The Condo Bubble

[farang000999]

Definition of 'unemployed'

Those able-bodied people who want to work but can't find an employer.

So

Sick people and ladies having babies are not unemployed.

I know that. It's still impossible to get 0% or .5% unemployment.

http://search.yahoo.com/search?p=why+unemployment+can%27t+be+zero&ei=UTF-8&fr=moz35

Edited October 23, 2012 by farang000999

[chiangmaikelly]

No I said Thailand had a 0% unemployment rate.

I don't know if 29% is accurate. Take it up with the Bank of Thailand.

I think the rest of your post is based on Thailand being like you wrote, "just like all those greeks, Americans, English, Spanish."

I think you mean the PIGS. Do I think Thailand is like the PIGS? NO I don't and no one else does either.

Firstly, i did not write Thailand is like all those greeks, Americans, English, Spanish i said you are. They all thought everything was rosy and there were no asset bubbles just like you. They all thought they were different just like you.

Secondly, its PIIGS not Pigs and America and England do not fall under them so not sure where you got that question from or who you are answering.

thirdly, you cannot say the information you are quoting is true yet you're happy to use it to back up your premise even though it doesn't make any sense. sometimes you need to do more than skim the information but actually analyse it to confirm its validity. Governments can print what ever they want, doesn't mean you should take it at that as if the numbers don't serve their purpose what's to stop them printing other stuff to fool the average joe?

finally, that unemployment number isn't possible as there is always someone looking for a Job you can't have perfect employment where someone get fired and finds a Job in the same day.

Yes you did. You wrote, “just like all those greeks, Americans, English, Spanish” In post number 146. Since I live in Thailand and was writing about Thailand you must mean Thailand. No? If you don't mean Thailand who did you mean?

I thought you meant the PIGS because America and the UK are not really having problems now the same as the PIGS. America and the UK are no where near default and the PIGS are.

The Bank of Thailand information is about 1000% more accurate than a poster on Thai Visa with no education, job or experience in the Thai banking sector.

Thailand has de facto 0% unemployment. Anyone who wants a job can get one in about 30 minutes.

[TommoPhysicist]

Thailand has de facto 0% unemployment. Anyone who wants a job can get one in about 30 minutes.

I agree, but change to ......

"..... Any Thai that wants a job ......"

[roamer]

That 1.3 trill has been around long enough to where it's now regarded as a part of the everyday landscape, if they wait long enough they can inflate the total sum away and in the meantime the IMF will be very happy with the interest payments.

But what concerns me, and I tried to raise this point earlier, is the degree to which non performing loans in Thailand are understated. A BOT report provided by another poster talks of NPL being decreasing to 2.5% of total loans http://www.bot.or.th...2555/n4155e.pdf whislt at the same time, the loan to deposit ratio increased from 72% to 114% (Asian Banker). I find it surprising in a country such as Thailand that the collective loan book increases by over a quarter whilst NPL decrease to such a low level, is it just me or is there a bunch of off balance sheet stuff that completes this picture, apart from the 1.3 trillion that is!

I wonder what kind of regulations and audits the Thai banks have? In developed countries they'd be in place.

Give me a day in a bank and I'll make its books look great if no smart auditor is going to follow me or if there is no law against it, or if possibly no one gives a dimn because someone up there is making a lot of money.

some years ago I knew a British guy, specialist in money laundering who was part of a team that went into the BoT to advise on money laundering. There was no red carpet and it only came about at all because of huge US pressure. Rarely have I ever seen anyone so bemused/gobsmacked/awed at some of the banking practises they discovered.

[chiangmaikelly]

That 1.3 trill has been around long enough to where it's now regarded as a part of the everyday landscape, if they wait long enough they can inflate the total sum away and in the meantime the IMF will be very happy with the interest payments.

