Bank Of Thailand To Keep Close Watch On Real Estate After Seeing Signs Of Speculation

[frankold]

perhaps some canny investors have read the signs and now are looking at the government to slowly deflate the bubble to protect there investments

Bubbles tend to burst rather than deflate ;-)

[NeverSure]

Well neversure and I have posted extensively about the property bubble here in LOS...But we were hailed down by most member as tin foil hat wearing lunies...go figure...

Did it say in the OP that there IS a property bubble?

Must re-read again I guess.

I strongly suggest that you go out tomorrow and buy about a dozen condos for investment. You can't lose. After all, real estate always goes up, and no matter how many units are built or how many vacancies there are, and no matter how many of the units are being bought on speculation by other speculators, you can't lose. No matter how much foreign money comes in to be laundered, it would be very nice of you to help out. No matter that banks will be under water if the value of their loan collateral drops due to a drop in real estate prices, you can't lose. In fact, buy some Thai owned bank stock while you're at it.

Just remember. Real estate always goes up and never crashes. It never has, anywhere. Pay no attention to all of the signs of a bubble, and pay no attention even to news that the banks and government are concerned. You can take that to the bank.

See, I love you so much I just want to help out.

It almost sounds as if you're sarcastic and have bad experience of such a disaster where the banks xxxxxx up big time. Where you from ?

Well, the United States of America where I'm buying real estate for 50 cents on the dollar from banks and individuals who thought that real estate always goes up. Just think of it. Rentals actually pencil now. When people stop buying, or get foreclosed on, they rent. Rental demand is great because unlike Thailand, most of the overbuilding was single family residences and duplexes.

It's amazing, but I can't find out what percentage of Thai bank loans are real estate loans. Not much transparency there. But we do know that three banks are already in trouble just from reports in the news on this forum. One of them had 40% of its loans in real estate.

It's easy to find reports that banks are rolling in profits. Of course they are because they are lending money for real estate, the new car scheme, the new house scheme and the rice scheme like there's no tomorrow. They are also getting very high interest rates which is worrisome. On paper they are rolling in dough due to the accrual accounting system, but if this bubble bursts and they have to eat their collateral at 1/2 what it's worth now, they are tits up. In fact if their collateral drops in value by 20%, the process of fractional banking begins to reverse and they already can't meet their depositors' demands. They also have to correct their accruals and charge off any losses and the snowball is rolling.

Oh wait. They never did charge off all of the loans for condos from 1997 and are still carrying a lot of them on the books as good loans (assets) even though some of the buildings are still empty and some are being torn down.

The Emperor Has No Clothes.

[rubl]

Out of the blue I must admit I never really understood Basel-III
http://en.wikipedia.org/wiki/Basel_III

[bkksiam]

What sorts of measures could (might) they introduce to curb speculation?

Put interest rates back up?

That strategy would only be relevant for curbing local investments and spending by Thais.

For foreign investments/speculation in property are not affected by changes in local interest rates.

Foreign investments in general are (e.g. in bonds) see re. the may 29th cut in the interest rate,

[bkksiam]

Out of the blue I must admit I never really understood Basel-III

http://en.wikipedia.org/wiki/Basel_III

"The Bank of Thailand plans to implement Basel III in phases starting from 2013 onwards. .... Thai banks are now healthy in terms of capital level and profitability and therefore capable of meeting capital requirements in the next few years." see http://www.nationmultimedia.com/opinion/Basel-III-and-its-impact-on-Thai-banking-30196918.html

[bkksiam]

Well neversure and I have posted extensively about the property bubble here in LOS...But we were hailed down by most member as tin foil hat wearing lunies...go figure...

Did it say in the OP that there IS a property bubble?

Must re-read again I guess.

