Thailand Safe From Property Bubble, Says Banker

[davejones]

These are same bankers who caused the West financial disasters sent from-would like to know

So what did the Kasikorn guy have to do with the Western financial crisis?

[xylophone]

Quote bkk-mike: "Actually - that isn't what happened in the US.

What happened in the US was that banks and finance companies sold on their loans to investment banks that bundled them up into securities, and because they were no longer holding the loans themselves, some of them virtually stopped checking if people were actually able to pay the mortgages they were taking out".

Almost right, but one key point missing and that is the fact that the loans that were bundled into securities and sold by the investment banks all over the world were the high risk/sub-prime mortgages that were most likely to be in trouble because the banks had lent up to 120% of the value of the house.

They kept the "best" loans for themselves, whereas they needed to off load the potentially poor performing ones before they actually became that, and sure enough they did after they were bundled up by the unscrupulous investment bankers looking to make yet another dollar.

Just as an aside, the credit rating issued to these securities (CDOs) was terribly misleading and worked on an almost unfathomable mathematical calculation, and as such the credit rating agencies were also culpable, very much so.

But back on topic, and as I have posted here before, the property market in Phuket, certainly Patong, HAS to be in the end stages of a bubble.......huge new apartment construction going on whilst many hundreds if not thousands remain empty; small hotels and guest houses being built "on spec" and remaining unsold, whilst new ones are constructed alongside and many lessees of the smaller establishments just walking away.

And staring these new builders in the face is the fact that I could now buy back the two-storey townhouse which I sold for 5.3 million baht two years ago, for 4 million baht, and there are many more similar stories around here.

I believe what I see and very little of what I hear or read about from the real estate developers and the like, who are only in the business of promoting their product.

[Thai at Heart]

Quote bkk-mike: "Actually - that isn't what happened in the US.

What happened in the US was that banks and finance companies sold on their loans to investment banks that bundled them up into securities, and because they were no longer holding the loans themselves, some of them virtually stopped checking if people were actually able to pay the mortgages they were taking out".

Almost right, but one key point missing and that is the fact that the loans that were bundled into securities and sold by the investment banks all over the world were the high risk/sub-prime mortgages that were most likely to be in trouble because the banks had lent up to 120% of the value of the house.

They kept the "best" loans for themselves, whereas they needed to off load the potentially poor performing ones before they actually became that, and sure enough they did after they were bundled up by the unscrupulous investment bankers looking to make yet another dollar.

Just as an aside, the credit rating issued to these securities (CDOs) was terribly misleading and worked on an almost unfathomable mathematical calculation, and as such the credit rating agencies were also culpable, very much so.

But back on topic, and as I have posted here before, the property market in Phuket, certainly Patong, HAS to be in the end stages of a bubble.......huge new apartment construction going on whilst many hundreds if not thousands remain empty; small hotels and guest houses being built "on spec" and remaining unsold, whilst new ones are constructed alongside and many lessees of the smaller establishments just walking away.

And staring these new builders in the face is the fact that I could now buy back the two-storey townhouse which I sold for 5.3 million baht two years ago, for 4 million baht, and there are many more similar stories around here.

I believe what I see and very little of what I hear or read about from the real estate developers and the like, who are only in the business of promoting their product.

Its all about who ends up holding the baby.

Is it the banks, is it the developers or is it the consumer holding a property which is underwater in terms of value to loan, and then can these consumers fund the repayments?

I always find it very funny that these things start with the banks being relatively conservative with their loans, and then as business improves they reduce their restrictions to keep the thing moving. As I wrote, somewhere else, just stop funding the building of an endless supply of new stuff to limit supply and help prices stay firm.

