Housing Bubble

[taff33]

On the news it was on about house prices possibly "bursting",do you think that the "silly"asking prices have reached the top of thier limit or not.

[bkkjames]

Take one look at the classifieds section on here. 90<1 ads for condos for rent compared to anything else.

[Livinginexile]

It's not just houses and condo's that are booming, it's land prices too!

Me and the Mrs had a look at some land for sale on the River Kwai a couple of weeks ago. Prime farming land has allmost doubled from when we looked a couple of years ago!

It's crazy

[jackdawson]

sure . history shows = (always) boom and best . now when ? who knows ?

[doji]

My thought ….Whenever the Chinese bubble bursts, so goes Thailand too,and it will have a domino huge effect throughout asia. And most thais know that the oversea Chineses are and have been controlling our economy.

Right now there are already some signs of the Chinese housing bubbles and many banks there are sitting on many of realestate non-comforming loans. It's just a matter of time, I don't think they can hold out more than a few years here. Tick-tock…tick- tock…

[cheeryble]

My thought ….Whenever the Chinese bubble bursts, so goes Thailand too

I'm interested why?

I live around CM. I'm not aware of anything particular being exported to China apart from rice and that will not change,

I don't see Chinese tourists.

As for real estate......are the Chinese really buying it up? I don't see any of them mowing lawns.

So are they buying up these new condominiums and lots of land like a remote hidden hand?

If so, how do you know?

I'd be more interested in knowing the indebtedness of the Thai public as a possible precursor to problems.

Anyone know where it's available?

Cheeryble

[doji]

^

I very don't know what Thailand is exporting to china.

But I suspect the Chinese money is what behind the realestate construction booms in Thailand, esp in BKK. They like to invest their capitals in partnership with the thais in realestate (in building houses & condos), and manufacturing. They have been doing this since the beginning of time, but more so lately since their economy took off couple years ago. Farang investments are tiny sum comparing to the Chinese money here. Many thais know that the Chinese own our country (common assumption), no we're not talking about the thai-chinese like many farangs here have been babbling about. I'm talking about BIG MONEY real chineses.

If the bubble bursted in china, I would assume they will cut back their foreign investment,then we will be seeing many unfinished projects here. What will that do to the prices?

I'm not thinking about a few projects, but a few HUNDRED projects here!!!

Like I stated before……this is just my opinion and suspicion.

Edited July 22, 2011 by doji

[Travel2003]

I think in BKK alone, about 3000 units are finished made, ready to sell or rent out, each year.

[TongueThaied]

From the moment I heard of the Thai govenment's "first time home buyers" program, offering first time Thai home buyers loans with no upfront fees and two years free interest, I have been predicitng a bubble and a bursting. It will pop in two years when the financial boom is dropped on these people. A similarly relaxed policy in the US that allowed unqualified buyers into the market was one of the major factors leading to the collapse there.

[trogers]

Depends on local demand (both speculative and real) which in turn is fueled by ease of down payments and obtaining mortgages.

[ericthai]

You might want to check into things a little more. I dont see that much investment from china in Thai real estate. China is investing in Thailand but mostly in industrial and agriculture projects. China is a good investor, but Japan is number one and invest almost double of what China does. Third is the USA. The biggest industry in Thailand is the auto industry which is mostly Japan, but includes Germany and the USA. The auto industry employs over 500,000 people right now and is expanding. If china falls then yes it will effect Thailand, but not in the real estate sector directly. As far as I know there is only 3 Chinese real estate companies in Thailand. One if strictly doing projects in Phuket the other two I believe are operating in Pattaya and Rayong.

I also see land price increases up here in Isaan. The girl the owned the farm land across the street from where my wife owns her farm land just sold 3 rai at 270,000B per rai. i could not believe that, my wife bought her land about 7 years ago for only 30K per rai.

I dont know when the bubble will burst on the farm land if it bursts, with China, India and other countries needing food products to feed their growing populations I dont see it coming down anytime soon and think it will continue to increase. long with food prices.

[xylophone]

Construction is going ahead in leaps and bounds in Patong despite the fact that there are blocks of apartments which have been empty for years, along with shop houses and similar style dwellings. Then there are the barely started developments which have been abandoned for one reason or another, yet new building goes on alongside of them. Add to that the fact that there are many guesthouses with very few if any guests in them (and some for sale) and you have a puzzling situation -- -- why build more?

One reasonably wealthy Thai family I know has said that it is because money is fairly easy to obtain, so why not buy and build!!

If there is a property bubble in the making then, in my opinion, it is certainly evident in Patong.

[morphic]

if the explanation for non stop building, despite lack of end user demand, is ease of credit, presumably at low rates and from banks, then are the banks headed for a fall? at some point a return on investment is always needed to pay off a loan. if the end users, i.e., rent paying tenants, are not there, then how will the loans be repaid?

or, are we judging the end user demand based on low season observations? if so then we may be wrong and the builders may be right.

[johnnyk]

Low season is a falang perspective. The Thai real estate market doesn't dance to the falang band's seasonal rhythm. Thais prefer property and gold to paper.

[richrichie]

Prices for real estate are the convergence of hope and reality

[Pib]

If a bubble exists, it's not a question of "if" the bubble will burst; it's a question of when. Determining the "when" part is the hard part.

[Asianrider]

[

One reasonably wealthy Thai family I know has said that it is because money is fairly easy to obtain, so why not buy and build!!

Thai 101 economics masterclass

[Pib]

One reasonably wealthy Thai family I know has said that it is because money is fairly easy to obtain, so why not buy and build!!

Thai 101 economics masterclass

Or buy the land, begin building a house/building, and then stop half way through completion. I think that is covered in Thai 201 economics as it is so easy to see building/homes almost everywhere that was started but never completed. Some of these building/homes are from the 1997 Asia Financial Crisis, but you can still see plenty of buildings/homes that were obviously started in the last 5 or so years but never completed. My wife refers to this types of uncompleted house as bird houses...great place for wildlife to live.