Are people in Thailand THAT rich?

[hawksway]

The whole Country exists on credit from the poor Farmer who borrows money for seeds and seedlings to the rich man for his riverside house and Mercedes. Every 20 years or so disaster strikes as public borrowing goes through the roof, loans default accompanied with a rush of suicides. The Wise and the Crooked see it coming and buy U.S Dollars quickly. Then with an injection of funds, the economy recovers at amazing speed and the cycle starts again.

[mikiea]

Thailand is actually a very rich country, a lot of well off people here. Bangkok has 2 Ferrari dealers for gods sake, the city I used to live in Europe didnt even have a BMW dealer !

the bank book keeping is almost like the airline industry book keeping ...... money just goes in a big circle , a little siphoned off every time around . rules and regulations are never followed because there is nobody watching them . bogus #'s slotted in to make it look good . it will collapse , it did a few years back , will again .

[Bangkok Barry]

Thailand is actually a very rich country, a lot of well off people here. Bangkok has 2 Ferrari dealers for gods sake, the city I used to live in Europe didnt even have a BMW dealer !

But you hardly find any 15 Million people city in Europe.....

Doesn't change the fact that there are a lot of very well of people in Bangkok.

People are not wealthy here in a liquid way, but rather in an illiquid way as the poster above mentioned. The guy might be a street vendor but at the same time he might own a plot of land worth millions of baht. There was this girl I used to date, she didnt seem well off but her family owned land which was worth upward of 100 million baht. Not a lot of people in Europe with net worth greater than $2-3 million you see.

True. I have a family opposite me in Kalasin province who own 70 rai. They could sell it for at least 70 million baht and buy top-end condos in Bangkok, rent them out and live like lords on the proceeds. But they'd rather farm the fields than sell them. Old ways die hard.

[elgenon]

It is family wealth not an individual's. Thais will buy property to rent when the rent they will get doesn't pencil out like Westerners want. They will just buy and hold onto it.

[bazza40]

There are some obscenely rich Thais. Also more who sleep under a tree on wood pallets.

A similar gulf exists between debtors and creditors. In the bank system, you get about 2% interest on deposits - if you are lucky. On a bank loan, it's 7 - 10% interest, so the margin is fatter than most Western banks.

Outside the bank system, it's not uncommon to encounter interest rates of 20-30 % on loans from a village moneylender.

The Thai obsession with having everything new fuels property. Many Thais don't want to buy a secondhand condo or car. It's all about face. So ignorant falangs can live quite comfortably if they ignore this obsession. There are also smarter Thais around who can snap up bargains.

[bbbbooboo]

Bangkok having 2 Ferrari dealers, when 90% of Thailand can barely survive on a daily basis, probably says it all really

[SunLover2]

Holding cost are low with no property tax and token maintenance fees. People can rent out units and wait for their price.

New construction is preferred as it is coveted as a status symbol and therefore sells out fast.

SL

[sitti]

Many people don't realize that Thailand is quite a wealthy nation. Only thing holding back this country is the government corruptions. Despite of massive corruptions, businesses here are still going surprisingly fine. Once Thailand manage to eradicate all corruptions and have true elected government (not by money), Thailand's economy will rapidly grow to unprecedented heights and most likely become economic power of SEA.

[Lukecan]

Many people don't realize that Thailand is quite a wealthy nation. Only thing holding back this country is the government corruptions. Despite of massive corruptions, businesses here are still going surprisingly fine. Once Thailand manage to eradicate all corruptions and have true elected government (not by money), Thailand's economy will rapidly grow to unprecedented heights and most likely become economic power of SEA.

Yes this is the point I'm trying to convey. So many opportunities in this country, its unbelievable. Whenever I hear the word Thailand is poor from my fellow countrymen, I always say <deleted>

Edited May 22, 2015 by Lukecan

[swissbie]

Sure, there are rich, some very rich persons in Thailand. But most of them are quiet poor. Daily fight for basics. Speculation with property is part of the gambling nature of the majority of thais. OP, as some other commentators mentioned, look back at 97/98, the same story is happening again (household debpts and property phantasies). A gambler tries to make up past losses with a new game. I'm afraid, we will see many more ghost towers (sathorn) in a not too far feature. Not everything what shines is gold.

[KittenKong]

How does economy in Thailand work. I am trying hard to understand.

Smoke and mirrors.

Oh, and a shed-load of black money and debt.

