Invest in a condominium in Bangkok : a bubble risk ?

[zenplay]

Hi,

I would like to invest in a condominium in Bangkok (Thonglor area).

The price increased a lot these last years : this could be attractive to investors.

I am wondering if the real-estate market in Bangkok is not far from a bubble risk.

Prices seems a bit overpriced in some area. The market seems to be euphoric .... may be too much.

What do you think ?

[Mark601]

Ask Bobby Brooks, he is a good real estate agent. Google him

[falkan]

Thonglor is a nice area!

[WhizBang]

INVEST in a Condo, in Bangkok. Sorry, but that sure sounds like an oxymoron to me.

Personally, I would only buy a condo (in Thailand) if I intended to live in it. I would NOT buy it as an 'investment', nor to use as rental property.

But that's me.

[SantiSuk]

New condos in Thailand seem to be like cars in most other countries - they drop in price as soon as they are out of the showroom. For investment if I were into property I would buy second hand, take a lot of time over it and bargain hard.

Property world-wide has been a great bet in the last 2 or 3 decades but before that equities were typically superior. These trends have a habit of cycling round. Hope so, as I personally prefer holding assets I can buy and sell on line without devoting love and attention to them.

[ldnguy]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

[konying]

Considering that bkk is sinking and no denial of it, not sure why prices are rising or developers building.

[TheCruncher]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

If I see that in Spain and the US properties are sold at 30 cents to the dollar compared with 2007, then I question myself what is holding back to burst the bubble here.

It can't be the brilliant economic prospects or the military dictatorship.

[paddyjenkins]

I think if your time horizon is long enough you will be fine. Plan on a holding period of 80 years plus. So the condo has to be really well built.

[SheungWan]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

If I see that in Spain and the US properties are sold at 30 cents to the dollar compared with 2007, then I question myself what is holding back to burst the bubble here.

It can't be the brilliant economic prospects or the military dictatorship.

Please do let us know when you find properties in Manhattan and London on sale for 30% of their 2007 valuations. As for Thailand maybe you can do the same for Bangkok. And for the current government life goes on. Is 8 mentions of 'bubble' your record count now?

[ezzra]

I have couple condos in Thonglor,,, invest in a condo that will bring you under B 20,000 in rent,

any more than that and you will have hard time to find renters.. simple as that, and the long

and the short of the conundrum....

[Asiantravel]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

Some properties in London have been there for centuries but it won't be the case in Bangkok

Floods Show What Lies Ahead for Sinking Bangkok

http://news.discovery.com/earth/floods-in-sinking-thailands-future-111107.htm

[TheCruncher]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

If I see that in Spain and the US properties are sold at 30 cents to the dollar compared with 2007, then I question myself what is holding back to burst the bubble here.

It can't be the brilliant economic prospects or the military dictatorship.

Please do let us know when you find properties in Manhattan and London on sale for 30% of their 2007 valuations. As for Thailand maybe you can do the same for Bangkok. And for the current government life goes on. Is 8 mentions of 'bubble' your record count now?

Did I mention the UK, however I can name you several areas in the UK where prices have bottomed out?

Did I say Manhattan or did I say the US as a whole ?

Hey strange you didn't jump on my mention of Spain, probably because there you can't single out a city like you did with my US example, where prices haven't fallen through the foundation.

Keep on with your ignorant propaganda talking using exceptions to make your point.

You're not related to Jim Cramer are you, because he's also good in twisting his words and talking after the event, to justify his prognoses.

[KittenKong]

Property can command a sustainably high price if the area is very popular and is completely built out. London is a good example, though probably oversold to foreign speculators and due for a correction.

My objection to Thai property is that everywhere you look there are vast swathes of land that have not yet been developed, even near the centre of popular areas like Pattaya/Jomtien and commuter train stops in Bangkok. What is there to prop the prices up in these places? Nothing, apart from smoke and mirrors.

[ExpatJ]

I'm in the same boat- wondering whether to invest or not in a condo here. I can see the area from Paragon- Thonglor- becoming like Orchard road and surrounding areas in Singapore in the next 15-20 years time. i.e. Luxury malls, high end condos, a high concentration of wealthy residents. So this would mean now is a good time to buy ... But i also agree with previous poster that best option would be to buy and live in that condo, if i was able to do that i would buy asap.

