What are the chances of thai property market crash?

[Senechal]

@senechal: I think you are exaggerating a bit. Whilst I can follow some of your sentiment, I wouldn't go as far as saying that Abe is cornered. The weakening of the yen is a result of QE from the BOJ and is intended. It brings Japan out of deflation and helps the Japanese economy. You are probably aware that the yen is now around 116 which is still much stronger than 6-7 years ago when it was at 130. So believe me, Abe nor Kuroda feel cornered. They are happy with the outcome of QE. Where this leads in the long run is obviously another topic.

I agree though with you that the ongoing strengthening of the $ and ultimately the reversal of a lot of carry trades will have a negative impact on EM currencies, incl The baht.

Well, forecasting is a fool's errand of course, and only a hobby for me anymore but my 2 baht are still on the square that says the yen soils the bed in a way that's going to leave a few jaws dropping. I don't see much of a success story in the last round of QE -- but nor do they have much of an alternative. And even with a plunging yen, Japan won't be exiting long-term deflation for more than a quarter or two in this decade.

Asian contagion is a serious concern if the yen continues downwards IMHO.

But on a brighter note - despite the general EM bearishness, I think come next year the ASEAN story is going to encourage capital inflows that surprise to the upside -- at a time when the world is a little short on growth-stories.

[ldnguy]

Excellent ! Where i live in a small village over the last three years about forty new resorts have been built. Friday night i counted three cars at one hotel, two at another, four at another and a big zero at all the rest. Where i am staying over the last month have rented out two rooms for one night. I can,t wait for the CRASH! Greed will kick them all in the butt. The baht will likely hit 60 to the dollar. I can,t wait.

You have a very long wait ahead of you. Your comments just show you up for being very naive as far as currency markets go. There is close to zero chance of you getting 60 baht to the USD any time soon. More chance of getting 20 baht to the USD.

Well that's perhaps a discussion for another thread, but the likelihood of a baht crash is far higher than you think.

The yen is teetering on collapse now. Abe is cornered and scared. He has zero plan B. The likelihood of a yen collapse is *well* above 50% although probably not in the very near term because the one thing he can do is buy a little more time. (Which is exactly what he'll do). The question then is, do we see another Asian Flu like in 1997. The Asian Contagion started in Thailand but spread swiftly to Malaysia, Taiwan, Korea etc. The dynamic of currency collapses is that they quickly set off competitive debasement in order to preserve trade.

Right now the USD is also ripping higher and will continue to do so as long as oil continues to drop, the Eurozone continues it's recession, and China's hard landing continues. (Yes, the Eurozone is in recession. And yes, China is looking at a worst-case hard landing).

So if you think that a combined yen collapse and soaring USD won't be felt at all here in Thailand I'd sure like to hear your logic. Not to mention that the Thai baht at 20 would collapse Thailand's already disastrous exports, and never be allowed by the BoT.

But ... Since this is a RE thread, one should note that a plunging baht would likely create an inflow of capital investment into real estate. So the price of real estate priced in baht -- particularly urban, foreign quota condominiums -- will likely not collapse in the event of a Thai currency collapse.

My two baht, of course.

Even if you're right on some points I doubt you'll get 60 baht to the USD any time soon. I was replying to the comment where the logic went like this - I'm in a small village, hotels are pretty empty, so this means the baht is about to collapse and we'll soon have 60 baht to the USD. That is just ludicrous. This is a serious mistake than many make when trying to reach some sort of conclusion. They see something in their tiny part of the country and assume that the same is true all over the country. OF course a baht collapse is possible, because almost anything is possible. But it extremely unlikely any time soon. If it happened it would benefit me, but I certainly don't expect it and not planning for it.

What are those that think it will happen doing day to day? Have they transferred all their baht assets back to USD? The should do that right now if they think this, because they can double their money. They should also sell any property they have here and buy back at half-price after the collapse. I've seen people financially ruined playing that game.

[rayongchelsea]

I have been waiting for a thai currency re-adjustment since the 2006 coup to buy property..I am only looking for 58 to sterling.

Now I am waiting for an equity crash..

I have not been waiting for a property crash.

I will probably be wrong on all 3!

[JacChang]

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Why invest in property when there are property funds easily traded on the SET?

I get 6-9%, have full control of when to enter and exit, have full control over the earnings of each month.