[charmonman]

I had many of the same questions as the OP when I was living in Bangkok in 1996. Some of my questions were answered in 1997.

[Godders]

Maybe a more telling questions to consider would be.. how is debt repatriated? or how are loan defaulters dealt with? (by law) in Thailand?

You can look out on any road outside your window in BKK and see thousands of new expensive cars getting around, but if you look beneath the surface they say that personal debt in Thailand is getting to the point where its off the charts crazy.

In any system like this there must be a correction sooner or later, no matter what the market is ..unless of course, Thais have perfected some foolproof system that is bubble-bursting free

A previous poster talking about real estate and land prices was interesting. I believe the rates (money paid by householders to government for goods and services) on private property is virtually nothing here. I guess thats how people can still survive here (allbeit poorly) and are able to sit on real estate while having limited income.

(If i owned a house in Australia but had no income or savings to rely on, i would probably be forced to sell the property after two years, just to pay the government its yearly rates and taxes. And unlike the rich dodging taxes, you cannot swindle your way out of that one.)

Interesting that the Thai cut interest rates recently. I think they know something is coming and have followed the policy that every other country has tried already. Its a last ditch effort when you've tried everything else but all is still going to Sh7t.

I believe worldwide, our governments are not telling us the real story about the debt problem. They simply do not want people to know, as they dont want to be held accountable for doing nothing about it.

Thailand will have its turn soon enough i fear (but hope i am wrong) The next one will probably be so big it will make the tom yum goong crisis look like 10 baht falling out of a hole in your pocket

I believe worldwide, our governments are not telling us the real story about the debt problem. They simply do not want people to know, as they dont want to be held accountable for doing nothing about it.

You said it, buddy. Only about three per cent of all the fiat currency in circulation is backed by a tangible asset and there is a quadrillion dollar derivatives bubble out there waiting to go pop bring us a banking crisis which will make the economic sunami of 2007-8 look like a ripple on a millpond.

[hhgz]

"How does economy in Thailand work."

The same as any other country.

[Morakot]

A very small group is actually excessivly rich with fortunes that are 2 to 3 times that of most "old money" rich families in Europe.

Than there is a small percentage that has companies or benefits from corruption that can spend big money.

A larger, but still small middle class that is resonable well educated that can spend, but is often already in serious depbt.

Than you have the lower middle class wannabees that have little money, but support the status quo against their own interest. Here you see the depbt becoming dangerous.

And 95% or more of the Thai people struggle to survive on ever rising prices and often loose the battle to give their kids a reasonable education, they are the ones that are exploited to keep this system running.

Good observation!

[luk AJ]

OP, too many questions and worries.

That's why, I'm never concerned about the economy or politics in this country.

When the Pound goes up. I have a little dance of joy.

When it goes down I ask the g/f to economise.

Enjoy your life and let the others worry.

In a field one summer's day a Grasshopper was hopping about, chirping and singing to its heart's content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

"Why not come and chat with me," said the Grasshopper, "instead of toiling and moiling in that way?"

"I am helping to lay up food for the winter," said the Ant, "and recommend you to do the same."

"Why bother about winter?" said the Grasshopper; "We have got plenty of food at present." But the Ant went on its way and continued its toil.

When the winter came the Grasshopper had no food and found itself dying of hunger - while it saw the ants distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew: It is best to prepare for days of need.

la Fontaine

[off road pat]

One thing you will notice with Thai banks is that they do not appear to sell off repossessed land at auction or in any other way that writes off some of the value. If the bank can't sell a piece of land, it keeps it on the books at full market value.

Because of this, land holds its price. Land is not sold off cheap. In fact I would go so far as to say that land is simply not sold off.

Thais are land mad. They adore owning land. Which means they don't like selling it.

If land is being sold it's for a reason - quite often because there is a loan on the land that cannot be repaid.

The follow on to this is that when really nice pieces of land are sold there is often a sorry tale or a problem somewhere.

My Wife and I were in a lovely hotel on The Mae Kong in Nong khai (20/30 rooms) a few years ago,...My wife and I were talking to the owner and she said she bought the hotel for 1, ONE !!! Million bath from the bank....(She had family working for the Bank....) just to say....

Best regards

[off road pat]

Thailand is actually a very rich country, a lot of well off people here. Bangkok has 2 Ferrari dealers for gods sake, the city I used to live in Europe didnt even have a BMW dealer !