[AnotherOneAmerican]

On a slightly separate but related topic: my wife applied for a credit card and was turned down by three Thai banks beofre she was finally accepted by Bangkok Bank, I stayed out of the entire business. But Mrs CM earns around THB 28k a month and I supply housing and living costs hence the money she earns is hers to do with pretty much as she wants and this was reflected in the credit card application. Now it would seem to me that Mrs CM is a pretty good credit risk, she's been in her employment with Chedi Hotels for three years, she has a stable work history prior, she has no bad credit marks anywhere and she has borrowed previously for a car loan which was subsequently repaid - MRs CM also has my financial backing so I would have expected the banks to jump at the chance of giving her a credit card, but not so, it was actually quite hard for her to get one bevause she'd never had one before. So when I see that kind of behaviour out of the banks and someone tells me that easy credit is in abundance, I have to stop and look at the gap between our views, my view, based on first hand evidence is that credit is available but it's not exactly being handed out free of charge on every street corner, the banks are doing due diliigence.

Banks don't like lending money to women married to foreigners. They are often considered a bad credit risk.

Assumptions are made, on the virtue of the woman, the stability of the marriage, and her ability to move to another country.

A Thai family has nowhere to run.

Edited May 9, 2013 by AnotherOneAmerican

[chiang mai]

On a slightly separate but related topic: my wife applied for a credit card and was turned down by three Thai banks beofre she was finally accepted by Bangkok Bank, I stayed out of the entire business. But Mrs CM earns around THB 28k a month and I supply housing and living costs hence the money she earns is hers to do with pretty much as she wants and this was reflected in the credit card application. Now it would seem to me that Mrs CM is a pretty good credit risk, she's been in her employment with Chedi Hotels for three years, she has a stable work history prior, she has no bad credit marks anywhere and she has borrowed previously for a car loan which was subsequently repaid - MRs CM also has my financial backing so I would have expected the banks to jump at the chance of giving her a credit card, but not so, it was actually quite hard for her to get one bevause she'd never had one before. So when I see that kind of behaviour out of the banks and someone tells me that easy credit is in abundance, I have to stop and look at the gap between our views, my view, based on first hand evidence is that credit is available but it's not exactly being handed out free of charge on every street corner, the banks are doing due diliigence.

Banks don't like lending money to women married to foreigners. They are often considered a bad credit risk.

Assumptions are made, on the virtue of the woman, the stability of the marriage, and her ability to move to another country.

A Thai family has nowhere to run.

I don't believe that for one moment and I reckon you just made that up! The reasons we uncovered for my wife's repeated rejection was that about half of her monthly income comes to her by way of the hotel service charge and this is not a fixed or guaranteed amount.

Edited May 9, 2013 by chiang mai

[vijer]

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.

We looked at a development off On Nut that had clearly been built over 5-10 years ago and I would guess 60% of the houses were vacant. The sales office wasn't willing to reduce the price even a little.

Around the area we now live in I see a lot of condos and townhouses going up and some that are complete and they don't seem to be fully occupied. Same with several of the new buildings for businesses, two that went up about 8 months ago are still 90% vacant and yet I see land owners getting ready to build more.

My wife and her dad think the value of our house will tripple in 5 years?!? Crazy Thai thinking.

[Naam]

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.

We looked at a development off On Nut that had clearly been built over 5-10 years ago and I would guess 60% of the houses were vacant. The sales office wasn't willing to reduce the price even a little.

Around the area we now live in I see a lot of condos and townhouses going up and some that are complete and they don't seem to be fully occupied. Same with several of the new buildings for businesses, two that went up about 8 months ago are still 90% vacant and yet I see land owners getting ready to build more.

My wife and her dad think the value of our house will tripple in 5 years?!? Crazy Thai thinking.

a part of Jomtien Beach was for several years (1998-2002) a graveyard as far as real estate was concerned. i was interested to buy a 3-bedroom apartment which was offered for USD 85,000 but refrained because the clause Thai/Foreigner 51:49% did not exist.

in 2005 we were interested to rent an identical apartment (same building but different floor). it was also for sale... price USD 345,000.

i rest my case.

[Thai at Heart]

Well, the other paper is reporting on a meeting between the BOT and major developers that the developers claim there is no bubble (well they would wouldn't they). However, an addition is that the developers are becoming cooler on construction in the provinces.

