. IMO quiksilva is using the board to supplement his information on the market - to him it is a tool. But you know what he contributes back - big time, IMO it is in his nature. And note he does not have to.

quiksilva cannot forward extrapolate, he is a bloody bright individual and he knows some can. Why do I say that well look at the UK's language 'you cannot make an omelette without breaking eggs'. shochu - Have you ever tried to push out the envelope?

[midas]

As well you know, Midas I have read and I believe understand both of your opinions quite well, and whilst you have never stated those comments exactly, I think they illustrate your view quite well. The financial landscape is of course changing rapidly, as I said nobody knows how it will pan out, how deep it will go and how long it will last, it might last along time.

Senior management in a number of major MNC's that I regularly speak to tend to be believe that whilst it may take a few years to get back on our feet, but nobody seriously believes that a recovery will be more than a few years away. Even Roubini suggest that recovery may start in 2010, and even when that happens they will be hard and difficult times, but they will get better.

Why? Well I am not going to write a detailed economic paper on the subject, and heck if I knew what and how things would pan out over the next few years I wouldn't be working in real estate in Thailand!

But here's a few key points to my rationale:

1. People always need housing. People instinctively prefer to own their main residence than lease. Yes, that view changes at times, but on the whole whilst it might not be rational, its true.

2. However, many will prefer to rent in these difficult times. This is good for landlords. As demand for lets increase, rents will eventually climb. So yields will improve too, eventually to point where they offer a much more attractive destination for capital than simply putting it in highly risky stocks and 'risky' banks... Late 2009 early 2010 could be an interesting time to get in the market...

As more people eventually seek to acquire assets, prices will eventually recover for these leased premises. Comparable valuations mean that market values will rise too.

I only hope that investors get real, and accept that recent anticipations of double digit returns are grossly unrealistic, (some major players I know were seeking 25% and much more besides!), whereas property markets natural level tend to be more in the single digit territory (varying by property type). If we proceed on that basis, I think we'll be good for a while.

Schiller made a good call on the US housing bubble in 2003, I wasn't reading him back then. Frankly I wasn't all that interested. Although the IMF called an over valuation of the UK property markets to the tune 30% back in the same year.

I personally keep myself up to date with latest Knight Frank, RICS, IMF, World Bank, PWC and various other research papers but mostly those that are focussed on regional property markets and overall macro economic trends, as these are much more relevant to my day job. So no, I haven't been following Schiller much, I wish I had time to keep abreast on every property market in the world, but alas time is precious.

quicksilva, " Late 2009 early 2010 could be an interesting time to get in the market " - give me a break please take off your estate agents hat for just one second!

I do respect Roubini but I have also recently read other experts that said the Dow could yet go as low as 3000 and this slowdown could last

20 plus years. But I wouldn't even spend five seconds reading research disseminated by people in your industry because it is not impartial and it certainly

doesn't give a macro economic view.

Thank you for at least responding with 1 and 2.

1. People always need housing. People instinctively prefer to own their main residence than lease. Yes, that view changes at times, but on the whole whilst it might not be rational, its true.

Using the search engine I found this web site :-

http://www.shiredirect.com/mortgage-glossa...-mortgages.html

They boast about their ability to get 5x salary and even 7x salary mortgages even though they admit on the same web page

" Traditionally, the measure for calculating the maximum mortgage loan was set at 3+1 or 2.5 joint. In essence, this meant that the maximum mortgage advance was restricted to 3x the main earner's basic salary, plus 1x the salary from the other applicant. The alternative calculation was set at 2.5 x the joint basic salaries. Few uplifts were available for overtime, bonus or commission payments."

quicksilva, this is not doomsday or apocalyptic this is simply my question to you if many homes in the last decade were purchased on the basis for these ridiculous multipliers way out of line with traditional banking standards and if we are heading back to more conservative ratios how are people generally going to be able to purchase homes even if they want to moving forward?

Like I said in my previous post, salary levels are not even being maintained at existing levels-they are being slashed e.g. American Express just did this to all their staff.

2. However, many will prefer to rent in these difficult times. This is good for landlords. As demand for lets increase, rents will eventually climb. So yields will improve too, eventually to point where they offer a much more attractive destination for capital than simply putting it in highly risky stocks and 'risky' banks... Late 2009 early 2010 could be an interesting time to get in the market...

Landlords may well have to settle for whatever rent they will be able to achieve but that certainly doesn't guarantee there will be a plethora of investors out there to buy up these homes.

What about the huge numbers of people whose retirement funds now lie decimated? They won't be flush with funds to buy investment properties?

And again if the bank's remain conservative regarding their lending for a long time there is only one way real estate will be able to be shifted i.e. DROPPING THE PRICES substantially.

You say "As more people eventually seek to acquire assets, prices will eventually recover for these leased premises " OK SHOW ME THE MONEY - I asked the same question is yesterday- where is this money going to come from? What will ignite liquidity from the banks again and without that, how can there be a recovery?