Life is good.

However, you guys are right, the expensive apartments are going to hell. Those that are rented by the so called CEOs. One of the stock funds, goldpf, which is Marriotts apartments I believe, has been having occupancy rates at 50% average, compared to 97% 2 years ago before the protests.

Besides that, office rentals, and business rentals are doing great. My dividends are still coming in and going strong, no surprises there. Hotels and luxury apartments? They are barely at 30-50% of their usual performances since the mayhem.

The idea that you have full control is an illusion. Of course, you have full control now, as do others who have invested in all sorts of funds. When when crashes come, you often are not free to exit. Funds can be locked and add huge penalties for withdrawal whenever they want. It's at those times that you'll really want to exit but will likely have zero control. 6-9% always comes with some risk. Maybe you can't see it, but it's definitely there.

You are confusing yourself with mutual funds that banks offer versus stock funds that are traded over the stock exchange. Your investment idea and mine are totally on a different level. When crashes come? Who said I will be exiting? Crashes are when rich people like me accumulate more assets, not the other way around. And it's those who think the opposite who lose money to people like me. When crashes come, I'm not free to exit? Wrong, I have all the power and control at my desire to exit, nobody will be locking anything, or they will receive a phone call from me with their occupation being terminated. No huge penalties, only a measly 0.17% total fee. Obviously your world and my world are not on the same planet, and maybe too much illusions and rarely any truth in words.

Want more? I'll openly state here, the funds that I have now, will stay with me for atleast 20 years. 20 years later? I'm still rich, your poor.

[ldnguy]

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Why invest in property when there are property funds easily traded on the SET?

I get 6-9%, have full control of when to enter and exit, have full control over the earnings of each month.

Life is good.

However, you guys are right, the expensive apartments are going to hell. Those that are rented by the so called CEOs. One of the stock funds, goldpf, which is Marriotts apartments I believe, has been having occupancy rates at 50% average, compared to 97% 2 years ago before the protests.

Besides that, office rentals, and business rentals are doing great. My dividends are still coming in and going strong, no surprises there. Hotels and luxury apartments? They are barely at 30-50% of their usual performances since the mayhem.

The idea that you have full control is an illusion. Of course, you have full control now, as do others who have invested in all sorts of funds. When when crashes come, you often are not free to exit. Funds can be locked and add huge penalties for withdrawal whenever they want. It's at those times that you'll really want to exit but will likely have zero control. 6-9% always comes with some risk. Maybe you can't see it, but it's definitely there.

You are confusing yourself with mutual funds that banks offer versus stock funds that are traded over the stock exchange. Your investment idea and mine are totally on a different level. When crashes come? Who said I will be exiting? Crashes are when rich people like me accumulate more assets, not the other way around. And it's those who think the opposite who lose money to people like me. When crashes come, I'm not free to exit? Wrong, I have all the power and control at my desire to exit, nobody will be locking anything, or they will receive a phone call from me with their occupation being terminated. No huge penalties, only a measly 0.17% total fee. Obviously your world and my world are not on the same planet, and maybe too much illusions and rarely any truth in words.

Want more? I'll openly state here, the funds that I have now, will stay with me for atleast 20 years. 20 years later? I'm still rich, your poor.

I buy like you, so no difference. My point was that you don't have full control. If you needed to sell during a downturn it would be difficult without having to accept a bad price. Of course you can stock up with more, but that wasn't the point I was making.

To be honest you don't sound rich at all. I've never heard any rich person talk like you. You don't even know me, so to call me poor shows the way you think, and that's not the way rich people tend to think. Also, rich people don't hold investments just for the sake of holding them. Investments can go bad and there is a time to sell, but you seem to be determined to hold on regardless. And finally, you can accumulate all the money you want, but you'll still be dead one day. Rich people spend money, not hang onto it like you plan to do. That shows a high level of insecurity. I'd guess that you have some money but are scared to lose it so want to hang on to it forever. Too frightened to spend any just in case you can't make it back. Either that or you're broke. Re-read your post. No rich person would think or write like you do.

[JacChang]

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Why invest in property when there are property funds easily traded on the SET?

I get 6-9%, have full control of when to enter and exit, have full control over the earnings of each month.

Life is good.