I strongly suggest that you go out tomorrow and buy about a dozen condos for investment. You can't lose. After all, real estate always goes up, and no matter how many units are built or how many vacancies there are, and no matter how many of the units are being bought on speculation by other speculators, you can't lose. No matter how much foreign money comes in to be laundered, it would be very nice of you to help out. No matter that banks will be under water if the value of their loan collateral drops due to a drop in real estate prices, you can't lose. In fact, buy some Thai owned bank stock while you're at it.

Just remember. Real estate always goes up and never crashes. It never has, anywhere. Pay no attention to all of the signs of a bubble, and pay no attention even to news that the banks and government are concerned. You can take that to the bank.

See, I love you so much I just want to help out.

When you invest (in property or stock market )you have to expect to ride a bit of an up down roller coaster. That's less true of property investments than of the market in general. so the point is not to NOT invest but to invest wisely and to -buy in the troughs and cash out on the peaks.

[wooloomooloo]

so the point is not to NOT invest but to invest wisely and to -buy in the troughs and cash out on the peaks.

The credit avalanche is primed. I sit and wait.

[NeverSure]

Out of the blue I must admit I never really understood Basel-III

http://en.wikipedia.org/wiki/Basel_III

"The Bank of Thailand plans to implement Basel III in phases starting from 2013 onwards. .... Thai banks are now healthy in terms of capital level and profitability and therefore capable of meeting capital requirements in the next few years." see http://www.nationmultimedia.com/opinion/Basel-III-and-its-impact-on-Thai-banking-30196918.html

"In phases." That means there is no way in hell they can meet those standards now, and the way they operate, never. "Later" or "Under consideration" is Thai for "Never."

Can't do it. Read the double talk.

Edited June 3, 2013 by NeverSure

[NeverSure]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Edited June 3, 2013 by NeverSure

[noitom]

There are Moo Bans and Condominium projects going up at an alarming rate in Chiang Mai. Where are they going to get all the buyers from... or is it just money laundering???

Money laundering - just the same as original BKK construction boom in the late 80s early 90s.

Edited June 3, 2013 by noitom

[bkksiam]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

alternative and less apocalyptic scenario -The formation of the 2015 ASEAN economic community will create even greater credit demands and put the pressure on for policy changes and reforms that move the banks towards a more regulated system that makes things like "lack of real audits" more difficult and less likely. Expats with their money in european banks will see its value erode and will regret not having put it in fixed assets like property that can ride out the storms. As for Yingluck's populist policies -I'd rather those any day than Greece's or the Uk's austerity budgets.

[chiang mai]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

[jalansanitwong]

No sign of a slow down in Bangkoks west. Housing estates going up everywhere.Some of them are enormous. Theyre even building a new Chinatown out at Bangkae Samsen 2 ,i think theyre calling it.

Plenty of swamp land up for grabs. Develepors paradise expecially in the Eckamai area.

Hi-so gov officials probably dont get out this way too often. They wouldnt want to get dust or storm water on the new Lamborghini.

[stoli]

There are Moo Bans and Condominium projects going up at an alarming rate in Chiang Mai. Where are they going to get all the buyers from... or is it just money laundering???

How do you launder money when heavy investing in some real estate that's not gonna be sold ?

That's like laundering with Vanish

Load the expenses, pay no tax. Wash the cash on property.

But if there will be no buyer, as the poster predicts, then there is no cash .

There are always buyers, just at a different price level. If you are laundering, you won't mind selling at a discount.

[khunron13]

Way to go BoT. You're only about 5 or so years too late!

[Thai at Heart]

What sorts of measures could (might) they introduce to curb speculation?

Put interest rates back up?

That strategy would only be relevant for curbing local investments and spending by Thais.

For foreign investments/speculation in property are not affected by changes in local interest rates.

Foreign investments in general are (e.g. in bonds) see re. the may 29th cut in the interest rate,

Foreign participation in the property market is small in comparison to domestic.

[Thai at Heart]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

Exactly. The bot changing rates or intervening in the market is piddly versus the avalanche of cash sloshing around in the world.

[Thai at Heart]

There are Moo Bans and Condominium projects going up at an alarming rate in Chiang Mai. Where are they going to get all the buyers from... or is it just money laundering???