[NeverSure]

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.

We looked at a development off On Nut that had clearly been built over 5-10 years ago and I would guess 60% of the houses were vacant. The sales office wasn't willing to reduce the price even a little.

Around the area we now live in I see a lot of condos and townhouses going up and some that are complete and they don't seem to be fully occupied. Same with several of the new buildings for businesses, two that went up about 8 months ago are still 90% vacant and yet I see land owners getting ready to build more.

My wife and her dad think the value of our house will tripple in 5 years?!? Crazy Thai thinking.

a part of Jomtien Beach was for several years (1998-2002) a graveyard as far as real estate was concerned. i was interested to buy a 3-bedroom apartment which was offered for USD 85,000 but refrained because the clause Thai/Foreigner 51:49% did not exist.

in 2005 we were interested to rent an identical apartment (same building but different floor). it was also for sale... price USD 345,000.

i rest my case.

What happened yesterday is no predictor of what will happen tomorrow, and this is one place that inexperienced investors get burned.

To compare a rise in price from the bottom (1998) into a recovery (2005) to a further bubble into 2013 just won't cut it. Buy low, sell high.

Sure, there were opportunities in 1998. Who can doubt that? But to use 2005 which is getting nigh onto 8 years ago to the rise between then and now, and factor in the massive building in the meantime, just isn't relevant today.

It's a nonsensical post.

[vijer]

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.

We looked at a development off On Nut that had clearly been built over 5-10 years ago and I would guess 60% of the houses were vacant. The sales office wasn't willing to reduce the price even a little.

Around the area we now live in I see a lot of condos and townhouses going up and some that are complete and they don't seem to be fully occupied. Same with several of the new buildings for businesses, two that went up about 8 months ago are still 90% vacant and yet I see land owners getting ready to build more.

My wife and her dad think the value of our house will tripple in 5 years?!? Crazy Thai thinking.

a part of Jomtien Beach was for several years (1998-2002) a graveyard as far as real estate was concerned. i was interested to buy a 3-bedroom apartment which was offered for USD 85,000 but refrained because the clause Thai/Foreigner 51:49% did not exist.

in 2005 we were interested to rent an identical apartment (same building but different floor). it was also for sale... price USD 345,000.

i rest my case.

What happened yesterday is no predictor of what will happen tomorrow, and this is one place that inexperienced investors get burned.

To compare a rise in price from the bottom (1998) into a recovery (2005) to a further bubble into 2013 just won't cut it. Buy low, sell high.

Sure, there were opportunities in 1998. Who can doubt that? But to use 2005 which is getting nigh onto 8 years ago to the rise between then and now, and factor in the massive building in the meantime, just isn't relevant today.

It's a nonsensical post.

Not to mention beach real estate is very different than real estate in Bangkok and the outlying areas. And of course chainarong said it was for sale, asking price was 345,000, that doesn't mean it sold for that amount.

[Naam]

Not to mention beach real estate is very different than real estate in

Bangkok and the outlying areas. And of course chainarong said it was for

sale, asking price was 345,000, that doesn't mean it sold for that

amount.

nobody said it sold or would have sold. fact is that these two prices are

tangible indicators. in the meantime prices in the Pattaya area for prime

beachfront have risen moderately, prices for detached homes have dropped.

disclaimer: this is one of my usual nonsensical postings. the boys living in

BKK or in the wilderness of the U.S. midwest surely have more insight in

any bubble that concerns Thailand.

Edited May 9, 2013 by Naam

[robertson468]

Trust me iam a banker !!!!!!!

... and the cheque is in the mail, I guess

And if you don't believe me I can send you a photocopy!