However, you guys are right, the expensive apartments are going to hell. Those that are rented by the so called CEOs. One of the stock funds, goldpf, which is Marriotts apartments I believe, has been having occupancy rates at 50% average, compared to 97% 2 years ago before the protests.

Besides that, office rentals, and business rentals are doing great. My dividends are still coming in and going strong, no surprises there. Hotels and luxury apartments? They are barely at 30-50% of their usual performances since the mayhem.

The idea that you have full control is an illusion. Of course, you have full control now, as do others who have invested in all sorts of funds. When when crashes come, you often are not free to exit. Funds can be locked and add huge penalties for withdrawal whenever they want. It's at those times that you'll really want to exit but will likely have zero control. 6-9% always comes with some risk. Maybe you can't see it, but it's definitely there.

You are confusing yourself with mutual funds that banks offer versus stock funds that are traded over the stock exchange. Your investment idea and mine are totally on a different level. When crashes come? Who said I will be exiting? Crashes are when rich people like me accumulate more assets, not the other way around. And it's those who think the opposite who lose money to people like me. When crashes come, I'm not free to exit? Wrong, I have all the power and control at my desire to exit, nobody will be locking anything, or they will receive a phone call from me with their occupation being terminated. No huge penalties, only a measly 0.17% total fee. Obviously your world and my world are not on the same planet, and maybe too much illusions and rarely any truth in words.

Want more? I'll openly state here, the funds that I have now, will stay with me for atleast 20 years. 20 years later? I'm still rich, your poor. alt=laugh.png width=20 height=20>

I buy like you, so no difference. My point was that you don't have full control. If you needed to sell during a downturn it would be difficult without having to accept a bad price. Of course you can stock up with more, but that wasn't the point I was making.

To be honest you don't sound rich at all. I've never heard any rich person talk like you. You don't even know me, so to call me poor shows the way you think, and that's not the way rich people tend to think. Also, rich people don't hold investments just for the sake of holding them. Investments can go bad and there is a time to sell, but you seem to be determined to hold on regardless. And finally, you can accumulate all the money you want, but you'll still be dead one day. Rich people spend money, not hang onto it like you plan to do. That shows a high level of insecurity. I'd guess that you have some money but are scared to lose it so want to hang on to it forever. Too frightened to spend any just in case you can't make it back. Either that or you're broke. Re-read your post. No rich person would think or write like you do.

You want my honest opinion? Your just here to peck. I could care less if you think I'm rich or poor, does your opinion make me so? I'm rich and retired from investing, it's what my life is. What you think would not change a bit of that. And honestly? Doesn't make a single change to my life.

My point is and again, I HAVE FULL CONTROL. It's people with no control in life that are always being failures, always dependent on something or find excuses. If you speak with more stance, than your desire to peck around people, you would have gone far in life. If I needed to sell during a downturn? Sorry, guys like me, don't sell during a downturn. I don't need cash. I'm the one who started the downturn, not the one who saw the downturn and follow like a sheep. Of course I can stock up more? Only losers and people who make excuses do that. Dollar cost averaging? That's just a poor man's excuse to buy blindly in good and bad times. I choose right moments in and out, no excuses. Full control.

"Also, rich people don't hold investments just for the sake of holding them. Investments can go bad and there is a time to sell, but you seem to be determined to hold on regardless. And finally, you can accumulate all the money you want, but you'll still be dead one day. Rich people spend money, not hang onto it like you plan to do. That shows a high level of insecurity. I'd guess that you have some money but are scared to lose it so want to hang on to it forever. Too frightened to spend any just in case you can't make it back. Either that or you're broke. Re-read your post. No rich person would think or write like you do."

Ha ha ha ha ha.

So now we need a lesson from you how rich people should act. How about I tell you, how rich people really are instead of you day dreaming and guessing? Welcome to my world. Rich people DO hold onto investments because the company has prosper and continue to prosper. We don't hold losers, sorry if you do. We hold long term NOT because to evade the fluctuations in the market, that's an excuse, we hold them because our companies are just so good each year. Hang on to what like I do? You are too shallow with money. Money is endless, you think I am saving money? Investments is not for spending. It's a tree, it gives fruits, and leftover fruits go back to the land to grow even more trees. You think you put 1 tree and always depend on that tree? I have hills of investments all over the world, you should be worried I have too much money to spend, because any leftover just go into more investments. It's an endless supply. Sorry if you think I need to spend my daily life with my investments haha.

