Is the Pattaya housing/condo bubble about to burst?

[Gsxrnz]

Several factors will delay the inevitable bursting of the condo bubble.

1. The recent weakening of the Baht is making it a little more affordable for foreigners to buy compared to the last couple of years. This has/will hold up the sales of new condos to some extent for a limited period.

2. The weakness of the baht also makes it less attractive for foreigners to sell existing condos, particularly those that may want to convert their baht to their home currency. Foreigners (in general) measure their condo value in their home currency as opposed to the Baht price they paid, therefore lessening their willingness to sell, and also seeing them asking a higher price to give them the home currency value they "need" irrespective if they are going home or not.

3. Their is definitely an increase in the upper-lower and lower-middle classes in Thailand that are beginning to impact slightly on the condo market, particularly in the tourist areas. While this is not impacting on the 49% rule, it is fuelling developers into taking a bullush and long term position on building condos. They use the foreign 49% to fund themselves initially, expecting that in a 5 to 10 year period, the Thai 51% will eventually be taken up at prices that compensate the developer for the time value of money.

4. The Russian influence has also held up prices as they are new to the market and holding up the sales figures that might otherwise have fallen over the last 5 years. This demand is also contributing to developer expectations and encourages them to maintain the stock level at bullish levels. The developers are expecting considerable increases in the Russians purchasing condos.

5. The "asian" perspective of value will always hold prices up, despite the reality of the supply demand curve dictating that prices should go south. Thais are extremely reluctant to sell anything for less than they paid for it, and once they have a fixed idea of value in their heads they will rarely deviate. They have relatively no idea of the time value of money. This artificially holds up prices even though sales may be relatively depressed. It totally screws the supply/demand theory of pricing and production.

6. There is little doubt that there is a fair proportion of dirty money being used to build condos. They don't therefore care about the time value of money, nor indeed do they care about recovering their investment in the short term.

Just my opinions - but the bubble will burst eventually

[watcharacters]

Right... condo bubble burst... did I not read that last year... and the year before last year... and the year before the year before last year... t.b.c.....

.

Turning the page would help.

[whitethai]

What good condos are available right now to buy and price?@

I could have bought one near Beach Road on 2007 for 23 grand UK but not had the cash then.

Also I just saw Alan Bolton the condos are prety ceap per month to rent but then if taking ladies back its not like hotel check

Edited July 4, 2014 by whitethai

[i claudius]

Right... condo bubble burst... did I not read that last year... and the year before last year... and the year before the year before last year... t.b.c.....

the condo bubble burst is one of the favourite topics of people who have no idea how Thai property investors think and were they can sink/hide easily "surplus" cash

You are so condescending Naam ,in 24 years i have run a buisness here(not a bar) and well know where black money is hidden , i know your very old and think you know everything ,but there are some of us who are just as "knowing" about Thailand as you . so please stop posting as if your the all knowing oracle and discuss things , by the way i have gout and am not in a good mood.

Edited July 4, 2014 by i claudius

[Rimmer]

One post using derogatory slang terms for British people has been removed also a quoted reply

[Pdaz]

I just want to know which airline is selling business class seats to UK for only 65k Baht ?

I usually fly Emirates and they haven't been less than 100k for 6 or more years.

[Naam]

Right... condo bubble burst... did I not read that last year... and the year before last year... and the year before the year before last year... t.b.c.....

the condo bubble burst is one of the favourite topics of people who have no idea how Thai property investors think and were they can sink/hide easily "surplus" cash

You are so condescending Naam ,in 24 years i have run a buisness here(not a bar) and well know where black money is hidden , i know your very old and think you know everything ,but there are some of us who are just as "knowing" about Thailand as you . so please stop posting as if your the all knowing oracle and discuss things , by the way i have gout and am not in a good mood.

i was not talking about peanuts black money a foreigner can make by running a business in Thailand. i also don't think that stating facts can be called condescending. there was no mentioning that i know more than oldtimers.

my advice: stop your ridiculous attacks and stick to your paramount daily worries (well documented in this forum) whether the Pound gains or loses a few Baht.

