Housing Prices In Thailand Expected To Rise 6-10% Next Year

[neverdie]

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Eureka! You have pointed out the reason I am expecting the value of my condo units to increase 15-18% next year, and doubling in 2015.

[neverdie]

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Eureka! You have pointed out the reason I am expecting the value of my condo units to increase 15-18% next year, and doubling in 2015.

Perhaps I should of used the following tune to jolt you into reality:-

[animatic]

Nostalgic.

Saw them in a 2,200 year old Roman arena, excellent band.

There is some dreamy logic to these posts, though technically off topic.

[ronz28]

10%??? Perhaps a dead cat bounce after a crash.

[Mossfinn]

I thought I would contribute to the debate

[David006]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government’s measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB’s housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

"forecast", "unlikely", "could" "he believed" "according to a bank executive".......What great news ! .I think, maybe, could be, perhaps!!

[neverdie]

Nostalgic.

Saw them in a 2,200 year old Roman arena, excellent band.

There is some dreamy logic to these posts, though technically off topic.

See a man with your talent recognises the secret messages I sent.

I was waiting for someone to go 'off topic' comment, but personally, if you listen to the words of both songs, im right on topic

[prefabs]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government's measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB's housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

The is a typical example of irrational propaganda intended to bolster the weakening Thai estate market. Most of the article doesn't make sense at all.

The unnamed "bank executive" that was quoted in this article should be demoted to sweeping floors. He obviously didn't take economics 101 in college(if he ever attended college in the first place!).

He was named twice in the article. Or am I seeing things which aren't there? Mind you, I agree that he is talking rubbish. I bet he was smiling when he said it, a sure indicator that he is talking crap

[geriatrickid]

By coincidence, this came out over the various wire services at approx. the same time as the post;

Efforts to boost economic recovery are having the dangerous side effect of creating new bubbles in property, stock, and currency markets, the World Bank warned yesterday. Commodity prices are also surging, with gold hitting a record price yesterday. The effect is most pronounced in Asia, where recovery has come soonest, with real estate markets in Hong Kong quickly becoming divorced from the laws of supply and demand.

I suppose one could substitute Thailand for Hong Kong..............

[chiang mai]

By coincidence, this came out over the various wire services at approx. the same time as the post;

Efforts to boost economic recovery are having the dangerous side effect of creating new bubbles in property, stock, and currency markets, the World Bank warned yesterday. Commodity prices are also surging, with gold hitting a record price yesterday. The effect is most pronounced in Asia, where recovery has come soonest, with real estate markets in Hong Kong quickly becoming divorced from the laws of supply and demand.

I suppose one could substitute Thailand for Hong Kong..............

[MaiChai]

Condo sales are very much manipulated. Here is something I saw of a developement. Developer builds condos and then buys all the condos. Developer then tells you that all the condos are sold but there may be a few available on the resale market (at a higher price). So the supply and demand is manipualted and you can buy a unit, if you are prepared to pay the inflated price. Of course the developer buying their own units costs nothing; just a paper transaction. And you don't know that the developer has bought them; you are just told they are all sold, since there was such a large demand. So the price must be right, and thus the inflated resale price must also be justified. Where is the honesty, decency and trust in doing business in Thailand? My word is my scam?

[HappyThaiLife]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government's measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB's housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

Don't mean to sound pessimistic...but I don't believe one iota of this. It is a PR campaign to get people buying. They can't give away houses, land or condos at the moment. A buyers market still...

[HappyThaiLife]

This is in keeping with the (confirmed) idea that property bubbles are forming in a number of countries throughout the region so perhaps not as silly as it seems.

Optimists? Property bubbles? That sounds good.

Well, maybe you should be working for GM.

The bottom line is what buyers are willing to do.

Where are the buyers? Thais? Foreigners?

The real estate market has not yet hit bottom.

I agree entirely... we haven't hit bottom yet... I've been researching it for only 1.5 years and I can see that clearly...

[HappyThaiLife]

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Eureka! You have pointed out the reason I am expecting the value of my condo units to increase 15-18% next year, and doubling in 2015.

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

How many stalled/unfinished condo units are there in bkk? I can count more than 2 hands worth from my window...

[HappyThaiLife]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government's measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB's housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

The is a typical example of irrational propaganda intended to bolster the weakening Thai estate market. Most of the article doesn't make sense at all.

The unnamed "bank executive" that was quoted in this article should be demoted to sweeping floors. He obviously didn't take economics 101 in college(if he ever attended college in the first place!).