How do you launder money when heavy investing in some real estate that's not gonna be sold ?

That's like laundering with Vanish

Load the expenses, pay no tax. Wash the cash on property.

But if there will be no buyer, as the poster predicts, then there is no cash .

It is the buyers who are washing cash. Do you really believe that every reasonable sized family business declares all its income?

The way the tax system is structured, the absolute best place to dump illicit cash is into property. Of course, even that has a limit and how many washed house or condos can the little and middle guys buy.

Up country, they reckon at a recent condo launch only 20% of the condos were not for investment purposes. Friends are selling their houses right now and 95% of the viewings are from bangkok for "investment".

Of course, why prices should ever go up when there is massive supply of brand new properties God knows. They need to regulate the off plan market, and stop new projects asap.

[NeverSure]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

Please tell me where I mentioned the current value of the baht? I did say that if the RE market and banks collapsed like they did in '97, that the baht would also crash. I'd say "try to keep up" but it wouldn't do any good.

[NeverSure]

There is a ton of foreign money invested in Thailand. If I want to invest $1,000 in LOS, I have to first buy that much in baht. This alone influences the value of the baht as investors exchange foreign currencies for baht for Thailand.

This can change overnight, depending on perceptions. It can quickly go in the other direction.

[itchybum]

Well neversure and I have posted extensively about the property bubble here in LOS...But we were hailed down by most member as tin foil hat wearing lunies...go figure...

Many won't see it until after it happens. All you can do is warn. Even now with such news we have scoffers. And yes we have long predicted, and the time is getting closer.

Yes, it is getting closer day by day to everything innit?

[Thai at Heart]

There is a ton of foreign money invested in Thailand. If I want to invest $1,000 in LOS, I have to first buy that much in baht. This alone influences the value of the baht as investors exchange foreign currencies for baht for Thailand.

This can change overnight, depending on perceptions. It can quickly go in the other direction.

Well thank God they haven't got a fixed exchange rate as in the nineties. This makes the relative risk of investing in a foreign currency a hell of a lot more obvious and provides a simple mechanism to remove excess pressure from the market. If they had pegged it, that would cause a huge swing should all the money flood back out. At least the movement of the exchange rate reflects demand and supply.

[chiang mai]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

Please tell me where I mentioned the current value of the baht? I did say that if the RE market and banks collapsed like they did in '97, that the baht would also crash. I'd say "try to keep up" but it wouldn't do any good.

So if they did collapse like they did in 97, that would have nothing to do with the value of the Baht ? You're hillarious but go ahead and keep digging and bailing.

[xylophone]

Quote Thai at Heart: "Up country, they reckon at a recent condo launch only 20% of the condos were not for investment purposes. Friends are selling their houses right now and 95% of the viewings are from bangkok for "investment".

Same here in Patong as regards new condo launches, esp in the lower price range...........the majority being bought off the plan for investment purposes by local Thais, with the intention of selling for a profit before completion. Not a good look, when some have to borrow from friends to afford the deposit!!

[marcusd]

There are Moo Bans and Condominium projects going up at an alarming rate in Chiang Mai. Where are they going to get all the buyers from... or is it just money laundering???

I just bought a house. The developer who is a friend says the government has BORROWED so much over the last few years snd fiktered a lot to banks to LEND AT FAVOURABLE RATES to big developers..land h. punna..siri etc... they are buiding on speculation and cheap borrowed government money just the same as before 1997.

And they cant sell.

They are hoping and were hoping for chinese influxes but as the developers buikd and try to SELL the givernment only allows thais to buy and borrow on wages they cannot afford to sustain a mortgage.

Buy if you take a mortgage over tge property in your name or in a BOI company. Otherwise BEWARE

[NeverSure]

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

Please tell me where I mentioned the current value of the baht? I did say that if the RE market and banks collapsed like they did in '97, that the baht would also crash. I'd say "try to keep up" but it wouldn't do any good.