Thanks for teaching us how to be rich people.

[mike324]

The only place where the property might crash is in Pattaya, no local buyers only foreign, most sits half empty when the foreign quota fills up. As for Bangkok, it will not crash, there are too many Thais looking for homes, all young adults want a place of their own as living habits are changing. Most well off folks are are buying properties for their kids not just for themselves.

With the rising prices, many are scrambling to buy before prices rise again next year due to the opening of AEC and inheritance tax coming into effect. Land is also more scarce in central Bangkok, which is another contributing factor in the rising price.

There is an oversupply of one to two bedroom apartments in Bangkok though.

[mataleo]

The only place where the property might crash is in Pattaya, no local buyers only foreign, most sits half empty when the foreign quota fills up. As for Bangkok, it will not crash, there are too many Thais looking for homes, all young adults want a place of their own as living habits are changing. Most well off folks are are buying properties for their kids not just for themselves.

With the rising prices, many are scrambling to buy before prices rise again next year due to the opening of AEC and inheritance tax coming into effect. Land is also more scarce in central Bangkok, which is another contributing factor in the rising price.

There is an oversupply of one to two bedroom apartments in Bangkok though.

It will crash in Pattaya and drag rest of the country in to it...

[ttthailand]

The only thing I know is that Thailand Housing/condo market has not had a major correction for a long time and is over due. Most young and middle class Thais can no longer afford to buy and there are many developers who are sitting on or starting new projects. In addition, the economy is not so great, tourism is down, exports are down, auto market is down etc etc

Russian money has dropped by 30% in value so in areas like Pattaya it will have an impact.

I am not an expert but can see too many factors that would have an impact on the market. There are many and each will have a slight effect but when added it could be major. Once the fall starts it will snowball just like we have seen here in 97 and all around the world before.

I could be wrong but I would not buy at the moment.

Edited November 22, 2014 by ttthailand

[bikerlou47]

Chances are very good!

[up-country_sinclair]

What are the chances of thai property market crash?

50%.

But there's also a 50% chance there won't be a Thai property market crash.

[trogers]

What are the chances of thai property market crash?

50%.

But there's also a 50% chance there won't be a Thai property market crash.

What is the difference between a crash and a downturn?

[ldnguy]

What are the chances of thai property market crash?

50%.

But there's also a 50% chance there won't be a Thai property market crash.

What is the difference between a crash and a downturn?

A crash is when you want more people to visit your website or buy your newspaper.

The OP should tell us what his definition of crash is. Difficult to answer the question otherwise.

Edited November 23, 2014 by ldnguy

[VegasVic]

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Excellent ! Where i live in a small village over the last three years about forty new resorts have been built. Friday night i counted three cars at one hotel, two at another, four at another and a big zero at all the rest. Where i am staying over the last month have rented out two rooms for one night. I can,t wait for the CRASH! Greed will kick them all in the butt. The baht will likely hit 60 to the dollar. I can,t wait.

You have a very long wait ahead of you. Your comments just show you up for being very naive as far as currency markets go. There is close to zero chance of you getting 60 baht to the USD any time soon. More chance of getting 20 baht to the USD.

Well that's perhaps a discussion for another thread, but the likelihood of a baht crash is far higher than you think.

The yen is teetering on collapse now. Abe is cornered and scared. He has zero plan B. The likelihood of a yen collapse is *well* above 50% although probably not in the very near term because the one thing he can do is buy a little more time. (Which is exactly what he'll do). The question then is, do we see another Asian Flu like in 1997. The Asian Contagion started in Thailand but spread swiftly to Malaysia, Taiwan, Korea etc. The dynamic of currency collapses is that they quickly set off competitive debasement in order to preserve trade.

Right now the USD is also ripping higher and will continue to do so as long as oil continues to drop, the Eurozone continues it's recession, and China's hard landing continues. (Yes, the Eurozone is in recession. And yes, China is looking at a worst-case hard landing).

So if you think that a combined yen collapse and soaring USD won't be felt at all here in Thailand I'd sure like to hear your logic. Not to mention that the Thai baht at 20 would collapse Thailand's already disastrous exports, and never be allowed by the BoT.