He was named twice in the article. Or am I seeing things which aren't there? Mind you, I agree that he is talking rubbish. I bet he was smiling when he said it, a sure indicator that he is talking crap

I think this banker ought to start looking for a position on the survivor banker show. That is a fantasy show where interest rates increase, prices increase while no one is buying. The winner ends up flipping burgers at MacDonalds...

[phetaroi]

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

You are joking? I live on Sukhumvit, Soi 24. Pretty good area. Most of the condo units here are dark all the time. A friend who is a Thai real estate agent told me many of the buildings are more than 50% empty. yet, they build more. I have to admit, I just don't understand the concept of the condo market here.

[Thai at Heart]

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

You are joking? I live on Sukhumvit, Soi 24. Pretty good area. Most of the condo units here are dark all the time. A friend who is a Thai real estate agent told me many of the buildings are more than 50% empty. yet, they build more. I have to admit, I just don't understand the concept of the condo market here.

Maybe I was being a little obtuse with my words. Location is everything in Bangkok if you hope to make money with a condo. And yes it will take an awfully long time for all the existing and future stock of condos to sell out. Hence, I wish him luck (an awful lot) if he expects the value of his condo to double to 2015, let alone go up 6 to 10% in the next year.

The market here is very difficult to grasp since supply and demand appear not to apply and there is little transparency. Plus there are very few limitations on land use, so in essence the entire stock of land (other than national parks etc) is available for housing. This is a concept that many farangs fail to notice. This in combination with Thai's preference for buying new property (more so houses), lack of limit of future supply and possible build quality issues means that the 2nd hand market in Thailand is virtually impossible to fathom. Prime Bangkok and the islands has some liquidity in the 2nd hand market for sales, outside those areas virtually none.

It isn't impossible to make money, but a good element of luck is involved and planning to make a large chunk of money in a short period of time is more luck than judgement. Flicking apartments has been popular the world over to make money, and if you get it right you can do ok.

[pkrv]

I must confess I was taken aback when I achieved 100% returns in GBP terms on my condo since 2005, and it is just sitting empty - You think I am kidding?. That one really threw me.

Edited November 5, 2009 by pkrv

[Thai at Heart]

I must confess I was taken aback when I achieved 100% returns in GBP terms on my condo since 2005, and it is just sitting empty - You think I am kidding?. That one really threw me.

If so, as I said, not impossible.

You did actually sell it though?

[pkrv]

I must confess I was taken aback when I achieved 100% returns in GBP terms on my condo since 2005, and it is just sitting empty - You think I am kidding?. That one really threw me.

If so, as I said, not impossible.

You did actually sell it though?

No - nor would I want to. However the situation that generated this has somewhat focused my mind on certain issues. 50% from FX movement 50% from off the plan. There are prices on the site. The Park handles its own sales for various reasons.

http://www.theparkresidence.co.th/

you can go back through the topic on the real estate forum if you wish.

http://www.thaivisa.com/forum/Major-Projec...+major+projects

Edited November 5, 2009 by pkrv

[freedom4life]

It would be nice to read the headlines, "6-10% expected in housing prices, but the people won't pay it" It seems that wherever and whatever economic hike in something occurs, it's always the people having to bare the brunt. I'd say, enough is enough and just decline or refuse the legalized-extortion.

[trogers]

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

You are joking? I live on Sukhumvit, Soi 24. Pretty good area. Most of the condo units here are dark all the time. A friend who is a Thai real estate agent told me many of the buildings are more than 50% empty. yet, they build more. I have to admit, I just don't understand the concept of the condo market here.

You will understand the condo market here only when ownership restriction is lifted to allow 100% foreign own. The reason you are baffled is the Thai mentality and financial ability of buying, holding and leaving empty the 51% when rental value is falling.

The locals here are not worried about a new project kicking off next door. In fact, the new project which sells for 20-30% more will help boost their morale to hang on. Many knows, the value of cash is falling fast and holding a real asset is the best way to preserve wealth.

[bkkjames]

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

You are joking? I live on Sukhumvit, Soi 24. Pretty good area. Most of the condo units here are dark all the time. A friend who is a Thai real estate agent told me many of the buildings are more than 50% empty. yet, they build more. I have to admit, I just don't understand the concept of the condo market here.

You will understand the condo market here only when ownership restriction is lifted to allow 100% foreign own. The reason you are baffled is the Thai mentality and financial ability of buying, holding and leaving empty the 51% when rental value is falling.