[JeremyBowskill]

Where's the maybe check box?

[JeremyBowskill]

double post, sorry

[sfokevin]

I do not think it is wise to invest here until they sort out the Government and potential sucession issues...

[huawei]

There will be no crash.

1. No crash during the Asian crisis .

2. No crash with SARS

3. No crash during recession

4. No crash because of coups.

Certain areas of bkk good investment. Like Thonglor a lot .

Waiting for a correction in the baht to make the investment return feasible. Problem is I have been waiting for quite awhile.

[SheungWan]

Even if there's a bubble yyou could still make money. e.g. A condo in London was worth £350K when supposedly there was a property price bubble about to burst. Now worth £800K and people are saying the same thing. Big bubbles can become huge bubbles. Huge bubbles can become massive bubbles. You can never perfectly time when a bubble will burst. e.g. 5 million baht now may seem like a bubble, but could to 10 million and then crash 30% to 7 million. So you'd still be better off investing now. On the other hand you could buy and the price could crash months later. You need to think long-term. Should be fine over 20-40 years even with a crash or two. If you're planning to invest for a year or two then it's much more risky.

If I see that in Spain and the US properties are sold at 30 cents to the dollar compared with 2007, then I question myself what is holding back to burst the bubble here.

It can't be the brilliant economic prospects or the military dictatorship.

Please do let us know when you find properties in Manhattan and London on sale for 30% of their 2007 valuations. As for Thailand maybe you can do the same for Bangkok. And for the current government life goes on. Is 8 mentions of 'bubble' your record count now?

Did I mention the UK, however I can name you several areas in the UK where prices have bottomed out?

Did I say Manhattan or did I say the US as a whole ?

Hey strange you didn't jump on my mention of Spain, probably because there you can't single out a city like you did with my US example, where prices haven't fallen through the foundation.

Keep on with your ignorant propaganda talking using exceptions to make your point.

You're not related to Jim Cramer are you, because he's also good in twisting his words and talking after the event, to justify his prognoses.

Actually I like Jim Cramer. Always worth listening to. Who is buying property in the US or anywhere else for that matter based on national prices? Golden rule is location, location, location whether the US, UK or even Spain (eg stick to the financial centres). Bangkok? Anything overlooking the Chao Phraya should hold its value long term. As to whether its a 'good investment', really also depends on the individual's personal economic circumstances. And no I am not personally invested in Thailand property.

[CBR650]

No reason not to invest money in a 3rd World country ruled by a military junta, and the massive unknown just around the corner (that will effect everything in ways that cannot be forecast), that cannot be discussed without the threat of prison.

[midas]

If I see that in Spain and the US properties are sold at 30 cents to the dollar compared with 2007, then I question myself what is holding back to burst the bubble here.

It can't be the brilliant economic prospects or the military dictatorship.

Please do let us know when you find properties in Manhattan and London on sale for 30% of their 2007 valuations. As for Thailand maybe you can do the same for Bangkok. And for the current government life goes on. Is 8 mentions of 'bubble' your record count now?

Did I mention the UK, however I can name you several areas in the UK where prices have bottomed out?

Did I say Manhattan or did I say the US as a whole ?

Hey strange you didn't jump on my mention of Spain, probably because there you can't single out a city like you did with my US example, where prices haven't fallen through the foundation.

Keep on with your ignorant propaganda talking using exceptions to make your point.

You're not related to Jim Cramer are you, because he's also good in twisting his words and talking after the event, to justify his prognoses.

Actually I like Jim Cramer. Always worth listening to. Who is buying property in the US or anywhere else for that matter based on national prices? Golden rule is location, location, location whether the US, UK or even Spain (eg stick to the financial centres). Bangkok? Anything overlooking the Chao Phraya should hold its value long term. As to whether its a 'good investment', really also depends on the individual's personal economic circumstances. And no I am not personally invested in Thailand property.