So if they did collapse like they did in 97, that would have nothing to do with the value of the Baht ? You're hillarious but go ahead and keep digging and bailing.

You are something else. I have no idea how you get your ideas, or how you read into things I say what you do. You quoted my statement where I said that if there is a crash like '97, the baht will crash again. It's right above your post.

I may be "hilarious" to you.

I'm not digging and bailing. I have been consistent in my statements and predictions for many months. This thing is coming down.

In '97 the baht was pegged to the dollar. That wasn't the real problem. The problem was the Thai economy, bubbled and burst, and the baht had to float away from the dollar because it simply had no value. Had it not been pegged to the dollar it would have crashed sooner. As soon as it was decoupled from the dollar it crashed.

This time it isn't coupled to the dollar and it will go where the market places it. Inflows of baht into Thailand to buy the SET and real estate and government bonds drive up the value of the baht because every transaction in Thailand has to be done in baht. Foreigners who rush in with capital have to buy baht, driving up the price of the baht. The very day that people want their money out of Thailand, that dynamic will reverse as people sell baht to get Western currencies. That will drive the value of the baht down.

It's just so simple.

[chiang mai]

Still touting the same old nonesence eh NS! Sure the Baht is weakening but it's not because of the rice scheme, the minimum wage or any of the other factors you keep pushing, it's weakening because the easy money resulting from Ben and Abe's capital inflows are reversing as the markets percieve that QE might be comming to an end - it's worth pointing out that exactly the same thing is happening to all the other regional currencies as well as South Africa. And before you tell us that Thai exports are falling in value, yes we know, but they are not falling because of the strong baht or the internal domestic reasons you proclaim, they are falling because Thai trading partners are hitting rough times

There is a positive for farangs who don't own condos or real estate on credit through wives or other in this. A crash will be very similar to 1997. The Thai economy will collapse as will the baht. The farangs who get their money from outside the country will be far better off financially, except those with real estate mortgages in LOS. If something is free and clear it's still a place to live.

The IMF will need to step in again if they will but this time I hope they do stress tests on the banks and tell it like it is. In 1997 a lot of bad loans were hidden due to lack of real audits, and some of those bad loans are still on the books, being carried as perfectly good assets. Some of those assets were torn down or still sit empty while deteriorating, being carried as assets at full value.

Reading the link above about Thailand saying the can't fully implement Base III worldwide bank solvency due to inability to fund SME's is only part of it. They also couldn't fund the rice scheme, the new housing scheme or the car scheme and the economy would collapse even sooner.

Thailand is hiding much of its problems, borrowing and lending into a bubble, and when it begins to go backwards including even a small drop in real estate values, and/or it the true mess of the rice scheme comes to light, people will bail and leave the banks hanging ala 1997. Foreign money will stop and what can will flee and the demand for baht will evaporate on a world scale ala 1997.

The banks have a habit of not selling assets (foreclosed condos etc) at true market value because if they do they have to write off the loss. If they just sit on them and let them deteriorate, they can continue to pretend they are assets and make the bank look good on paper. This is the current situation. Real estate and the rice scheme are the elephants in the living room, but government debts and borrowing are starting to look like Greece.

I've watched countries take a fall including S. European countries and Iceland. Certainly the USA took a major hit in all but a few select areas. There is a lot to be learned from that. When things are going up and expensive, people want to get in on it. But when they crash and no one seems to want them, most people won't recognize a bargain. This is the stock market, real estate, and other investments which are otherwise over depreciated. Most people won't buy when they are cheap. They have to buy when they are high.

I like to go to markets which have crashed but have good fundamentals, or where the cost of replacement of solid assets is greater than the selling price. Of course there has to be hope for an economic recovery or it's a waste of time.

Expats who live on a fixed but foreign income will be back in the driver's seat as prices and the baht lose value against the Western currencies.