But ... Since this is a RE thread, one should note that a plunging baht would likely create an inflow of capital investment into real estate. So the price of real estate priced in baht -- particularly urban, foreign quota condominiums -- will likely not collapse in the event of a Thai currency collapse.

My two baht, of course.

Senechal, You seem to have the right idea, this ldnguy poster doesn't seem to have the first clue, but then again there have to be winners and losers in every transaction GS came out a couple months ago predicting that by year end 2015 the Euro will be at par with the greenback, and I have had two different reports cross my desk predicting that in 2015 we will see Yen/Dollar hit the 200 mark, whether or not these exact numbers come about in 2015 doesn't really matter, but the trend is clear. Will the Baht/Dollar hit 60, I doubt it but the Baht will certainly be weaker vis a vis the Dollar in 2015. If this ldnguy is really foolish enough to put his money where his mouth is and wants to buy puts against the Dollar I will be glad to sell him those puts all day long and twice on Sunday

[Dolf123]

Yes it will burst! It's just a matter of time. Personally I think it will happen 2015 or 2016.

[Dolf123]

100%

[Dolf123]

http://www.moneynews.com/MKTNewsIntl/stock-market-crash-warren-buffett-indicator/2014/10/03/id/598461/?dkt_nbr=ufos34vz&utm_source=taboola&utm_medium=referral

And

http://uk.businessinsider.com/roubini-the-mother-of-all-asset-bubbles-will-burst-in-2016-2014-12?r=US

[Dolf123]

But if you look what happens right now with fallen oil prices and the expected economic grown rates I won't be superseded that it has started right now as we speak!

[fish fingers]

What are the chances of thai property market crash?

50%.

But there's also a 50% chance there won't be a Thai property market crash.

What is the difference between a crash and a downturn?

A crash is when you want more people to visit your website or buy your newspaper.

The OP should tell us what his definition of crash is. Difficult to answer the question otherwise.

what a silly comment

[fish fingers]

Is Thailand's bubble economy heading for a 1997 style crash? Quite likely next year but very hard to predict, these things usually happen so suddenly due to a combination of factors. We all know what will happen at some point in the future, and that might trigger a huge slump.

We are already seeing a downturn in the property market on the islands- I expect to see more land and property up for sale early next year. A short term property slump in BK is likely at some point .. household debt, inflation, the tourist sector and new tax legislation kicking in, leading to a domino effect

Edited December 20, 2014 by fish fingers

[VegasVic]

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Is Thailand's bubble economy heading for a 1997 style crash? Quite likely next year but very hard to predict, these things usually happen so suddenly due to a combination of factors. We all know what will happen at some point in the future, and that might trigger a huge slump.

We are already seeing a downturn in the property market on the islands- I expect to see more land and property up for sale early next year. A short term property slump in BK is likely at some point .. household debt, inflation, the tourist sector and new tax legislation kicking in, leading to a domino effect

FF, You are spot on as the conditions are right for some sort of downturn (crash?) and it is indeed usually some sort of external event the triggers this type of thing like in 97

[VegasVic]

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A crash is when you want more people to visit your website or buy your newspaper.

What is the difference between a crash and a downturn?

The OP should tell us what his definition of crash is. Difficult to answer the question otherwise.

what a silly comment

Yea I didn't quite follow that one either! I think what this poster may have meant is something along the lines of the old adage about what is the difference between a recession and a depression, the answer being that when your neighbor losses their job it is a recession and when you lose your job it is a depression

[OnMyWay2]

At least in Pattaya I think the ones that will be hurting the most are the larger developments with 100s (1000s?) of units.

A lot of units being sold now are being turned into short time rentals.

And the rents people are expecting are way too high. Maybe during high season you can find some sucker tourist to pay that kind of money but that's a lot of wear and tear on the unit.

If there's a crash it could be when the rental money not coming in as planned and people suddenly want out.

I'm still planning to buy at some point but I've changed my requirements to account for the real possibility of being unable to sell.

Edited December 21, 2014 by OnMyWay2

[xylophone]

The only place where the property might crash is in Pattaya, no local buyers only foreign, most sits half empty when the foreign quota fills up. As for Bangkok, it will not crash, there are too many Thais looking for homes, all young adults want a place of their own as living habits are changing. Most well off folks are are buying properties for their kids not just for themselves.

With the rising prices, many are scrambling to buy before prices rise again next year due to the opening of AEC and inheritance tax coming into effect. Land is also more scarce in central Bangkok, which is another contributing factor in the rising price.

