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Thailand Safe From Property Bubble, Says Banker


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Thailand safe from property bubble, says banker
By English News

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BANGKOK, May 8 – Thailand’s property market remains secure without any sign of a bubble or oversupply, according to the executive vice president of Kasikorn Bank.

Chatchai Payuhanaveechai said 102,000 new housing units were built last year, a 19 per cent increase year-on-year, while 107,000 units were sold in the same period, representing a 30 per cent increase.

A total of 129,000 units were unsold last year, lower by 4 per cent from 2011. From 2009 to 2011, 130,000 units were unsold each year.

He said the higher housing prices were due to surging costs at 12 per cent since the second quarter of last year with prices of single houses increasing by 3 per cent, townhouses by 2 per cent and condominiums by 6 per cent.

Higher labour costs and land prices in Bangkok and the outskirts, particularly land near the Skytrain, have resulted in escalating housing prices, he said.

Non-performing loans for houses below Bt5 million have decreased from 2.4 per cent in 2011 to 2.3 per cent last year.

The purchase ratio of houses below Bt5 million is 30 per cent with cash and 70 per cent with loans while acquisitions of houses above Bt5 million by cash and loans are equal.

He said the country’s property market will grow this year with overall housing loans at Bt2.45 trillion, a 8.5 per cent increase from last year.

Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said. (MCOT online news)

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-- TNA 2013-05-08

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I think it is time to close that Kasikorn account if this nob is managing it.

If and prices doubling yearly is not a bubble building up to burst, well <deleted> is?

Edited by Chao Lao Beach
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Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said.

A 10% rise in individual NPL, time to cancel those weekday tee-offs, old boy.

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Not surprising, with over three Quarters of the population in the poor house, there is only basically one section of the population able to buy, I have plenty of units ,houses in the estate around me, most are vacant, since being built seven years ago, some are now getting that Adams family haunted look about them.coffee1.gif

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Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said.

A 10% rise in individual NPL, time to cancel those weekday tee-offs, old boy.

That is a really bad indicator - 11% higher than last year, so what was last year 10%??? They are making bad loans on overpriced property people can't afford.... Ummm that is the beginning of a bubble...

These are personal loans. Although what they are secured on, who knows, cars, chanotes????

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whistling.gif My (irrelevant?) question is this:

Of those newly built units that are being sold what percentage is being bought by the buyers as a residence and what percentage of those newly built sales are in fact being bought NOT as a residence but as an "investment" or as rentals (renting to others for income).

As someone else mentioned in his post on this topic quite a few of the units in his area were apparently not occupied by the buyers, but were being held as "investments" for the future,

The buyers seem to be betting their money on a continuing rise in prices.

But are any units actually selling (i.e. re-sales), and what percentage of those investment units is actually re-selling?

The answer to that question is the answer whether the growth in a healthy upsurge in the Thai real estate market, and a speculative bubble in the same market.

rolleyes.gif

Well precisely. Of course, in the rest of the world they get around this by having people declare a main residence, and others differently, but it is extremely convenient, if you happen to have a large wedge of dirty money sitting around, to plop it into bricks and mortar.

Not to say, that literally hundreds of thousands of people exist in a cash only existence, where taxes and the such aren't ever part of the equation. Why on earth they would grant loans to people wanting to buy houses as investments as opposed to those buying houses to live in on the same terms, is a question that he as a banker should be able to answer.......

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We should all be thankful that there are so many real bankers and economists on this forum ready to ridicule the opinion of others probably in a better position to give an opinion.

Don't believe that there are any real bankers on this forum, thank god for that.

The real bankers are the ones that caused the crisis that is going on in the world these days, and write for the very same reason articles like the OP.

Of course.

The bloke from Kasikorn bank has a vested interest in saying that there is no property bubble. Whether there is one or not I don't know, but I would not listen to the musings of bank leaders or a Real estate spruiker on the subject.

Indeed a truly objective view would be worth just a tad more. How many corporate loans does he have out to developers I wonder?

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I think it is time to close that Kasikorn account if this nob is managing it.

If and prices doubling yearly is not a bubble building up to burst, well <deleted> is?

prices haven't even doubled the last 10 years.

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I think it is time to close that Kasikorn account if this nob is managing it.

If and prices doubling yearly is not a bubble building up to burst, well <deleted> is?

prices haven't even doubled the last 10 years.

House build prices haven't doubled in the last 10 years.

Land prices in and around CM have increased x10 in the past 10 years.

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A total of 129,000 units were unsold last year, lower by 4 per cent from 2011. From 2009 to 2011, 130,000 units were unsold each year.

Now this statement is open to two interpretations. Does that there mean there is a stock of 390,000 unsold houses sitting in the pipeline from 2009 onward? Or that the total of unsold stock at the end of each year was 130,000?

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"Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said. (MCOT online
news)"

Just to head this one off at the pass: NPL's increase in accordance with the growth in lending and since personal loans grew year on year, the forecast NPL figure is trending downwards, as is the reported property NPL figure.

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"Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said. (MCOT online

news)"

Just to head this one off at the pass: NPL's increase in accordance with the growth in lending and since personal loans grew year on year, the forecast NPL figure is trending downwards, as is the reported property NPL figure.

Well, yes, but this is a little like the difference between the income statement and the balance statement of a company. Forecasting NPL, one would imagine to be extremely difficult. Previous performance is no gurantee of future returns.

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Heard the same sentiments just before the 1997 Asian financial meltdown. The USD went from 25/1TB to over 50.

Thai property owners couldn't off-load their property quick enough. And property was a bargain - Half Price!

It's like a Ponzi Scheme - don't be the last one to try to sell your inflated priced property. You'll be the looser, and the Condo/Estate developer who sold it to you will be the winner.

In Pattaya, some Residential property has been on the market for years and can't be sold. When the house or condo is finally sold, it is at a loss of 20-40 percent. Sure the Low-end, under 1M condos are being flogged by the developers to the Russians. But Russians are used to living in 30 square meter closets in the "Mother-land". Let "Igor" and "Natashka" try to sell their closet after a few years.No way except to another Igor and Natashka.

The condo/estate developers from the Middle East and India will rake it in as usual, The buyers will be gutted like the fish they are.

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