But what concerns me, and I tried to raise this point earlier, is the degree to which non performing loans in Thailand are understated. A BOT report provided by another poster talks of NPL being decreasing to 2.5% of total loans http://www.bot.or.th...2555/n4155e.pdf whislt at the same time, the loan to deposit ratio increased from 72% to 114% (Asian Banker). I find it surprising in a country such as Thailand that the collective loan book increases by over a quarter whilst NPL decrease to such a low level, is it just me or is there a bunch of off balance sheet stuff that completes this picture, apart from the 1.3 trillion that is!

I wonder what kind of regulations and audits the Thai banks have? In developed countries they'd be in place.

Give me a day in a bank and I'll make its books look great if no smart auditor is going to follow me or if there is no law against it, or if possibly no one gives a dimn because someone up there is making a lot of money.

some years ago I knew a British guy, specialist in money laundering who was part of a team that went into the BoT to advise on money laundering. There was no red carpet and it only came about at all because of huge US pressure. Rarely have I ever seen anyone so bemused/gobsmacked/awed at some of the banking practises they discovered.

So why even mention anything if you are dealing with innuendo, rumor or lies. Unless you can post some fact all you have said is BS. The US hire a Brit to audit Thai banks. Ya right that's a good one, They should have hired a Swiss.

[sbk]

Enough with the bickering over issues that have nothing to do with the topic. CONDOS remember?

[ace]

I've owned condos in the Pattaya area since 2007. Prices have not increased at all ( sub 2m baht ). Of course I'd prefer it if they had..... But de facto there is no bubble in this segment / area. There may be over-supply but there is also a huge change in the local population with the influx of Russians, Chinese and Thais. And I still maintain that the price of property compared to the standard of living here is excellent.

Sent from my A500 using Thaivisa Connect App

[chiangmaikelly]

2012

The price index for condominiums rose 6.8%

The residential land price index increased by 0.5%

The price index for townhouses rose 3.3%

The BOT has released new rules in response to public anxiety that Thailand faces the risk of another property bubble, particularly in the condominium sector.

The BOT’s new rules take effect in 2011 and 2012.

• for condominium units under THB 10 million (USD330,300), bank loans must be limited to 90% of a home’s value, from January 1 2011
  
• low-rise housing loan-to-value (LTV) ratios are capped at 95%, starting January 1, 2012.
  
• for larger loans, banks must increase risk weighting to between 75% and 100% of the loan value. At present, the risk weighting is set by the BOT for the property sector at 35%.
  

In fact, a bubble is unlikely in the Thai property market as prices have risen naturally in the past three years, according to the Government Housing Bank (GHB), a state-owned lending agency. GHB’s president Khan Prachuabmoh insists that there is nothing unusual in the present situation, despite the substantial recent increases in low-end supply.

Real demand, not speculative demand, exists for low-rise housing below THB 3 million (USD99,100), which accounts for 70% of the market, according to Housing Business Association (HBA) president Issara Boonyong. The remaining 30% of demand comes from investors, who buy homes to generate rental income. The 23,000 registrations of new condo units in the first nine months of 2010, compares with 29,000 registrations of low-rise residences, adds Boonyong.

http://www.globalpro...d/Price-History

Edited October 23, 2012 by chiangmaikelly

[chiang mai]

I've seen only minimal increase in price here in Chiang Mai, I was offered a unit where I live, identical to one that I bought eight years ago at 6.3 mill and sold five years ago at 6.3 mill, for 5.9 mill, condition and furniture accounts for the difference.

I see some units at Rimping Condo in Chiang Mai come to the market at high prices but I never see them sell at such, ditto the units at Riverside, their prices have increased over 2005 but back then they were especially low priced and very few owners were into renovation and flipping so the increase is again justified.

If there is a bubble, and hosently I doubt whether there is, it might exist in the 0.5 mill to 3 mill range where there's lots of competition and price crease is easy to achieve by reducing the square footage of individual builds.

[aussiebebe]

I read that the OP is asking about buying a condo due for completion in 2015, I don't know where it is, but the BTS (the Skytrain) is undergoing continued expansion, so if the condo is anywhere near the proposed routes, it's fair to suppose that these properties will prove popular. I took a drive through Samut Prakarn last week and was shocked by the scale of the extension; I knew they were continuing the BTS down Sukhumvit to Paknam but they are building miles more east to Bang Poo - this will significantly change the area but also people's choices about where they live and how they commute. In my view, it's less a bubble and more about Thai people having more choice about their living and commuting decisions.