And if Abe's plans don't work out things could get seriously nasty later as the bond market freezes and regional banks get hit. But you of course will no doubt continue to blame all of this on the rice scheme, bad property loans by local banks, minimum wage and corruption, it's all getting really old NS, the way you bash Thailand with the same old story. Doubtless when the current economic boom here does come to an end naturally and external and global factors bear down on the Thai economy, you wil be able to tell us all see, I told you so, that minimum wage and the rice scheme were bad moves, crazy indeed.

Please tell me where I mentioned the current value of the baht? I did say that if the RE market and banks collapsed like they did in '97, that the baht would also crash. I'd say "try to keep up" but it wouldn't do any good.

So if they did collapse like they did in 97, that would have nothing to do with the value of the Baht ? You're hillarious but go ahead and keep digging and bailing.

You are something else. I have no idea how you get your ideas, or how you read into things I say what you do. You quoted my statement where I said that if there is a crash like '97, the baht will crash again. It's right above your post.

I may be "hilarious" to you.

I'm not digging and bailing. I have been consistent in my statements and predictions for many months. This thing is coming down.

In '97 the baht was pegged to the dollar. That wasn't the real problem. The problem was the Thai economy, bubbled and burst, and the baht had to float away from the dollar because it simply had no value. Had it not been pegged to the dollar it would have crashed sooner. As soon as it was decoupled from the dollar it crashed.

This time it isn't coupled to the dollar and it will go where the market places it. Inflows of baht into Thailand to buy the SET and real estate and government bonds drive up the value of the baht because every transaction in Thailand has to be done in baht. Foreigners who rush in with capital have to buy baht, driving up the price of the baht. The very day that people want their money out of Thailand, that dynamic will reverse as people sell baht to get Western currencies. That will drive the value of the baht down.

It's just so simple.

"In '97 the baht was pegged to the dollar. That wasn't the real problem".

Oh please stop NS, I can't take it any more, my sides are beging to hurt.

[Thai at Heart]

The fixed peg was exactly the problem. That coupled together a free capital account. Everyone believed that the peg would hold forever, and borrowed to their hearts content in dollars to finance baht projects. When the dollar loans weren't rolled over as before, the rug was pulled.

Today, the fact that the exchange rate can move will mitigate the "boom and the bust". The baht has moved up from 40 to the USD to 28, reached it's peak at 28, as a ceiling, and will wind its way back down to wherever the value lands, instead of the floor being pulled out from below it. That's markets.

[axact]

Well neversure and I have posted extensively about the property bubble here in LOS...But we were hailed down by most member as tin foil hat wearing lunies...go figure...

Did it say in the OP that there IS a property bubble?

Must re-read again I guess.

I strongly suggest that you go out tomorrow and buy about a dozen condos for investment. You can't lose. After all, real estate always goes up, and no matter how many units are built or how many vacancies there are, and no matter how many of the units are being bought on speculation by other speculators, you can't lose. No matter how much foreign money comes in to be laundered, it would be very nice of you to help out. No matter that banks will be under water if the value of their loan collateral drops due to a drop in real estate prices, you can't lose. In fact, buy some Thai owned bank stock while you're at it.

Just remember. Real estate always goes up and never crashes. It never has, anywhere. Pay no attention to all of the signs of a bubble, and pay no attention even to news that the banks and government are concerned. You can take that to the bank.

See, I love you so much I just want to help out.

It's good wholesome advice like this that the newbies to Thailand need, well done, the only thing you should have suggested was that he put all the condos in his new girlfriends name to ensure maximum investment potential.

[GAS]

While I think there is a huge property bubble, and I see many regulars Thai's taking on a lot of debt I am not sure if we can expect a crash and correction...in todays world I imagine the banksters in charge will do what they have done in the US, extend and pretend, distort markets, print money, who knows....

I am going to keep powder dry, some stashed in $, some in baht, some physical PM, I paid cash for my small lil condo which at a million baht has little to no downside. If it blows up, my gig goes with it but I have known all along that this was not sustainable, fun to watch, but not sustainable.