[Naam]

the condo bubble burst is one of the favourite topics of people who have no idea how Thai property investors think and were they can sink/hide easily "surplus" cash

Do you mean Thai property investors or investors in Thai property? Or both?

Yes, there is a lot of grubby money "invested" in Thai condos, but there are also a lot of buyers using perfectly clean money, and also Thai buyers using easy credit. If any of those groups suddenly needed to pull out the domino effect might be impressive.

i mean Thai property investors but the other category might well exist. i don't know of any other country where you can transfer any amount of money and buy property without any specific questions asked, neither by a bank's compliance department nor by the taxman.

[i claudius]

Right... condo bubble burst... did I not read that last year... and the year before last year... and the year before the year before last year... t.b.c.....

the condo bubble burst is one of the favourite topics of people who have no idea how Thai property investors think and were they can sink/hide easily "surplus" cash

You are so condescending Naam ,in 24 years i have run a buisness here(not a bar) and well know where black money is hidden , i know your very old and think you know everything ,but there are some of us who are just as "knowing" about Thailand as you . so please stop posting as if your the all knowing oracle and discuss things , by the way i have gout and am not in a good mood.

i was not talking about peanuts black money a foreigner can make by running a business in Thailand. i also don't think that stating facts can be called condescending. there was no mentioning that i know more than oldtimers.

my advice: stop your ridiculous attacks and stick to your paramount daily worries (well documented in this forum) whether the Pound gains or loses a few Baht.

L-dog.jpg

See what i mean by condesending? "I was not talking about peanuts black money a foreigner can make by running a buisness in Thailand" you assume i made peanuts , your just not worth talking to.

[Loptr]

Who cares!!!!

If I were considering living in Patters, then I would be concerned about over-development based on utility services available in the area, i.e. water, sewer, electric, internet, etc.... IMO the area west of Sukhumvit is already overbuilt from this respect... The only saving grace is that most likely only 50% of these condos are occupied at any one time...

[KittenKong]

I just want to know which airline is selling business class seats to UK for only 65k Baht ?

I usually fly Emirates and they haven't been less than 100k for 6 or more years.

A quick glance at Skyscanner should bring up the 65KB tickets (priced in GBP). Also tickets at 75KB (equiv) with another airline. I had no problem.

I have also seen Emirates and Qatar and Etihad at under 80KB (equiv) from time to time, but never at a time when I actually wanted to buy a ticket.

[properperson]

I just want to know which airline is selling business class seats to UK for only 65k Baht ?

I usually fly Emirates and they haven't been less than 100k for 6 or more years.

A quick glance at Skyscanner should bring up the 65KB tickets (priced in GBP). Also tickets at 75KB (equiv) with another airline. I had no problem.

I have also seen Emirates and Qatar and Etihad at under 80KB (equiv) from time to time, but never at a time when I actually wanted to buy a ticket.

Let it go KK, let it go..........

[Naam]

See what i mean by condesending? "I was not talking about peanuts black money a foreigner can make by running a buisness in Thailand" you assume i made peanuts , your just not worth talking to.

so you made huge amounts of black money?

[1BADDAT]

Here is a good sign that the housing market is going to crash here. My condo I am renting here is about the same price as I an renting my house out for in California. There are similar condos in the same building that are listed for sale at 2.5 X what my house in California is currently worth.

My reasoning is that the people renting are only willing to pay what the condo is worth today. The people buying think it will forever go up in value so no worries. This is exactly what happened in California and is why I bought my house there for less than half price when the bubble crashed in 2009. It happens over and over and people somehow never see it coming. It is just a matter of time.

[Chao Lao Beach]

I read in another newspaper that there is expected to be about 5000 new condos on finished in the Pattaya / Jomtien area in 2015, is this true ?

[KittenKong]

I read in another newspaper that there is expected to be about 5000 new condos on finished in the Pattaya / Jomtien area in 2015, is this true ?

Quite a lot more that that, I would think. I wonder who is going to live in them all?

[JesseFrank]

Several factors will delay the inevitable bursting of the condo bubble.