[chiang mai]

There's no doubt that anyone who buys off plan, in the right area and at the right time, will make money but the gamble is whether it is indeed the right location/developer/design and whether the buidler will actually complete, none of that is bubble, just straighforward gambling risk management.

[IamNotaNumber]

I think Pattaya got its first Farang around 1970. It has been getting more almost every year since. That's 40 plus years of growth. How long you been here? Just asking...

The first farang in Pattaya would have been much earlier than that. I have been coming here for more than three decades and have lived here for a few years.

Over that time I have seen booms and crashes and everything in between.

[IamNotaNumber]

I've owned condos in the Pattaya area since 2007. Prices have not increased at all ( sub 2m baht ). Of course I'd prefer it if they had..... But de facto there is no bubble in this segment / area.

Some might say that Pattaya prices were over the top in 2007 and they still are.

This would be true especially if you take into account the unreasonably high value of the Baht at the moment. If you realign today's Baht to what it was worth internationally in 2007 then prices here today would look reasonable. As it stands they are perhaps 20-30% over the top in international terms, along with the prices of many other things in Thailand.

[chiangmaikelly]

I think Pattaya got its first Farang around 1970. It has been getting more almost every year since. That's 40 plus years of growth. How long you been here? Just asking...

The first farang in Pattaya would have been much earlier than that. I have been coming here for more than three decades and have lived here for a few years.

Over that time I have seen booms and crashes and everything in between.

That right? Tell us about when the first Farang got to Pattaya. But tell the truth cause someone here may have been the first Farang in Pattaya.

[roamer]

That 1.3 trill has been around long enough to where it's now regarded as a part of the everyday landscape, if they wait long enough they can inflate the total sum away and in the meantime the IMF will be very happy with the interest payments.

But what concerns me, and I tried to raise this point earlier, is the degree to which non performing loans in Thailand are understated. A BOT report provided by another poster talks of NPL being decreasing to 2.5% of total loans http://www.bot.or.th...2555/n4155e.pdf whislt at the same time, the loan to deposit ratio increased from 72% to 114% (Asian Banker). I find it surprising in a country such as Thailand that the collective loan book increases by over a quarter whilst NPL decrease to such a low level, is it just me or is there a bunch of off balance sheet stuff that completes this picture, apart from the 1.3 trillion that is!

I wonder what kind of regulations and audits the Thai banks have? In developed countries they'd be in place.

Give me a day in a bank and I'll make its books look great if no smart auditor is going to follow me or if there is no law against it, or if possibly no one gives a dimn because someone up there is making a lot of money.

some years ago I knew a British guy, specialist in money laundering who was part of a team that went into the BoT to advise on money laundering. There was no red carpet and it only came about at all because of huge US pressure. Rarely have I ever seen anyone so bemused/gobsmacked/awed at some of the banking practises they discovered.

So why even mention anything if you are dealing with innuendo, rumor or lies. Unless you can post some fact all you have said is BS. The US hire a Brit to audit Thai banks. Ya right that's a good one, They should have hired a Swiss.

Don't they have international accountancy firms in your little world ? Anyway what's wrong with me spreading innuendo rumours and lies ? You've already claimed the franchise on ignorance.

[chiang mai]

I've owned condos in the Pattaya area since 2007. Prices have not increased at all ( sub 2m baht ). Of course I'd prefer it if they had..... But de facto there is no bubble in this segment / area.

Some might say that Pattaya prices were over the top in 2007 and they still are.

This would be true especially if you take into account the unreasonably high value of the Baht at the moment. If you realign today's Baht to what it was worth internationally in 2007 then prices here today would look reasonable. As it stands they are perhaps 20-30% over the top in international terms, along with the prices of many other things in Thailand.