[robertson468]

I believe the criteria Banks use for lending money is how much goes in to your account monthly, regardless of what collateral you might have. So anyone who has two or three Bank Accounts just keeps rotating it round and round to make it look like there are thousands of baht going in each month. If they can view six months of good performance, you will probably get your loan of several million baht. I know a Senior Civil Servant who did this and once he secured his loan he turned Developer. His Wife ran the Business on the principal that the money lends me the money to build the Houses and when they are sold, I spend the money - sadly they went Bankrupt!

[Unkomoncents]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

[chiangmaikelly]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

http://www.globalpropertyguide.com/investment-rating

Thailand, Moderate to good.

UK London, very poor.

US NY, poor.

Russia Moscow, very poor.

Australia Sydney, poor.

Hope this helps you.

[sustento]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

http://www.globalpropertyguide.com/investment-rating

Thailand, Moderate to good.

UK London, very poor.

US NY, poor.

Russia Moscow, very poor.

Australia Sydney, poor.

Hope this helps you.

Not really. You're comparing a whole country with a bunch of cities.

[chiangmaikelly]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

http://www.globalpropertyguide.com/investment-rating

Thailand, Moderate to good.

UK London, very poor.

US NY, poor.

Russia Moscow, very poor.

Australia Sydney, poor.

Hope this helps you.

Not really. You're comparing a whole country with a bunch of cities.

Sorry, my fault. I should have said Thailand Bangkok, Moderate to good.

Edited May 10, 2013 by chiangmaikelly

[blazes]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

http://www.globalpropertyguide.com/investment-rating

Thailand, Moderate to good.

UK London, very poor.

US NY, poor.

Russia Moscow, very poor.

Australia Sydney, poor.

Hope this helps you.

This link was not in the least bit helpful. It refers to "buy-to-own" situations worldwide. It's interesting, at least, but I wonder how many of us on here have enough money sloshing around to be contemplating whether to buy to rent in Argentina or Belgium or or or.....

[Thai at Heart]

The other paper reports that 3 major banks have stopped offering zero money down mortgages.

[chiangmaikelly]

Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data. Also, it would be nice to hear things like "There's no housing bubble in Thailand..." pronounced by independent, third-party observers and economists from countries with reputations for openness. No matter what Chatchai's credentials may be, he will always be a Thai talking about the conditions in Thailand. That makes him about as credible as witness with cataracts.

http://www.globalpropertyguide.com/investment-rating

Thailand, Moderate to good.

UK London, very poor.

US NY, poor.

Russia Moscow, very poor.

Australia Sydney, poor.

Hope this helps you.

This link was not in the least bit helpful. It refers to "buy-to-own" situations worldwide. It's interesting, at least, but I wonder how many of us on here have enough money sloshing around to be contemplating whether to buy to rent in Argentina or Belgium or or or.....

The post that I was answering said, " Still waiting to read an article about the housing market in Thailand that isn't a blatant attempt at obsfuscating facts by simply drowning the reader in numbers and data." The link that I posted lists gross rental yeild per annum and long term investment rating by an independant observer. In other words a real review and not an attempt at obsfuscating facts as the poster asked for. In evaluating any international market it is necessary to compare it to other markets. I can't just say Bangkok is great without looking at other cities or it makes no sense. Bangkok has a gross rental yeild of 6.53% is that good or bad? London is 3.43%. So I guess we could make the statement that compared to London, Bangkok has a better gross rental yeild which is a valid economic real estate measurement. It all relates back to, Does Thjailand have a property bubble and which parts of the world are most attractive for property investment.

Long Term Investment Rating is based on many factors:

• Gross rental yield
• Income tax
• Capital gains tax
• Round-trip transaction costs
• Potential landlord and tenant problems
• Long-term GDP growth
• Potential over-supply
• Affordability
• A view of long-term appeal to investors

I think the Global property guide is an unbiased source not like some local Thai media and it rates Bangkok Moderate to Good.

Edited May 10, 2013 by chiangmaikelly

[dcutman]

The other paper reports that 3 major banks have stopped offering zero money down mortgages.

It also reports a bank is getting a government bailout of Bt9 billion, because of excessive NPL's. There was an article some time back in the same, other, paper that many/most of the state banks have been miss/under reporting NPL's.