There is an oversupply of one to two bedroom apartments in Bangkok though.

Quote: "The only place where the property might crash is in Pattaya"

I think you can probably add Patong to the list, and quite possibly other places to where tourists flock.

A couple of months ago I posted that some large developments here had stalled, and that is still the case. In addition the tourist demographics have changed markedly and also numbers have dropped, so many businesses are doing it very tough.

A few folk I know in the real estate business are not very optimistic at all, and one guy who runs a business which has been selling apartments/condos/villas here for eight years has said that this is the worst he's ever seen it and he is seriously thinking of moving on.

As a sign of the times, a very large Chinese restaurant in what was an upmarket pub/bar has been open for a couple of months now and I have yet to see more than four people in it over the course of an afternoon and early evening. Some bars in new complexes are empty, in fact I would say around 20%, and I know of many bar owners who are trying to sell.

To complete a really dreary picture, some recently opened small restaurants and businesses not too far from me are bereft of customers and have to be struggling. Four of them have farang backers, apparently bought for and in conjunction with their Thai ladies, and I wonder how long they will be prepared to pay out the money before they realise they are going nowhere?

Other folk I know have their houses on the market and there has been absolutely no interest in them whatsoever for months (for the newly advertised ones) and even years for others.

To round it off, I never thought I would see the day when one could get a room, in a small newly built hotel for 800 baht a night in the high season!

So something has got to give and from what I can see it will be the property market which will stall. I have no idea what will become of the new condos which are still being thrown up (if they haven't stalled already) and if they are ever completed, I would suspect they would have to be sold off cheaply to entice someone/anyone to buy, but that becomes a "Catch-22" situation when absolutely nothing is moving and tourist demographics do not support the type who will/can buy.

[fish fingers]

Currently looking for properties in Pattaya for the above reason but there isn't much of quality coming on the market yet, mainly developers offloading substandard or not in good location stuff - that may change after this season's up

There may be a russian exodus or maybe not.. more could arrive to escape russia!

Def some bargains to be had in and around HuaHin and Sam Roi Yot / Andaman islands, if you do your research. Mainly development villas being offloaded, very low offers being accepted.

The Market really doesnt look great right now for developers and hotel sector! And it will get worse

having said that I've just bought some 'properties' which there is great demand for and a near 25% return.

Edited December 23, 2014 by fish fingers

[i claudius]

My wife has not seen much change in the rental market or the purchase of cheaper properties1-3 mill,but to be honest she never ever dealt with a Russian so that does not affect her

[hhgz]

"Quite likely next year but very hard to predict,"

​You just predicted it. Everyone who has refused to purchase real estate predicted that the market will crash as some point, and uses that conviction to not buy. Everyone who has purchased real estate predicted that the market will not crash.

[KittenKong]

Everyone who has refused to purchase real estate predicted that the market will crash as some point, and uses that conviction to not buy. Everyone who has purchased real estate predicted that the market will not crash.

Not necessarily. I bought my unit knowing that it was overpriced and fully expecting prices globally to drop at some point (I dont know at what point a drop becomes a crash). But I bought it because I particularly wanted to live in it and could not continue renting it, not because I thought it would be a good investment.

[bkkjames]

go look at any classified section - here, baht sold, craig list etc.

take a look at the amount of high priced 2 -3 bedrooms for rent in Bangkok and have been that way for a long time.

Buying with the hopes of renting it is getting tougher. I am not talking about the top of the top units in top buildings that offer super luxury and space, I am talking about 2 bedroom 60 sqm closets with asking prices of 50-70,000 baht a month. The rich will go for the former. This leaves the not so rich farangs as a target market, as Thais don't rent at this level either. This middle class farang market is only shrinking. Good luck.

Then again, these over inflated prices could be a case of wishful thinking on part of agents.

[cooked]

Yes it will burst! It's just a matter of time. Personally I think it will happen 2015 or 2016.

We were told 50 years ago that the boom and bust economic cycles were over. Ha ha. Of course a bust is coming, but it would be foolish to try to prophesy when. Thai households are heavily indebted, many way above what is sensible. Out in the provinces developments are going on that seem to have no rational basis for success, unless it's money laundering as some have suggested. The rich will get richer and the poor get poorer.