The problem is not the Baht, it's the value of the currencies that it's compared to, all have fallen by over 30% in value, it's hardly Thailands fault that their currency is sound whilst GBP/USD/EURO are not.

[NeverSure]

Some might say that Pattaya prices were over the top in 2007 and they still are.

This would be true especially if you take into account the unreasonably high value of the Baht at the moment. If you realign today's Baht to what it was worth internationally in 2007 then prices here today would look reasonable. As it stands they are perhaps 20-30% over the top in international terms, along with the prices of many other things in Thailand.

The problem is not the Baht, it's the value of the currencies that it's compared to, all have fallen by over 30% in value, it's hardly Thailands fault that their currency is sound whilst GBP/USD/EURO are not.

This part I don't get. No disrespect, I just don't get it.

In 1997 the baht was pegged to the US dollar for international trading at 25b per dollar. It had been that way for some time.

In layman's terms that simply means it took only 25 b to buy a dollar. That's a relatively valuable baht. Today it takes about 31 baht to buy a dollar which is a pretty steep international drop in the trading value of the baht.

Not only is that a statement that the baht has fallen considerably against the international trading currency, but it's even worse because the dollar has also fallen.

Another thing that nags at me is the apparent lack of accountability for Thailand. Who knows what the true picture is inside the banks, and other financial institutions, or within the government itself?

[chiangmaikelly]

I wonder what kind of regulations and audits the Thai banks have? In developed countries they'd be in place.

Give me a day in a bank and I'll make its books look great if no smart auditor is going to follow me or if there is no law against it, or if possibly no one gives a dimn because someone up there is making a lot of money.

some years ago I knew a British guy, specialist in money laundering who was part of a team that went into the BoT to advise on money laundering. There was no red carpet and it only came about at all because of huge US pressure. Rarely have I ever seen anyone so bemused/gobsmacked/awed at some of the banking practises they discovered.

So why even mention anything if you are dealing with innuendo, rumor or lies. Unless you can post some fact all you have said is BS. The US hire a Brit to audit Thai banks. Ya right that's a good one, They should have hired a Swiss.

Don't they have international accountancy firms in your little world ? Anyway what's wrong with me spreading innuendo rumours and lies ? You've already claimed the franchise on ignorance.

You wrote something that is a product of your imagination. Anyone can make up anything. Unless you can substantiate your rumor it is just that an unsubstantiated rumor. Back it up. Are we supposed to believe that an agency of the US government was allowed to inspect Thai banks. Don't be silly. The US can't even get permission to study the weather in Thailand. No one believes the Thais would let them into a bank. You are just starting anti Thai rumors. Typical of the Thai bashing crowd. Not everyone who posts on Thai Visa is naive enough to believe it. You also wrote, "You've already claimed the franchise on ignorance." Nice flame!

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

[chiang mai]

You have to view the currency fluctuation in the context of time, 25 to 51 took about a week, 51 to 31 took many many years. So you would have to pick a point in time and compare the two currencies then rather than at the end of a journey over time. It's worth pointing out however that if THB were left to its own devices, it would be back a lot closer to 25 than it is currently, it's only the continued intervention by the BOT that keeps it at its current weaker level.

Edited October 23, 2012 by chiang mai

[samran]

Anyone who has ever read an intro to macroeconomics textbook knows that 0% or .5% unemployment is impossible and illogical.

Indeed, not sure who made the claim of 0% unemployment, but it is pretty silly. They better go off and look up the concept of the 'natural rate of unemployment'. Even amongst the most employable of people, there will always be those who are between jobs in the most of the strongest of economies.

From memory, the natural rate of unemployment generally bounces around 2% to 4% depending on labour market mobility and flexibily

[samran]

Don't they have international accountancy firms in your little world ? Anyway what's wrong with me spreading innuendo rumours and lies ? You've already claimed the franchise on ignorance.