The locals here are not worried about a new project kicking off next door. In fact, the new project which sells for 20-30% more will help boost their morale to hang on. Many knows, the value of cash is falling fast and holding a real asset is the best way to preserve wealth.

That might be true for land but for a 35 sqm condominium in a project that gets run down, falls apart in 10 years due to zero preventative up keep in the hopes that some farang will pay over the odds is better than keeping the money in the bank or playing with gold? I think alot buy in with the intention of trying to flip it before completion, good luck to them.

[trogers]

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.

You are joking? I live on Sukhumvit, Soi 24. Pretty good area. Most of the condo units here are dark all the time. A friend who is a Thai real estate agent told me many of the buildings are more than 50% empty. yet, they build more. I have to admit, I just don't understand the concept of the condo market here.

You will understand the condo market here only when ownership restriction is lifted to allow 100% foreign own. The reason you are baffled is the Thai mentality and financial ability of buying, holding and leaving empty the 51% when rental value is falling.

The locals here are not worried about a new project kicking off next door. In fact, the new project which sells for 20-30% more will help boost their morale to hang on. Many knows, the value of cash is falling fast and holding a real asset is the best way to preserve wealth.

That might be true for land but for a 35 sqm condominium in a project that gets run down, falls apart in 10 years due to zero preventative up keep in the hopes that some farang will pay over the odds is better than keeping the money in the bank or playing with gold? I think alot buy in with the intention of trying to flip it before completion, good luck to them.

If you are thinking about a 35m2 studio in the suburb, then yes, capital values will fall due to poor maintenance and non-payment of common fees. But if you consider those in town and near to BTS/MRT lines, then no. Many new projects in prime area targeting foreign tenants will be left vacant. The small studios along Rachada and Outer Sukhumvit will be occupied mainly by local tenants. Going rate at City Home Rachada Soi 10 is at Bt8-9k, and occupied mainly by locals.

Edited November 6, 2009 by trogers

[bkkjames]

Well I am just going by the previous poster on Soi 24 and what he said about the lights are off and nobody is home.

[trogers]

Well I am just going by the previous poster on Soi 24 and what he said about the lights are off and nobody is home.

These projects in prime area are held mainly by wealthy locals, eg. Millennium Residence in Soi 18 and The Emporio in Soi 24. Such locals do not buy small condos in the suburbs and can fork out the common fees while leaving the units vacant if asking rents are too low. I know of one who is leaving her 2-bedroom unit at Millennium empty and went on to book a 2-bedroom unit at Sukhothai Residence for over Bt180k/m2.

[bkkjames]

Well I am just going by the previous poster on Soi 24 and what he said about the lights are off and nobody is home.

These projects in prime area are held mainly by wealthy locals, eg. Millennium Residence in Soi 18 and The Emporio in Soi 24. Such locals do not buy small condos in the suburbs and can fork out the common fees while leaving the units vacant if asking rents are too low. I know of one who is leaving her 2-bedroom unit at Millennium empty and went on to book a 2-bedroom unit at Sukhothai Residence for over Bt180k/m2.

What about that piece of crap on soi 13 with the blue all over it or the one on Petchburi near World Trade Center? Good investments. anyways, I am sure this will continue over the weekend. enjoy all, time for me to meet Mr. Heineken

[trogers]

Well I am just going by the previous poster on Soi 24 and what he said about the lights are off and nobody is home.

These projects in prime area are held mainly by wealthy locals, eg. Millennium Residence in Soi 18 and The Emporio in Soi 24. Such locals do not buy small condos in the suburbs and can fork out the common fees while leaving the units vacant if asking rents are too low. I know of one who is leaving her 2-bedroom unit at Millennium empty and went on to book a 2-bedroom unit at Sukhothai Residence for over Bt180k/m2.

What about that piece of crap on soi 13 with the blue all over it or the one on Petchburi near World Trade Center? Good investments. anyways, I am sure this will continue over the weekend. enjoy all, time for me to meet Mr. Heineken

Ah...the one in Petchburi may be one of the projects trying to sell in the real estate expo in Singapore 2 weekends ago. Feedback was that the Thai booths were visited only by 5 Singaporeans during the 3 days.

The one in Soi 13 kicked off in early 2005. I think there was mismanagement as the developers are family members of the deceased owner of the Ambassador Hotel. Failure of this project is not due to any crisis as the market peaked in 2006 and hit bottom early 2008.

I do not fancy a condo in a mixed development, especially one as a tower over a shopping mall. I think many locals have the same view. It is difficult to separate the common area and its expenses for residential and commercial.