Of course you have noticed that 6 weeks ago something happened that will drastically sped up the bursting, as foreigners are very wary about investing large sums of money in Thailand at the moment.

I have a house for sale listed on a popular website for the past 12 weeks and there was a healthy interest until 22 May with on average about 250 ad views a week and on average 3 interested people a week responding and visiting, but all of them were closely watching the events in Bangkok.

Since 22 May I got 47 ad views a week on average and 1 single response from some time waster.

I heard from other people that they experience the same.

We will see what happens September/October, but it could dry up much faster than you think

[PattayaPhom]

After almost a 3 year wait I have managed to purchase a unit in Baan Amphur. Still over 30 names eager to purchase. Not all condos are the rubbish you see in Jomtien or parts of BKK. Many are desirable and well sought after even if the mythical bubble bursts

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[Bulldozer Dawn]

Before you can ask if the bubble will burst, you first have to establish that this is, in fact, a bubble.

[lanng khao]

So you are well off and won't be too fussed about losing a few mil on your property, but you are forever on here complaining about the price of a bottle of water, amongst other things?

The two are totally different as far as I am concerned.

I spend 10B on the bahtbus to go to Pattaya for the evening and I also spend 65KB on a business class flight to the UK. Why not?

............thats nothing, bloke down our way has bought his own plane......

why , is he taken a couple of inches off the door?

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[KittenKong]

After almost a 3 year wait I have managed to purchase a unit in Baan Amphur. Still over 30 names eager to purchase. Not all condos are the rubbish you see in Jomtien or parts of BKK. Many are desirable and well sought after even if the mythical bubble bursts

So that building is perhaps 30 years old? And one of perhaps a total of under 10? And not located in Pattaya at all? And has probably been through a few internal and external financial crises since it was built?

Hardly a good pointer to the current bubble of new builds in town, is it?

And I wonder what will happen to the value of that condo if they start building dozens more high-rises nearby and spoiling the view? There's no shortage of empty beach-front land in Ban Amphur, you know.

I also like a few buildings in that area and nearly bought there, but in the end I was put off by the need to drive to get anywhere at all and the ever-present possibility of losing my view which, after all, is the only thing worth having in that area.

Never mind, maybe the Park Lanes, the Amazons and the Seven Seas will also make for good resales in 2040. Maybe so-called prime beach-front places like La Royale will too. I wont be holding my breath though.

Probably best not to even mention some other old buildings like the Majestic.

[PattayaPhom]

After almost a 3 year wait I have managed to purchase a unit in Baan Amphur. Still over 30 names eager to purchase. Not all condos are the rubbish you see in Jomtien or parts of BKK. Many are desirable and well sought after even if the mythical bubble bursts

So that building is perhaps 30 years old? And one of perhaps a total of under 10? And not located in Pattaya at all? And has probably been through a few internal and external financial crises since it was built?

Hardly a good pointer to the current bubble of new builds in town, is it?

And I wonder what will happen to the value of that condo if they start building dozens more high-rises nearby and spoiling the view? There's no shortage of empty beach-front land in Ban Amphur, you know.

I also like a few buildings in that area and nearly bought there, but in the end I was put off by the need to drive to get anywhere at all and the ever-present possibility of losing my view which, after all, is the only thing worth having in that area.

Never mind, maybe the Park Lanes, the Amazons and the Seven Seas will also make for good resales in 2040. Maybe so-called prime beach-front places like La Royale will too. I wont be holding my breath though.

Probably best not to even mention some other old buildings like the Majestic.

Suprised as always thought you were relativly clued up on condos in in Pattaya area,

[properperson]

After almost a 3 year wait I have managed to purchase a unit in Baan Amphur. Still over 30 names eager to purchase. Not all condos are the rubbish you see in Jomtien or parts of BKK. Many are desirable and well sought after even if the mythical bubble bursts

so let me get this right.......there are 29 people on a waiting list to buy re-sale on a condo development and another bloke rocks up and is interested, only to be told that there is nothing available - but so desperate he adds his name to the list......

the place is so brilliant so no one ever sells and people towards the end of the list may never get a look in.....

if thats true, I'm a jam doughnut with cream on top.........