" Actually I like Jim Cramer."

that explains so much about you

http://www.dailykos.com/story/2009/03/05/705113/-Jim-Cramer-Uses-CNBC-to-Manipulate-Stocks

[Naam]

Considering that bkk is sinking and no denial of it, not sure why prices are rising or developers building.

not to forget the expected alien invasion of species 4278 from the Delta quadrant which will concentrate on BKK.

[SheungWan]

" Actually I like Jim Cramer."

that explains so much about you

http://www.dailykos.com/story/2009/03/05/705113/-Jim-Cramer-Uses-CNBC-to-Manipulate-Stocks

Things must be pretty desperate if you have to rummage around in the left-wing blog conspiracy department. Jim Cramer provide a useful antidote to those who go into a panic whenever the markets get volatile, though he himself famously flipped in 2008 at what he perceived to be the Fed's underestimation of how fast and dangerous things were moving. The anti-Wall Street gold bug fraternity obviously don't like anybody talking about stocks at all really so I guess they're not watching CNBC too much during the day.

[Senechal]

"The price increased a lot these last years : this could be attractive to investors."

You lost me.

[Senechal]

" Actually I like Jim Cramer."

that explains so much about you

http://www.dailykos.com/story/2009/03/05/705113/-Jim-Cramer-Uses-CNBC-to-Manipulate-Stocks

Things must be pretty desperate if you have to rummage around in the left-wing blog conspiracy department. Jim Cramer provide a useful antidote to those who go into a panic whenever the markets get volatile, though he himself famously flipped in 2008 at what he perceived to be the Fed's underestimation of how fast and dangerous things were moving. The anti-Wall Street gold bug fraternity obviously don't like anybody talking about stocks at all really so I guess they're not watching CNBC too much during the day.

Gold is a truly awful store of value.

But CNBC's viewership has plunged down to 1994 levels. ...and Jim Cramer is a national embarrassment.

There's nothing "left wing" about realizing that the current system is on a terminal trajectory. It's called "Being good at math".

[ldnguy]

I'm in the same boat- wondering whether to invest or not in a condo here. I can see the area from Paragon- Thonglor- becoming like Orchard road and surrounding areas in Singapore in the next 15-20 years time. i.e. Luxury malls, high end condos, a high concentration of wealthy residents. So this would mean now is a good time to buy ... But i also agree with previous poster that best option would be to buy and live in that condo, if i was able to do that i would buy asap.

But that assumes everything will move along perfectly for the next 20 years. There are lots of things that could go wrong. The world doesn't usually work like that. But even in those areas there is a massive amount of land that can be built on. Probably around 1% is built on. You could have 1000s more condos all around there. I doubt any area of Bangkok will ever become like Singapore. The politics here just don't allow it.

[JThai]

Can a foreigner tourist purchase on credit a new condo? Paying for it is no problem but obviously I don't "work" in Thailand.

[Senechal]

Is Thonglor a great neighborhood? Kind of. It's trendy. But there are about to be 2 dozen other trendy neighborhoods thanks to BTS/MRT expansion. Unlike many cities, there's plenty of room in BKK. And there happens to be an aggressive plan to invest in massive amounts of new public transportation.

Value in real estate comes from scarcity: Either overall scarcity of land. Or scarcity within distance of mass transit or key geographic locations. Bangkok has no such scarcity.

Prices are already *very* high per square meter relative to household income. And household debt levels are terrible in Thailand. That's a pretty horrible recipe for real estate investing.

And that's not even getting into the larger problems like terrible legal protections for foreigners, poor building standards, serious flood issues that haven't come close to being solved -- and the end of a macro real estate cycle.

But... if you are buying a place to "live" in. Then go for it. A home is a home. But if you're buying to rent out or sell... Bangkok real estate is a terrible investment IMHO.

[JThai]

It's been rather hard for me to find anything I want to rent near enough to a BTS station for any less than 20K all in and that seems to be a pretty good deal around here. Is it really going to be hard to keep any properly near a BTS or MRT occupied? Let's say you want to live there 6 months a year or you eventually want to live there full time, at least while you are away any rent you can collect can be helping to pay you back on the investment. Where am I going wrong? Not claiming to be an expert here, honest question.