But you hardly find any 15 Million people city in Europe.....

Doesn't change the fact that there are a lot of very well of people in Bangkok.

People are not wealthy here in a liquid way, but rather in an illiquid way as the poster above mentioned. The guy might be a street vendor but at the same time he might own a plot of land worth millions of baht. There was this girl I used to date, she didnt seem well off but her family owned land which was worth upward of 100 million baht. Not a lot of people in Europe with net worth greater than $2-3 million you see.

True. I have a family opposite me in Kalasin province who own 70 rai. They could sell it for at least 70 million baht and buy top-end condos in Bangkok, rent them out and live like lords on the proceeds. But they'd rather farm the fields than sell them. Old ways die hard.

It's probably because they are smart,....they know everything about farming land but nothing about buying and renting condos...and they know they would be ripped off....

Same for my father in law, he has millions in land but continues to farm his fruit trees......he is a very smart man. knows everything there is to know about farming and growing fruit trees...

So ? why change and do something you don't know anything of....and take enormous financial risks....?

[mango66]

Dont forget how many reach dont pay any cent of tax,

How many just laeve from illegal business,

And how many MPs, officers you have which can buy of bribe a Condo each few years !!

And many officers just take as bribe a Condo for his daughter !!

( Therefore you can go in Land office to complain about the developer,

but you dont know the land officer received his Apartment on TOP FLOOR free of charbe

by the developer to smooth the construction !!

just remember rice subsidary - how much condos paid with that illegal collected money ?

or when you see now the UFUN pyramid scam -

and, and and

Thailand is a illigal garb... bin !!

[BusyB]

Maybe a more telling questions to consider would be.. how is debt repatriated? or how are loan defaulters dealt with? (by law) in Thailand?

You can look out on any road outside your window in BKK and see thousands of new expensive cars getting around, but if you look beneath the surface they say that personal debt in Thailand is getting to the point where its off the charts crazy.

In any system like this there must be a correction sooner or later, no matter what the market is ..unless of course, Thais have perfected some foolproof system that is bubble-bursting free

A previous poster talking about real estate and land prices was interesting. I believe the rates (money paid by householders to government for goods and services) on private property is virtually nothing here. I guess thats how people can still survive here (allbeit poorly) and are able to sit on real estate while having limited income.

(If i owned a house in Australia but had no income or savings to rely on, i would probably be forced to sell the property after two years, just to pay the government its yearly rates and taxes. And unlike the rich dodging taxes, you cannot swindle your way out of that one.)

Interesting that the Thai cut interest rates recently. I think they know something is coming and have followed the policy that every other country has tried already. Its a last ditch effort when you've tried everything else but all is still going to Sh7t.

I believe worldwide, our governments are not telling us the real story about the debt problem. They simply do not want people to know, as they dont want to be held accountable for doing nothing about it.

Thailand will have its turn soon enough i fear (but hope i am wrong) The next one will probably be so big it will make the tom yum goong crisis look like 10 baht falling out of a hole in your pocket

Read "Debt, The First 5 Thousand Years". Answers all those questions and a whole lot more. It's more a history of money in a way. Great read. (And lots about corrections!)

[Keesters]

Condos might be sold out, but many are sold to speculators and are never lived in. You can put the price up and up forever, but the actual price of anything is that which a customer is willing to pay.

I agree but a speculator with many fully paid for condos for sale who doesn't sell them has to be in the super rich category. They don't sell them because they don't need to and will only sell when a killing can be made. Not sure about now but property was a good way to launder cash.

I also find that Thai people have very little sense of "value for money". The best is always the most expensive. Showing off the latest most expensive product/gadget they bought has nothing to do with "need it" or even "knowing how to use it" it's all to do with showing off that "they can afford it".

[blackcab]

There seems to be much speculation about black money. I'm sure it happens. In my case, however, the rich Thais I know get their money from very profitable family businesses.

[Robert24]

The whole Country exists on credit from the poor Farmer who borrows money for seeds and seedlings to the rich man for his riverside house and Mercedes. Every 20 years or so disaster strikes as public borrowing goes through the roof, loans default accompanied with a rush of suicides. The Wise and the Crooked see it coming and buy U.S Dollars quickly. Then with an injection of funds, the economy recovers at amazing speed and the cycle starts again.

sounds like the rest of the world or the US. Except that it happens more frequently. 1998 LTCM debacle, Dot com crisis in 2000, financial crisis 2008....