Pocket calculator wisdom

[swissie]

Slowly but surely potential investors find out that if ever they would have to rent out the property, the yield would be in the vicinity of a ordinary bank deposit in many "Hyped-up" areas.

That is, if a "renter" can be found in the first place. No renter= no yield.

Still having good connections to a number of real-estate agents in Pattaya: Employees have been instructed to strictly go with the "price-increase-modus" per square meter over the last 5 years and block yield-calculations as soon as they may come up.

"Johnnie come lately investors": Fasten your seat-belts! You may end up holding the bag and always remember: A bursting bubble is never announced by trumpets and pipers in advance.And nobody will ring a bell beforehand. It happens overnight, therefore, carefully planned exit-strategies are bound to fail. Can not sell into a market where there are no more buyers around.

Cheers.

[petertucker48]

What is your point !!!

[ktm jeff]

A valid point i found. Before people invest in property , one would hope/presume they knew the realistic annual returns verses other investments (presuming they have/can get, tenants -long or short term).Bank pay interest rates of up to 4-5% but property will/may go up in value.The old saying "never invest more than you can afford to lose" is something to consider , although what to do with the rest of your money - i dont know!.

[Suradit69]

"Johnnie come lately investors": Fasten your seat-belts! You may end up holding the bag and always remember: A bursting bubble is never announced by trumpets and pipers in advance.And nobody will ring a bell beforehand. It happens overnight, therefore, carefully planned exit-strategies are bound to fail. Can not sell into a market where there are no more buyers around.

Too bad you didn't share this bit of wisdom with everyone in America and Europe about 8 years ago... including all the banks, government agencies and pension funds that mindlessly bought toxic mortgage-back-securities packaged with AAA ratings by Moody's, Fitch and S&P.

Edited March 30, 2014 by Suradit69

[falang07]

And may I ask, why are Moody's, Fitch and S&P still in the business after they gave AAA ratings to those toxic securities? Aren't we living in a strange world?

[swissie]

"Johnnie come lately investors": Fasten your seat-belts! You may end up holding the bag and always remember: A bursting bubble is never announced by trumpets and pipers in advance.And nobody will ring a bell beforehand. It happens overnight, therefore, carefully planned exit-strategies are bound to fail. Can not sell into a market where there are no more buyers around.

Too bad you didn't share this bit of wisdom with everyone in America and Europe about 8 years ago... including all the banks, government agencies and pension funds that mindlessly bought toxic mortgage-back-securities packaged with AAA ratings by Moody's, Fitch and S&P.

Because they convinced each other, that there is plenty of "Johnnie come lately" investors around, to hop aboard to keep the merry go round going.

The rating agencies knew that THEY would not be the final "bagholders". (We have done everything to the best of our knowledge and ability). Case closed.

Boom and bust. Anything new?

- A year ago long beans sold for 45 Bht a kilo at the local market. Now it's 9 Bht per kilo. Boom and bust on a small scale.

Will the current R/E Boom in Thailand be the exception to the rule ? What do you think ?

Cheers.

[worgeordie]

I don't think you can relate vegetables to the property market,weather been

a big input on supply and price of vegetables.

Property bubbles in Thailand don't explode like in the West,they slowly deflate

only to rise at even higher value in the next cycle, banks here are not as

aggressive on foreclosing on defaults as the are in the West.

regards Worgeordie

[PattayaPhom]

Still plenty condos with an ROI of 9%.....maybe you have talked to those that bought in the wrong location or developement, or maybe just peeved off you missed the boat and havnt got enough wedge to join the party....by the way, vegatables are always priced according to crop....

[swissie]

In a free market there is only one rule: SUPPLY and DEMAND. Applies to vegetables, pork-bellies as well as condominiums.

At what stage are we currently in the Thai RE-Market?

- The ground floor?

- The ripening stage? (Somewhat "fair pricing").

- The final stage? (I must leap into the market, because otherwise I will miss out on lavish profits in the future).

Cheers.

[PattayaPhom]

In a free market there is only one rule: SUPPLY and DEMAND. Applies to vegetables, pork-bellies as well as condominiums.

At what stage are we currently in the Thai RE-Market?

- The ground floor?

- The ripening stage? (Somewhat "fair pricing").

- The final stage? (I must leap into the market, because otherwise I will miss out on lavish profits in the future).

Cheers.

Exactly, so according to crops and time of year will determine supply...demand is the same, hence the fluctuation in prices of fruit and vegetables.

[trogers]

Still plenty condos with an ROI of 9%.....maybe you have talked to those that bought in the wrong location or developement, or maybe just peeved off you missed the boat and havnt got enough wedge to join the party....by the way, vegatables are always priced according to crop....

ROI of 9% measured on prices of yesteryears? Looking at prices of new launches, I believe annual rental yields have now fallen below 5% while bank deposit rates have climbed above 3% pa.

And the number of new launches have fallen more than 25% as developers face slower sales and higher rejection rates by banks on mortgage applications, thus, suffering higher resale units.

The property bubble has been deflating since late last year.

[PattayaPhom]

VT1/2 plus Rimhad.....9% after deductions.....