Kittiratt believes Thailand will not face real estate bubble

[petedk]

I do some work for a property evaluation company and earlier this year all the evaluators in the company agreed that there was a glut of overpriced condos.

They predictec that at the end of this year or early next year the bubble would burst.

Many of the presales for new condos are to the same few investors and now these investors aren't able to rent them out or sell them.

Sent from my GT-N5100 using Thaivisa Connect Thailand mobile app

[klauskunkel]

He believes.

I believe I can fly...ooops!

[Dante99]

He said no bubble, that is his announcement of a bubble.

[little mary sunshine]

I'm really shocked this forum isn't "flooded" with comments by developers and

real estate agents telling everyone how wonderful the real estate market is in

Thailand, more lies, lies,lies from these people.

[timewilltell]

The development cycle in Thailand is for the bottom of the previous cycle being met with a few entrepreneurs who develop with a fairly short term view. They make money as the sector recovers and people spanked by the previous bubble finally struggle to their feet. The process continues until everyone is trying to get in on the fortunes to be made by which time the savvy investors are pulling out or consolidating. Then development continues because people are slow to wise up whilst the world cycle turns into a recessionary cycle and the western shift to consolidation finally hits home.

Thailand through the slow uptake of most people continues rushing onwards towards the brick wall when liquidity dries up, the banks foreclose and snatch back the properties because the Thais would rather have all four limbs severed than accept less than they paid for the property and the land office will not accept a sale at face value to be less than the price originally purchased for in some bizzare logic they employ here.

Then the banks have a load of assets on their books no-one can afford to pay for, that is illegal to sell to foreigners who by this time are ahead of the cycle and ready to invest again and the banks will refuse to sell because to materialise a loss on their books of the original loan plus all their interest would be a terrible loss of face. So the government steps in and takes all those properties into the 'Bad Asset' bank and leaves the Thai banks smelling of roses to do the same scam again. Meanwhile the taxpaper - that is the middle to low classes here since the rich pay almost zero in tax - picks up the tabs for all the unsaleable properties which go into the next round like some poor loser qualification.

It is just a merry go round with the banks never on the losing end. It happens in the west too except for the fact that banks and lenders will out the property auction, realise the loss and move on because there is no face issue.

The bubble is here now and it will be soon pricked.

[umbanda]

Real estate bubble in Thailand is different than in western countries and is already happening with more and more foreclosures in sight...but....may be a good opportunity for foreigners....I can see the Government changing the rules for property ownership in Thailand, just to help bank sells pre owned houses Thai people are not buying...Just wait to see....Thailand still a good target for real estate investors...

[stoffel45]

Some of you may remember the skylines in Bangkok and Pattaya in 1995 - 1997. From a high spot wherever one looked the view was dominated by High rise construction cranes.

The boom came to an end. Thousands of hi-so family members with trunk loads of Thai baht streamed to Singapore for the disparity in the rate - knowing from their "Uncles" in high places - that the baht was going to nosedive - soon. The baht didn't just cling on - it appreciated to 24.6 to 1US$.

Then Korea, victim to the same greed and incompetence - slipped. The Koreans blamed Siam Cement for demanding payment. That was the first domino - the others followed in rapid succession.

Roll forward to 2013. From any high spot, wherever one looks the skyline is dominated by high rise cranes......

The baht, though shivering, recovers, even improves.

Thanks Mr Kittirak, I can recall Banharn Silpa Archa exclaiming how strong the economy was, that new properties in Suphanburi were still available.

It all crashed then - as it will this year or next. Soon.

Any of you - take a look at the "new condos" in the evening. No or not many lights in the windows. Once again - the Banks, often at the urging of "Cousins" in Finance or property development - part company with their customers' money and lend to build a property which is worth 300 million when fully rented or sold on - but worth very little when the customers, the buyers, the renters just are not there and never will be.

Then we enter the fantasy world of "NPLs" Non- Performing Loans. The Banks don't dare to auction off the properties or put them on the market at the dreaded Market Value - or their balance sheets take too massive a hit.

It is coming Mr Kittirat and well you and your "Cousins" know it.

Last month in Pattaya a condo owner told me I could have her apartment for only 12 million baht. I told her, "Yes and if I come back in a year I might consider 5 million and you would take it."

Edited September 28, 2013 by stoffel45

[monty1412]

How sad it is that just about none of the TV respondents here believe or ascribe any degree of credibility to this mans words.

Trouble is do any of us here in TV land have any modicum of respect for this countries politicals leaders and the statements that ridiculously and regularly spew from their mouths... rice isn't a problem, traffic isn't a problem, human rights not an issue, extortion of tourists via jet ski or taxi mafia not an issue, corruption not a problem, problem at the airport or with rail system.... lets exorcise some demons responsible....

Thailand wants to be a hub of just about anything... lets however give credit to one hub that I think they are world masters of... it could be called the hub of self denial rather I think its more apt to just call it the hub of sweeping it under the nearest som tam mat....

I fret about this situation not ,because I also recognise that the whole Thai ethos and philosophy enable me to live a freer and easier life than I would back home.