You wrote something that is a product of your imagination. Anyone can make up anything. Unless you can substantiate your rumor it is just that an unsubstantiated rumor. Back it up. Are we supposed to believe that an agency of the US government was allowed to inspect Thai banks. Don't be silly. The US can't even get permission to study the weather in Thailand. No one believes the Thais would let them into a bank. You are just starting anti Thai rumors. Typical of the Thai bashing crowd. Not everyone who posts on Thai Visa is naive enough to believe it. You also wrote, "You've already claimed the franchise on ignorance." Nice flame!

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

The US Treasury had embedded at the MOF for a long time people who were there to advise on debt policy. Amongt that was looking at what to do with NPL's left over from the 97 crisis. One of them went on to work at the Thai Bond Market Association.

How do I know this? I was there.

Plenty of foreign funded advisors across government at different times.

[chiangmaikelly]

Anyone who has ever read an intro to macroeconomics textbook knows that 0% or .5% unemployment is impossible and illogical.

Indeed, not sure who made the claim of 0% unemployment, but it is pretty silly. They better go off and look up the concept of the 'natural rate of unemployment'. Even amongst the most employable of people, there will always be those who are between jobs in the most of the strongest of economies.

From memory, the natural rate of unemployment generally bounces around 2% to 4% depending on labour market mobility and flexibily

Pretty much a semantic argument. Anyone who wants a job in Thailand can get one. This is not the case in Spain. Thailand has 0% unemployment Spain has 25%

[chiangmaikelly]

Don't they have international accountancy firms in your little world ? Anyway what's wrong with me spreading innuendo rumours and lies ? You've already claimed the franchise on ignorance.

You wrote something that is a product of your imagination. Anyone can make up anything. Unless you can substantiate your rumor it is just that an unsubstantiated rumor. Back it up. Are we supposed to believe that an agency of the US government was allowed to inspect Thai banks. Don't be silly. The US can't even get permission to study the weather in Thailand. No one believes the Thais would let them into a bank. You are just starting anti Thai rumors. Typical of the Thai bashing crowd. Not everyone who posts on Thai Visa is naive enough to believe it. You also wrote, "You've already claimed the franchise on ignorance." Nice flame!

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

The US Treasury had embedded at the MOF for a long time people who were there to advise on debt policy. Amongt that was looking at what to do with NPL's left over from the 97 crisis. One of them went on to work at the Thai Bond Market Association.

How do I know this? I was there.

Plenty of foreign funded advisors across government at different times.

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

[samran]

Don't they have international accountancy firms in your little world ? Anyway what's wrong with me spreading innuendo rumours and lies ? You've already claimed the franchise on ignorance.

You wrote something that is a product of your imagination. Anyone can make up anything. Unless you can substantiate your rumor it is just that an unsubstantiated rumor. Back it up. Are we supposed to believe that an agency of the US government was allowed to inspect Thai banks. Don't be silly. The US can't even get permission to study the weather in Thailand. No one believes the Thais would let them into a bank. You are just starting anti Thai rumors. Typical of the Thai bashing crowd. Not everyone who posts on Thai Visa is naive enough to believe it. You also wrote, "You've already claimed the franchise on ignorance." Nice flame!

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

The US Treasury had embedded at the MOF for a long time people who were there to advise on debt policy. Amongt that was looking at what to do with NPL's left over from the 97 crisis. One of them went on to work at the Thai Bond Market Association.

How do I know this? I was there.

Plenty of foreign funded advisors across government at different times.

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

where has anyone mentioned 'inspectors'?

All that was mentioned was that the BOT took on advisors - presumably to advise on money laundering policies and safeguards. Not inspectors.

All I said was that it wasn't uncommon for the Thai government to have foriegn sponsored advisors.

I was one of them. I'm friends with another one, a now ex US Treasury fellow. Advising the senior tier of bureacrats on debt policy.

As for telling any more, why should I? I might as well as give the forum my real name and address.