[Thai at Heart]

The other paper reports that 3 major banks have stopped offering zero money down mortgages.

It also reports a bank is getting a government bailout of Bt9 billion, because of excessive NPL's. There was an article some time back in the same, other, paper that many/most of the state banks have been miss/under reporting NPL's.

Will search for that one. Seems they are trying to slow down property business to prepare for an interest rate cut.

[dcutman]

The other paper reports that 3 major banks have stopped offering zero money down mortgages.

It also reports a bank is getting a government bailout of Bt9 billion, because of excessive NPL's. There was an article some time back in the same, other, paper that many/most of the state banks have been miss/under reporting NPL's.

Will search for that one. Seems they are trying to slow down property business to prepare for an interest rate cut.

Sorry T@H, it is Bt 6 billion bailout not 9 billion.

http://www.pattayamail.com/business/finance-min-injects-6-billion-baht-to-support-islamic-bank-25839

[NeverSure]

The other paper reports that 3 major banks have stopped offering zero money down mortgages.

It also reports a bank is getting a government bailout of Bt9 billion, because of excessive NPL's. There was an article some time back in the same, other, paper that many/most of the state banks have been miss/under reporting NPL's.

Will search for that one. Seems they are trying to slow down property business to prepare for an interest rate cut.

Sorry T@H, it is Bt 6 billion bailout not 9 billion.

http://www.pattayamail.com/business/finance-min-injects-6-billion-baht-to-support-islamic-bank-25839

Oh well, then. Only bt 6 billion.

With all of this booming real estate, banks should be rolling in dough, and not needing a single satang. It's a leak in the dam so small you can stop it with your finger.

[chiang mai]

Just two points to keep in mind, in order to keep these things in perspective:

The 6 billion is Baht and not Dollars, 6 Bill sounds a lot but 215 million Dollars sounds a lot less, in banking terms.

Also, Islamic Bank, Government Savings Bank and Krung Thai are owned by the Thai governement and are not managed/monitored by the BOT. It's therefore pretty safe to suggest that what ever the state of the finances/balance sheets of those three banks is they not representative of the Thai banking sector as a whole.

[NeverSure]

Not to mention beach real estate is very different than real estate in

Bangkok and the outlying areas. And of course chainarong said it was for

sale, asking price was 345,000, that doesn't mean it sold for that

amount.

nobody said it sold or would have sold. fact is that these two prices are

tangible indicators. in the meantime prices in the Pattaya area for prime

beachfront have risen moderately, prices for detached homes have dropped.

disclaimer: this is one of my usual nonsensical postings. the boys living in

BKK or in the wilderness of the U.S. midwest surely have more insight in

any bubble that concerns Thailand.

No Naam, that's a good and informative post. That's helpful.

And if you're referring to me, I don't know anyone in the "wilderness" of the US Midwest (where's that?) nor do I live in the Midwest, and I just spent a month touring Thailand.

There is so much corruption in Thailand, and bankers have been making so much money on this real estate development, that I don't know who to believe. I think I'll believe my own lying eyes when I saw all of the vacancies. Massive vacancies and old ones too, but massive new construction.

Now is the rumbling of people unable to sell homes and condos for anywhere near what was being asked by developers, and the rumblings of banks in trouble.

Not to change the subject just for the sake of it, but the Agricultural Bank should be broke by now. It has a loss of 700 billion (with a baht on the rice scheme so far, with that scheme set to continue. The geniuses who run Thailand have not only ruined its rice export business, but they've turned it into a big expense by first paying way too much, and now having to warehouse it while it rots.

These are the same geniuses who tell me there is no real estate bubble when my own two lying eyes know better.

[NeverSure]

Just two points to keep in mind, in order to keep these things in perspective:

The 6 billion is Baht and not Dollars, 6 Bill sounds a lot but 215 million Dollars sounds a lot less, in banking terms.