[socrates28]

The Pattaya condo market is built on cleaning up Kazakhstan oil money

In turn it is being invested in by Chinese/Thai money - its a cleaning up process for both parties

The market is just about sustainable because the red tape in Thailand is minimal compared to the West and the recent currency fluctuations have kept the crash at bay

Would I buy a condo - yes - but only if it was some kind of repossession and at a bargain basement price and even then I would have to think long and hard

Personally I prefer to live off the proceeds of my UK properties and pay as you go in Thailand

Edited July 6, 2014 by socrates28

[Pattaya Lous]

Forget condo's/flats noisy concrete box living.

They are 10 a penny now in Thailand, fact: you have no control over the land that it is built on, and if it is decided to demolish the block for whatever reason you will have very little say in the matter.

If you are planning long term living in Thailand: Stretch your budget a little if you can, and invest in a house you may not make millions but you will never loose your investment if you do your homework and buy in the right area.

I have been buying and selling houses in the UK for the last 30 years and my parents before me; never lost a penny.

I have been buying and selling houses in Thailand for the last 10 years; never lost a Baht.

[tropo]

There can be little doubt that condo prices here are vastly overinflated. Hard to see how they can possibly stay so high indefinitely.

Personally I bought my condo in the knowledge that it was somewhat overpriced because it is one of the very few I have seen that I like, and because even if it halves in value I will still want to live in it.

Of course if Thailand changes the retirement extension rules and I have to move to Cambodia or Costa Rica or wherever then I may be out a couple of million Baht on my condo and I may cry into my beer for a day or two about that before forgetting about it. Even including my car and my retirement extension deposit and my condo all my Thai holdings only represent a few % of my net worth, so no big deal.

But if I had put my life savings into off-plan condo investments here I would be sh*tting myself now.

Assuming your condo was a cheap one of about 5,000,000 baht, the car 1,000,000 baht, your net worth is about US $11 million. Why didn't you just come out and say it LOL.

Your little brag paid off...I'm envious.

Edited July 6, 2014 by tropo

[tropo]

Bully for you. Personally I would not pay that much as I dont think I would get much more out of it than I get out of a business class ticket at half the price.

80B for a bottle of water in some third-rate Pattaya pub is not good value in my book. 10B for a Bahtbus trip to Pattaya or 65KB for a business class ticket to the UK are both good value in my book. As such I continue to buy the latter two and I continue to treat the first with the contempt it richly deserves.

I cant see this changing, even if I suddenly found myself with many times more money than I have at the moment.

Only 80 baht for a bottle of water? In Myxx disco it's 160 baht.

[chiang mai]

the condo bubble burst is one of the favourite topics of people who have no idea how Thai property investors think and were they can sink/hide easily "surplus" cash

You are so condescending Naam ,in 24 years i have run a buisness here(not a bar) and well know where black money is hidden , i know your very old and think you know everything ,but there are some of us who are just as "knowing" about Thailand as you . so please stop posting as if your the all knowing oracle and discuss things , by the way i have gout and am not in a good mood.

i was not talking about peanuts black money a foreigner can make by running a business in Thailand. i also don't think that stating facts can be called condescending. there was no mentioning that i know more than oldtimers.

my advice: stop your ridiculous attacks and stick to your paramount daily worries (well documented in this forum) whether the Pound gains or loses a few Baht.

L-dog.jpg

See what i mean by condesending? "I was not talking about peanuts black money a foreigner can make by running a buisness in Thailand" you assume i made peanuts , your just not worth talking to.

Kettle black, nail head! Consider your own behavior IC!!

[Pattaya46]

fact: you have no control over the land that it is built on, and if it is decided to demolish the block for whatever reason you will have very little say in the matter.

That's absolutely wrong! There is not 1 owner of the land (who could sell it) but every apartment owner is also owner of the land in the same proportion than his apartment in the condo, as written on the chanote. Every decision about the land itself must be taken in AGM by owners and require a majority of 3/4. Risk is 0.000001%

[chiang mai]

Oh dear!