Edited October 23, 2012 by samran

[chiangmaikelly]

You wrote something that is a product of your imagination. Anyone can make up anything. Unless you can substantiate your rumor it is just that an unsubstantiated rumor. Back it up. Are we supposed to believe that an agency of the US government was allowed to inspect Thai banks. Don't be silly. The US can't even get permission to study the weather in Thailand. No one believes the Thais would let them into a bank. You are just starting anti Thai rumors. Typical of the Thai bashing crowd. Not everyone who posts on Thai Visa is naive enough to believe it. You also wrote, "You've already claimed the franchise on ignorance." Nice flame!

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

The US Treasury had embedded at the MOF for a long time people who were there to advise on debt policy. Amongt that was looking at what to do with NPL's left over from the 97 crisis. One of them went on to work at the Thai Bond Market Association.

How do I know this? I was there.

Plenty of foreign funded advisors across government at different times.

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What year did this happen and what did the inspectors find and what agency did they work for?

where has anyone mentioned 'inspectors'?

All that was mentioned was that the BOT took on advisors - presumably to advise on money laundering policies and safeguards. Not inspectors.

All I said was that it wasn't uncommon for the Thai government to have foriegn sponsored advisors.

I was one of them. I'm friends with another one, a now ex US Treasury fellow. Advising the senior tier of bureacrats on debt policy.

As for telling any more, why should I? I might as well as give the forum my real name and address.

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What specifically are you talking about. If it is not on topic then why post it? A moderator said in post #156, "Enough with the bickering over issues that have nothing to do with the topic. CONDOS remember?"

[chiang mai]

This threads's unecessarily agressive and argumentative to be of value any more, shame because there's a topic there that's worth airing, if only it were allowed to be so, I'm out.

[samran]

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What specifically are you talking about. If it is not on topic then why post it? A moderator said in post #156, "Enough with the bickering over issues that have nothing to do with the topic. CONDOS remember?"

So are you implying I am making up what I have just said?

[chiangmaikelly]

Some might say that Pattaya prices were over the top in 2007 and they still are.

This would be true especially if you take into account the unreasonably high value of the Baht at the moment. If you realign today's Baht to what it was worth internationally in 2007 then prices here today would look reasonable. As it stands they are perhaps 20-30% over the top in international terms, along with the prices of many other things in Thailand.

The problem is not the Baht, it's the value of the currencies that it's compared to, all have fallen by over 30% in value, it's hardly Thailands fault that their currency is sound whilst GBP/USD/EURO are not.

This part I don't get. No disrespect, I just don't get it.

In 1997 the baht was pegged to the US dollar for international trading at 25b per dollar. It had been that way for some time.

In layman's terms that simply means it took only 25 b to buy a dollar. That's a relatively valuable baht. Today it takes about 31 baht to buy a dollar which is a pretty steep international drop in the trading value of the baht.

Not only is that a statement that the baht has fallen considerably against the international trading currency, but it's even worse because the dollar has also fallen.

Another thing that nags at me is the apparent lack of accountability for Thailand. Who knows what the true picture is inside the banks, and other financial institutions, or within the government itself?

It was around 40 baht to the dollar for 5 years. 40 baht to the dollar was normal from 2000 to 2005. Then the dollar crashed and the baht gained to around 30. If you have information other than folk tales about problems inside of Thai financial institutions that effect the condo bubble please list them.

[sbk]

This threads's unecessarily agressive and argumentative to be of value any more, shame because there's a topic there that's worth airing, if only it were allowed to be so, I'm out.

Indeed and if it keeps up its going to get closed.

[chiangmaikelly]

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What specifically are you talking about. If it is not on topic then why post it? A moderator said in post #156, "Enough with the bickering over issues that have nothing to do with the topic. CONDOS remember?"

So are you implying I am making up what I have just said?

BTW in the unlikely event that you are not just making stuff up and you feel that irregular banking practices effect the fictitious condo bubble. What specifically are you talking about. If it is not on topic then why post it? A moderator said in post #156, "Enough with the bickering over issues that have nothing to do with the topic. CONDOS remember?"

I don't how much clearer I can be. If you just want an off topic flame fest stop posting. If you have anything relevant to the topic about the banking industry post it.