But sometimes, just sometimes Id like to see a little bit of a stance by a politician that does not smell of fiscal interest and is truely for the betterment of peoples lives.

[sangfroid]

Kittirat only needs to tour the Pattaya region to realise the hollowness of his words. Buildings going up everywhere, completed projects sitting empty. Vast numbers of them. In my mooban, 10% of the houses are for sale and have been for a very long time, while a dozen or more houses for rent are gathering dust. Kittirat gives far too much credibility to the banks, which have the history to prove him wrong (1997, Mr K?)

At Central Rama 9 the SCB are having a promotion,. Buy one get one free! eg buy a town house and get an apartment free. Buy one block of land get another, also free.

Advertising posters are on display with photographs and the prices of the available properties .

[davejones]

Prices don't seem t be going up much/at all, so how can there possibly be a bubble. All I see is massive oversupply and massive amounts of new condos being built.

[Asiantravel]

Time to consult the spirits again to see what they say on the subject

[Skywalker69]

"The finance minister needs to |lie sometimes to create good feelings. The world knows this as a 'white lie'. As leader of |the government's economic team, I'm allowed to tell white lies.

this is what he has said in the past.

Kittiratt's 'white lie' will put govt claims in doubt

http://www.nationmultimedia.com/opinion/Kittiratts-white-lie-will-put-govt-claims-in-doubt-30189085.html

Whom can beleive this guy?

[marell]

BANGKOK, 28 September 2013 (NNT) – The Finance Minister has expressed his confidence that Thailand will not be faced with real estate bubble, believes banks have plans to cope with the situation.

Wait a minute. This guy is the Finance Minister of the entire country and he believes that banks have plans to cope with a real estate bubble? Believes? Sounds like someone who doesn't like to ask questions he doesn't want to know the answers to.

Edited September 28, 2013 by marell

[ratcatcher]

Is there no-one out there willing to come to the support of "Porky pie" Kittirat?

Surely someone in the PTP fan club can agree with his predictions and beliefs and tell us we are all cynics and doubters?

[Baerboxer]

"..believes banks have plans to cope with the situation."

beilef can be far away from certainty..

indeed, you just need to look on the banks repossessed property lists to see how right he is!

I've seen several properties repossessed in our Moobaan this year. Most were bought just after the last flood as our Moobaan was kept dry whilst most area around badly flooded. The builders cashed in on this and put the prices up so people bought expensive houses, plus the new premium and were heavily mortgaged. They all had nice SUVs and Merc which were also on credit. Many of our friends and neighbours admit to doing this - maximum mortgage, maximum car loan. If something happens on their incomes, they are screwed quickly.

Same recipe that caught many Westerners out in 2008.

[Baerboxer]

Is there no-one out there willing to come to the support of "Porky pie" Kittirat?

Surely someone in the PTP fan club can agree with his predictions and beliefs and tell us we are all cynics and doubters?

Well, given his propensity for white lies, being economical with the truth, fudging figures and actually claiming its allowed for finance people to do this - then probably unlikely anyone outside of PTP would come to his support. The PM/DM and her brother obviously support him because he didn't get re-shuffled.

Based on his performance so far, he will have no trouble finding a position in the international banking world when he quits politics - how's that for support !

[trainman34014]

Member of my Mrs family has worked for a certain bank for 12 years. She says that house repossession's are running at an all time high since she has been there. There is also the matter of a high number of people failing to keep up with loan payments on cars/trucks/motorbikes.

Seems Thailand may well become the HUB of unpaid debts !

[siampolee]

I believe I can fly...ooops!

Perhaps it isn't a bubble bursting but the wax holding the whole financial setups wings together is melting due to the hot money rushing out of Thailand.

Those flying high investors who remain here are indeed in for '' a cash crash landing.''

Best perhaps described as ''An Icarus Moment''

[Emdog]

Kittirak seems to suffer from typical Bangkok myopia, as in "Bangkok is Thailand" and if Bangkok is okay, who cares what is happening in the rest of the country?

[Loles]

But if will ... som nam na.

[12DrinkMore]

Kittirat only needs to tour the Pattaya region to realise the hollowness of his words. Buildings going up everywhere, completed projects sitting empty. Vast numbers of them. In my mooban, 10% of the houses are for sale and have been for a very long time, while a dozen or more houses for rent are gathering dust. Kittirat gives far too much credibility to the banks, which have the history to prove him wrong (1997, Mr K?)

That does not define a bubble, more an oversupply or overpriced housing selling into a small demand. It indicates that in those areas house price deflation is required to move the property, but owners, if not desperate to sell, tend to hang on hoping for an eejit to come along and buy. In a bubble all those properties would be sold in a flash and the prices would be going up at 15% each year.

A bubble occurs when every Somchai is piling into the housing market because he is absolutely convinced that house prices will rise immediately and forever.

Thailand is not in bubble territory.

But some areas are overpriced against the demand.

