Under The Current Climate Would You Buy A Condo?

[pkrv]

cmsally - ask PALM he will help, your feedback will be useful to all.

No matter how I say this it is going to sound very poor - I have seen evidence that some Bangkok condos have entered into the yep I will have one of those brigade. That also has a knock on effect.

[obsession]

I have found a link to Thailand's expectations for a ferang to retire here - I do not believe this to be arduous in financial (international) terms – BTW Thailand has its own aspirations.

If anyone can trash these comments please do. I personally have seen no indication/empirical evidence, that retirement, or indeed investment visas (amongst many others) are under threat - does anyone disagree? All I see is that Thailand is coming into line with international standards on visitors visas, was that truly unexpected?

http://www.thaivisa.com/318.0.html

How is Thailand coming in to line with other S>E> countries? A 10 year retirement visa is available in Malaysia and Cambodia will sellyou a tourist or business visa. People are leaving los because of the visa problems.

I think this where the problem with perception regarding property impact comes from

1) Lumping all visas into just one 'visa' issue is wrong, crass, manipulative, deceptive, misleading etc...

2) There is no impact on retirement visas.

3) There is no impact on investment visas (or business visas?)

4) THERE is an impact on visitor visas. These are being brought into line with the international community to reduce dropouts attempting to permanently reside in any country. 90 days is enough for a visitor, some other countries have 30 day visitor visas, some much less.

The question then becomes why state that the new 90 day visitor visa is a problem for the property market, these people have no money so could only buy if the market was at effectively 0.

I say again......

Not in line with Cambodia, Malaysia or Vietnam, which are Thailands main " competitors". Or are you just trying to compare them with western countries with rights for visitors and citizens. Apples should not be compared to oranges.

The problem for the property market is that tenants are leaving. Less customers. I guess you will never admit to los having any potential problems , but everything has a knock on effect. For example, visa run companies. TEFL schools.

I read that business visas and work permits are harder to get now. One of them had a 280 A4 page application. Are you actuallty denying that decent, working people are leaving los because of all the hoops they have to jump through now and that it will have no effect whatsoever on anything.

Interesting - I did ask on this forum how Thailand compared to condo issues with many countries I guess including Cambodia, Malaysia or Vietnam. What is the freehold stance in these countries?

I think only Malaysia has favourable terms and it has a 10 year retirement visa. Los is still probably the best, but is trying hard to blow its position.

[craigt3365]

I think we are focusing too much on the expat community in terms of how the RE market is doing. In the past 4 weeks of looking at properties from Bangkok to Samui, the vast majority of properties I looked at were Thai owned. In the newer developments, some Thai buyers had 3+ units each. Most with no mortgage!

Thailand, as well as the rest of Asia, is booming in terms of both population and economic growth. More people and they are richer than in the past...

[teejay]

I would be interested to hear from anyone who has a batch of rental condos in BKK as to how it works for them at the moment.

I own and rent out 2 condos currently in BKK, cmsally. While it's not a 'batch' of condos and they are certainly not representative of the BKK condominium market, it neverless may provide you with the information you need.

Both rooms are in Noble Ora on Thonglor, sukhumvit 55. One is rented for 60k/month to a Swedish couple, the other is rented for 80K/month to a Japanese buisnessman, his wife, and their small child. The Swedish couple has been there from day one (after I furnished - about 1.5million baht each condo - this is western-style stainless kitchens, halogen lighting in dropped ceilings and in floors (yes, lights in the floors) - large quality bathrooms, etc). The Japanese man and family have been there for almost one year, and I think they will stay another year. Prior to them, the tenant was a Japanese businessman as well who recommended the condo to the current tenant. Each of the rooms has a car-pass, and I don't know if either tenant has a vehicle. I've never had a problem with either of the tenants, or with the previous Japanese tenant, and they always transfer money on time into my account. They don't bother me and I don't bother them. I asked for recommendations from both employer and previous landlords before renting. ROI is about 10% on both, however, you must consider that I bought them at a very low price. Have not yet considered re-selling as I've had no problems thus far.

I have also bought off-plan at The Clover Thonglor 18. I sold one pre-completion at 20k THB per sqm over my buy-in price x 72.2 sqm, about 1.5 million profit (minus transfer costs and commission). I have another 72.2 sqm condo in the project that I am planning on keeping to stay in myself, yet I haven't decided as to whether I will sell or not. All inquiring buyers have been Thai, except for one British gent who called to ask whether a 35sqm studio in the same project would be a good buy at 76k/sqm or not. It is the Thai's that are buying and/or selling. I bite my tongue whenever I read a post about how visa rules will affect the condo market, as if the farang english-teacher/sex tourist contingent is propping up the market... right.

Currently the rest of my assets are in Hong Kong, properties and investments. Ideally, I would like to sell everything in Thailand and continue investing in HK as I have made money both in capital gain and thru the appreciating baht -- however, the thai second-hand market is not quite liquid shall we say, so as long as the renters stay, I'm ok with not selling. If given the choice, however, I would sell everything and move all monies to HK. Interpret that last statement as you will, but it is an indication of my view of real estate in Thailand vs. HK at the moment. Incidentally, I live a bit further outside of the city in a townhouse of quite lesser quality than my own rental properties, simply because the tenants in Noble Ora want to stay there and I'd rather be earning 60k or 80k/month on rent than living there myself and earning nothing.