In the early 1990s I read a book by Lord William Rees Mogg called " The Great Reckoning ".William Rees Mogg was previously Editor of the Financial Times and laterhe became financial adviser to the Saudi Royal Family. You should read this book and expand your reading material quicksilva beyond people say in your industry. When this book originally came out, many of the predictions sounded outlandish. One was that U.S. would suffer a major

Depression in the 90s where "the value of the average private home will drop by two-thirds" - this didn't happen in the '90s, but it doesn't seem so far-fetched today.

[thaiwanderer]

Thai Deputy PM recently announced the Government Savings Bank will enter a jv with insurance companies to offer 100 per cent mortgages to low income households.

Seems to have been popular elsewhere in the world until fairly recently.

Imagine it will stimulate sales, but......

Edited February 4, 2009 by thaiwanderer

[midas]

Thai Deputy PM recently announced the Government Savings Bank will enter a jv with insurance companies to offer 100 per cent mortgages to low income households.

Seems to have been popular elsewhere in the world until fairly recently.

Imagine it will stimulate sales, but......

yeah might help with the 1 - 3 million baht condos for the locals but it wont solve the

problems for expats with their expectations

[shochu]

pkrv,

i think i have offered more accurate info here than most others have regarding the market and real estate

what quiksilva did today, was reveal HIS true intentions. his graph was the biggest con job as misconstruing info i have ever come across. he has only really offered tidbits of info - ever, and only offered market info. after someone else has first mentioned it, or there was evidence of it in print.

do i ever push the envelope. well - i know where the economy and the markets are headed.

pkrv - a question - where do u keep ur pom poms?

[shochu]

in the post today 100,000 unsold condos as of the end of 2008.

50,000 coming on line

rough numbers

[donx]

In the early 1990s I read a book by Lord William Rees Mogg called " The Great Reckoning ".William Rees Mogg was previously Editor of the Financial Times and laterhe became financial adviser to the Saudi Royal Family. You should read this book and expand your reading material quicksilva beyond people say in your industry. When this book originally came out, many of the predictions sounded outlandish. One was that U.S. would suffer a major

Depression in the 90s where "the value of the average private home will drop by two-thirds" - this didn't happen in the '90s, but it doesn't seem so far-fetched today.

Why would anyone want to read a book from someone that was so far off the mark? Average private home prices in the US didn't drop by two-thirds in the '90s and they haven't drop anywhere near that where I am in the US. Two-thirds means 66% drop. What is the average (for the entire US real estate market which is what this guy was presumably was referring to in his book) home price today compared to 2008, 2007, 2006, or 2005? I don't know but I bet it is not even a drop of 50%.

Prove me wrong midas and I will read the book.

[midas]

In the early 1990s I read a book by Lord William Rees Mogg called " The Great Reckoning ".William Rees Mogg was previously Editor of the Financial Times and laterhe became financial adviser to the Saudi Royal Family. You should read this book and expand your reading material quicksilva beyond people say in your industry. When this book originally came out, many of the predictions sounded outlandish. One was that U.S. would suffer a major

Depression in the 90s where "the value of the average private home will drop by two-thirds" - this didn't happen in the '90s, but it doesn't seem so far-fetched today.

Why would anyone want to read a book from someone that was so far off the mark? Average private home prices in the US didn't drop by two-thirds in the '90s and they haven't drop anywhere near that where I am in the US. Two-thirds means 66% drop. What is the average (for the entire US real estate market which is what this guy was presumably was referring to in his book) home price today compared to 2008, 2007, 2006, or 2005? I don't know but I bet it is not even a drop of 50%.

Prove me wrong midas and I will read the book.

You have missed the point altogether. I read it 18 years ago and Rees Mogg ( who is much more brilliant than you and I ! )

predicted a depression - ok his prediction was 18 years too early - who gives a stuff- it is the reasons for the depression which

has now hit us that are important and you need to read it all to understand why and what is happening.

And for the 66% drop well USA hasnt hot the bottom yet has it ?

[donx]

In the early 1990s I read a book by Lord William Rees Mogg called " The Great Reckoning ".William Rees Mogg was previously Editor of the Financial Times and laterhe became financial adviser to the Saudi Royal Family. You should read this book and expand your reading material quicksilva beyond people say in your industry. When this book originally came out, many of the predictions sounded outlandish. One was that U.S. would suffer a major

Depression in the 90s where "the value of the average private home will drop by two-thirds" - this didn't happen in the '90s, but it doesn't seem so far-fetched today.

Why would anyone want to read a book from someone that was so far off the mark? Average private home prices in the US didn't drop by two-thirds in the '90s and they haven't drop anywhere near that where I am in the US. Two-thirds means 66% drop. What is the average (for the entire US real estate market which is what this guy was presumably was referring to in his book) home price today compared to 2008, 2007, 2006, or 2005? I don't know but I bet it is not even a drop of 50%.

Prove me wrong midas and I will read the book.

You have missed the point altogether. I read it 18 years ago and Rees Mogg ( who is much more brilliant than you and I ! )

predicted a depression - ok his prediction was 18 years too early - who gives a stuff- it is the reasons for the depression which

has now hit us that are important and you need to read it all to understand why and what is happening.

And for the 66% drop well USA hasnt hot the bottom yet has it ?

Thank you for your response, but you failed to prove your point. I see no reason whatsoever to read something you yourself said you read some 18 years ago and with predictions that were off the mark. Thanks, but no thanks.