[Local Drunk]

Sorry Xonax... I hit the wrong button or something and your post ended up here

Sorry Mr. Kittiratt, but I'm from L.A. and I and most of the posters here are from a nation that have suffered an untold loss into the trillions, and it was to a tee; all about real estate speculation and very bad loans. I've seen your dog and pony show more times more times than I can remember. Unless you have a better grasp on your development, and have stiffer regulations on loans, you're going to go down.

Edited September 28, 2013 by Local Drunk

[boomerangutang]

Somebody should build a condo building up here in Chiang Rai. There are farang eager to buy a condo or two, but zero supply. Some large apartment buildings are being built here, but they're all 'one-size-fits-all' single hotel room sizes, with no kitchenettes. It's odd that all the condo apartments catering to farang are being built in southern tourist areas, as if 100% of condo-buying farang are in those few cities.

Actually, I don't care that much, it just seems strange that there's no supply to meet demand. I spoke with aThai fellow who was building a 100 unit apartment building, and recommended he halve the # of rooms and double their size. He listened for a moment, but didn't take my advice. 5 years later, his occupancy rate is in single digits.

For me: I bought rural property near town for a pittance, 15 years ago. I live in a rent-free home I buildt myself, in the middle of a sizable park-like forest, so am in a different realm, literally.

[IMA_FARANG]

What I want to see published is:

• Not the number of housing unite available for sale
• Not the number of housing units sold
• but instead the number of housing units actually OCCUPIED by the owner. (as a percentage of sold or available units)

That is because I believe that many of these so-called housing units are being bought for investment purposes only and are not occupied by the owners.

That is to say the owners don't actually live in their "investment" units.

To me that is the first indication of a housing "bubble".

I suspect that that occupied units figure is less than 50% of the available units in many housing developments especially around Bangkok.

In my opinion if less than 50% of the available units (whether "sold" or not ) are not actually occupied by their owners I would call that housing development a place not to invest in or buy property in.

And it seems that most "real estate salesmen" are very reluctant to answer that very question even if asked directly by potential buyers.

[Local Drunk]

What I want to see published is:

• Not the number of housing unite available for sale
• Not the number of housing units sold
• but instead the number of housing units actually OCCUPIED by the owner. (as a percentage of sold or available units)

That is because I believe that many of these so-called housing units are being bought for investment purposes only and are not occupied by the owners.

That is to say the owners don't actually live in their "investment" units.

To me that is the first indication of a housing "bubble".

I suspect that that occupied units figure is less than 50% of the available units in many housing developments especially around Bangkok.

In my opinion if less than 50% of the available units (whether "sold" or not ) are not actually occupied by their owners I would call that housing development a place not to invest in or buy property in.

And it seems that most "real estate salesmen" are very reluctant to answer that very question even if asked directly by potential buyers.

I just want to say that the housing bubble is nothing compared to the failure of banks for bad loans and then having them crying for bailouts from the govt to save the mom and pop savings accounts. You don't have to be an economist to see it coming. My ex wife made a fortune in foreclosures.

Edited September 29, 2013 by metisdead

[vijer]

Well there is a condo project just outside of Bangkok that has maybe 4000 units and it is empty. There is a big office complex near me that is almost empty and has had a for sale sign on it for a couple years now. And they are building about 10,000 units within about 10k of my home. Nope no potential for a housing bubble.

[vijer]

What?! Sorry TV said I did have permission to post, but now it is showing my post!

Edited September 28, 2013 by vijer

[vijer]

What I want to see published is:

• Not the number of housing unite available for sale
• Not the number of housing units sold
• but instead the number of housing units actually OCCUPIED by the owner. (as a percentage of sold or available units)

That is because I believe that many of these so-called housing units are being bought for investment purposes only and are not occupied by the owners.

That is to say the owners don't actually live in their "investment" units.

To me that is the first indication of a housing "bubble".

I suspect that that occupied units figure is less than 50% of the available units in many housing developments especially around Bangkok.

In my opinion if less than 50% of the available units (whether "sold" or not ) are not actually occupied by their owners I would call that housing development a place not to invest in or buy property in.

And it seems that most "real estate salesmen" are very reluctant to answer that very question even if asked directly by potential buyers.

Ya, I see crazy signs all over when I am driving that say 15-26% return on your investment!! 55555

A friend of mine moved into a new rental and got a great deal because there are so many vacant units.

[Rimbuman]

Prices don't seem t be going up much/at all, so how can there possibly be a bubble. All I see is massive oversupply and massive amounts of new condos being built.

Agree, so it also is a matter of perception. Through western glasses real a state in Thailand is not that expensive at all and "asking " prices seem to be stable at the moment. Still the oversupply you mention is really here and growing and this will regardless if the Thai like it or not going to reflect in the market prices. Perception will adjust to reality not the other way around, even in Thailand.

Just hold on, observe and pick up the pieces.

[realenglish1]

Yes I remember when President Bush the 2nd said that the Economy was in good shape .Let me see I think that was in 2008 Yes that is right

Wow how time flies and how things change

Good luck Mr Kittiratt Say it enough times and everyone will start to believe it