Also, Islamic Bank, Government Savings Bank and Krung Thai are owned by the Thai governement and are not managed/monitored by the BOT. It's therefore pretty safe to suggest that what ever the state of the finances/balance sheets of those three banks is they not representative of the Thai banking sector as a whole.

Thailand is already running huge deficits and having to borrow to pay for it. Where do they get the money to bail out those banks, and the Agricultural Bank for the rice scheme?

And who say's it isn't representative of the whole? How do we know that? We see the empty houses and condos and we know that banks are up to their eyeballs in them. We know that banks are still carrying unrealized losses from 1997. We can sense that sales and values of real estate have already slipped.

How much do we need to hear?

[dcutman]

Just two points to keep in mind, in order to keep these things in perspective:

The 6 billion is Baht and not Dollars, 6 Bill sounds a lot but 215 million Dollars sounds a lot less, in banking terms.

Also, Islamic Bank, Government Savings Bank and Krung Thai are owned by the Thai governement and are not managed/monitored by the BOT. It's therefore pretty safe to suggest that what ever the state of the finances/balance sheets of those three banks is they not representative of the Thai banking sector as a whole.

Thailand is already running huge deficits and having to borrow to pay for it. Where do they get the money to bail out those banks, and the Agricultural Bank for the rice scheme?

And who say's it isn't representative of the whole? How do we know that? We see the empty houses and condos and we know that banks are up to their eyeballs in them. We know that banks are still carrying unrealized losses from 1997. We can sense that sales and values of real estate have already slipped.

How much do we need to hear?

SME Bank is looking for a Bt3 or Bt4 billion bailout as well. as I said

above, many of the State banks are in trouble with bad assets, but are

not reporting them, correctly, or at all . (story in the other paper "Bad loans at state banks") Of course the govt is going to keep this quiet as possible, and sugar coat it as much as possible. Sort of like Chiang Mai is doing in post #145. I can only guess this make private banks a bit uncomfortable.

Edit: Another story.

http://www.establishmentpost.com/non-performing-loans-hit-thailand-banks/

Edited May 10, 2013 by dcutman

[Naam]

NeverSure

These are the same geniuses who tell me there is no real estate bubble when my own two lying eyes know better.

i heard real estate bubble when when prices were skyrocketing and i hear real estate bubble when there is an oversupply (prices have been and are still dropping) e.g. in Thailand. without a common denominator or definition of "bubble" a discussion makes no sense.

in this context i don't understand the ridiculous rumour that real estate prices have risen 39% above estimated inflation during the last years. i have no idea what the markets in other concentrated urban areas are doing but i am rather well informed what's going on in the "greater Pattaya" area. here we have an oversupply bubble for both detached homes and condos with prices well below cost of new construction and far below construction cost prevailing 8-9 years ago.

some few exceptions (luxury condos prime seafront) exist as far as prices are concerned. however, the occupation/sold quota is extremely low.

[Thai at Heart]

NeverSure

These are the same geniuses who tell me there is no real estate bubble when my own two lying eyes know better.

i heard real estate bubble when when prices were skyrocketing and i hear real estate bubble when there is an oversupply (prices have been and are still dropping) e.g. in Thailand. without a common denominator or definition of "bubble" a discussion makes no sense.

in this context i don't understand the ridiculous rumour that real estate prices have risen 39% above estimated inflation during the last years. i have no idea what the markets in other concentrated urban areas are doing but i am rather well informed what's going on in the "greater Pattaya" area. here we have an oversupply bubble for both detached homes and condos with prices well below cost of new construction and far below construction cost prevailing 8-9 years ago.

some few exceptions (luxury condos prime seafront) exist as far as prices are concerned. however, the occupation/sold quota is extremely low.

It's very regionally sensitive obviously. I think you are correct, that there is a contradiction. There is a bubble in supply not prices per se.

As I said, it all depends who ends up holding the baby.

They need to get a handle on supply and move the unsold stock before building more.

Edited May 10, 2013 by Thai at Heart