Softening Of Condo Prices.......

[rgs2001uk]

I'm surprised that no one has mentioned that the Thais are very reluctant to buy a used home, especially if it has been lived in by a farang.

"Thais are very reluctant to buy a used home,"

You need to get out a bit more.

Thais are buying used homes every day.

My friend bought a used one a couple of months ago.

Where I live in Bkk I see Thais selling their houses to other Thais.

[Pinot]

Here is a hard rule:

Never buy property in Thailand. Why would you buy something you'll never own and the price will go down? Rent. Plenty to choose from.

[Thighlander]

I'm surprised that no one has mentioned that the Thais are very reluctant to buy a used home, especially if it has been lived in by a farang.

"Thais are very reluctant to by a used home,"

You need to get out a bit more.

Thais are buying used homes every day.

My friend bought a used one a couple of months ago.

Where I live in Bkk I see Thais selling their houses to other Thais.

My comment was based on my experience doing both a "buy" and a "sale" of a house in Chiang Mai, and actually making a decent profit. I low-balled the Thai sellers, who had been transferred. Money talks........The buyer of my home was a teacher..and it was common knowledge that the thais wouldn't buy homes that had been lived in by farang. A friend built 14 houses at Kao Takiab; not one was purchased by a Thai.

Another question to ask is do crashes occur when there is lots of construction or very little?

http://www.zillow.com/homedetails/2121-W-Royal-Palm-Rd-APT-1065-Phoenix-AZ-85021/68956935_zpid/

[rotary]

Thailand has been in the bubble since 1997 in my opinion and still is

[submaniac]

Well, I would LIKE to believe there is a bubble and there would be a crash...cuz I would be pouncing up to buy if it happens.

But I really don't think there is an imminent crash any time soon. Yes there may be over construction, and yes there may be many vacancies. But what caused the housing crash in the states was the mortgages. People who could not afford homes were getting qualified for loans much more than they could pay (on variable rate interest) driving up the cost of homes for those that could legitimately afford the homes. Then the banks began foreclosing....

I see it differently in Thailand. Alot of the empty condos that are owned are paid for in cash and are owned by people who don't necessarily need to liquidate. Like they can sit there with an empty house and be ok with it. It would be different if these were all mortgaged to the hilt where peole could just walk away. I was around for the big old crash in 1997 and I think the Thais learned their lesson with finance from back then. The USA only recently learned its lesson with its crash.

[Thighlander]

While loan standards have tightened a lot, people are still buying with only 3.5% down. Downpayment may be the biggest indicator of foreclosure risks.

[GAS]

A year on and I still see massive building and what I think must be over supply but no bubble burst yet....I do see slowing in other areas though, and my (good) Thai sources say this is do too political instability, or the possibility of it.

We'll see!!

[Thighlander]

Thais are buying houses with zero down. What do you think median household income in BKK is? I would guestimate 30K.

[Salapoo]

The whole market reminds me of about 6months-1year before the USA bubble collapsed. Im from NY and I would see this exact thing, tons of high end homes being build for a target market that doesn't exists. Theres only so many Thais out there that can afford multimillion baht condos or 60k+ monthly rent.

Thailand doesn't help by scaring people off.

Westerners hacked to death by taxi drivers with samurai swords, visa rules, business ownership, xenophobicism at every turn, completely uncertain future, authorities that anyone can buy, a society just brimming with malcontent (unknowingly) etc etc, there are plenty of other places for Westerners to put money into, I wouldn't advise anyone to come and buy in Thailand.

Edited July 14, 2013 by Salapoo

[GAS]

Thais are buying houses with zero down. What do you think median household income in BKK is? I would guestimate 30K.

Yes and along with all the new cars and consumer credit I am a bit worried.

I had been planning to buy a larger place but the more I think about it I will probably just stay with what I have especially after I do a minor renovation on it.

Seems in most cases condos in BKK will suffer from deflation.

[Salapoo]

Thais are buying houses with zero down. What do you think median household income in BKK is? I would guestimate 30K.

Believe it is around 35k per family in BKK.

Many on a lot more.

Lots and lots on a lot less.

[planr]

Thais are buying houses with zero down. What do you think median household income in BKK is? I would guestimate 30K.

Yes and along with all the new cars and consumer credit I am a bit worried.

I had been planning to buy a larger place but the more I think about it I will probably just stay with what I have especially after I do a minor renovation on it.

Seems in most cases condos in BKK will suffer from deflation.

According to the National Statistics Office, which last carried out a Socio-Economic survey for the country in 2011...

• Average HH Income in Bangkok = 48,951 THB and increasing 5.8% per year since 2007 when the global economy started tanking.
• Average HH Expenditure in Bangkok = 29,969 THB and increasing 4.0% per year since 2007
• Average HH Debt in Bangkok = 218,741 THB and increasing 8.9% per year since 2007 -- bear in mind I bet when numbers are eventually released for 2012 and/or 2013 down the road, this figure will jump rapidly as others have pointed out due to the First Car and First Home policy initiated by the current administration

[Thighlander]

Notice I used the word "median" which is probably going to be somewhat less than average, as there are quite a few mega-wealthy in BKK.

In the BKK Post the other day there was an article about the banks tightening credit standards. It does look like the car incentive is going to bite them in the ass, maybe as much as the rice fiasco, but both way more than the tablet computers.

[planr]

Notice I used the word "median" which is probably going to be somewhat less than average, as there are quite a few mega-wealthy in BKK.

In the BKK Post the other day there was an article about the banks tightening credit standards. It does look like the car incentive is going to bite them in the ass, maybe as much as the rice fiasco, but both way more than the tablet computers.

In a perfect world, useful statistics like median income would be readily available, sadly they are not, as the NSO only seems concerned with averages. That said they do provide averages by quintile, and in Bangkok those averages for the "bottom" 80% fall below the 48K mark I mentioned above. The average monthly HH income in the 60-80 quintle is 43K while the top income bracket as an average of 136K, so you're right, the overall average is certainly skewed by the top earners. And yes, the full impact of the first car policy, let alone other PT initiatives remains to be seen, and I don't think the outcome will be good.

EDIT - Also worth noting is that the top quintile in BKK apparently account for 55.7% of all income generation in the city... so skewed might not be a strong enough word.

Edited July 18, 2013 by planr

[fish fingers]

looking at new build condos, one new development in Ekkamai (soi 65)for example, prices are down from 3.5 to 2.9 (50sqm)in a matter of months.

If new builds are no longer seen as investments, it shd be an interesting 12 months or so.

Edited August 21, 2013 by fish fingers

[isawasnake]

I will freely admit I am not a real estate expert, but coming to any sort of conclusion based in the percentage of lights on in a building I think is dubious at best. Again, I am not going to say I even know what I am talking about, but one guess of mine would be corruption. You make 500,000 baht a day from lord knows what, and you may need a place to put some of that money other than a bank, for many reasons. I really don't see empty units as some big mystery. And I am not saying they are all owned by corrupt thieves, just that it is one option for the many thousands of empty condos we see.

Edited August 21, 2013 by isawasnake