[pkrv]

teejay - excellent update - I would however counter - buying the very best - that one of the greatest capitols on the face of the planet has to offer is not arduous. Hong Kong Prices are the same as Hampstead prices, affordable but unaffordable - If that makes sense.

[teejay]

pkrv if i understand you correctly, you're saying that it's possible to get something of the highest quality in thailand for what would be a reasonable or even cheap price relative to another city (Hampstead/HK/etc). Yes?

I would agree, but it depends on the reason you're buying. You, as i understand it, have purchased to live in, which is a situation where of course one would want the very best for their money and re-sale would not be such an issue.

For me, I'm rather youngish (29) and am purchasing more for investment and to keep my money out of reach of my tendency to impulse buy useless things. It's just that the liquidity of the the market in Thailand cannot match that of HK, and for an investor, liquidity is of utmost importance (at least for me). Not a day goes by where I don't get an offer for a condo that I own in the SOHO district of HK Central (55sqm gross, ~14million THB).

If I sold all of my properties here, I may be able to buy a 100sqm 2 bedroom condo in the SOHO area of HK and furnish it to quality standard (say 25million+ baht -- yes it only buys you 100sqm, possibly less). I would be getting a lot less in one sense (one property vs. three, a lot less space, etc. etc. etc.), but should I need to sell, I could do so within an hour and have closed the deal cash in my bank account in 1.5 months (at maximum, if it's a cash buyer, even shorter). In addition, my typical tenant there would be investment-banker grade, and the rent would be sure and steady in an area of HK that is expat-driven and on the rise (while ROI would not equal that of thailand, the potential for capital growth and the liquidity of the market balance that fact out for me -- in addition to HK's very strict and fair laws to protect buyers and sellers). Of equal importance is the fact that I will move to HK in a few short years then possibly back to thailand, so I'd like all of my assets to come with me...

To each his own. I'm just sharing some real info, maybe it could be of some use when making a decision for another person. Then again you could just listen to posters like think_too-mut who post utter drivel.

[pkrv]

teejay you are no fool - very well I am 48 and not South of Hollywood Road, though love and just got back ,storms were utterly spectacular... you have my reasons for buying down pat, I cannot be more honest than that.

142 sq m in the best = about 100k THB psm - I don't see a problem.

[pkrv]

teejay - I made a mistake - you are correct on liquidity - but - Hong Kong has a lease issue on condos, (rent up front). Hampstead does not and indeed Bangkok does not. I think you need to move the decimal point in your calculations? Freehold two bedrooms 100sm (3.5 acres of private but communal gardens) is about 600K GBP in Hampstead, oddly price is not measured in sqm in the UK.

Hampstead was only ever a place for the tolerant/intellectual elite, it now competes with Belgravia in property terms- Houses (family homes) are not only possible - but also available and better.

Bangkok offers the same aspirations (not house ownership admittedly) – IMO - It will succeed as a major capitol city of the world.

[pkrv]

teejay - I made a mistake - you are correct on liquidity - but - Hong Kong has a lease issue on condos, (rent up front). Hampstead does not and indeed Bangkok does not. I think you need to move the decimal point in your calculations? Freehold two bedrooms 100sm (3.5 acres of private but communal gardens) is about 600K GBP in Hampstead, oddly price is not measured in sqm in the UK.

Hampstead was only ever a place for the tolerant/intellectual elite, it now competes with Belgravia in property terms- Houses (family homes) are not only possible - but also available and better.

Bangkok offers the same aspirations (not house ownership admittedly) – IMO - It will succeed as a major capitol city of the world.

[teejay]

pkrv, i think you may have seriously underestimated property prices in HK. SOHO, midlevels central/west, pokfulam, areas are selling at prices more than that the Hampstead example you gave.

http://www.iglu.com.hk/en/hk_for_sale.aspx

I've used this agency before when selling a property, they advertise properties that fit my tastes... if you search for 1000-1200 sqft in the search box (100sqm = 1076sqft), you will clearly see that condos in decent locations are selling for well over 1 million USD. My example earlier of selling all Thai condos for 25 million baht would more accurately buy me a decent 800sqft (70-some sqm) in a desirable area of HK, not the 100sqm I mentioned previously.

I don't deny that if I were retired, I would consider living in a nice condo in Bangkok which would get me a lot more for my money than in HK. You and I are, however, probably at very different financial stages in our lives. You, I'm assuming have amassed a particular amount of wealth and more concerned with wealth preservation than accumulation and growth. I, on the other hand, am not yet retired and am more focused on accumulation of wealth. My goal would be to be in your position at your age. While I don't deny Bangkok's place among world cities, it is just my opinion that I can make more money in the HK real estate market. Bangkok does have a long way to go ( as does Thailand -- a country that goes Jatukarm crazy and wastes millions of baht on useless dirt most definitely would be considered as a country exhibiting third world behaviors).

[teejay]

pkrv, i think you may have seriously underestimated property prices in HK. SOHO, midlevels central/west, pokfulam, areas are selling at prices more than that the Hampstead example you gave.

http://www.iglu.com.hk/en/hk_for_sale.aspx

I've used this agency before when selling a property, they advertise properties that fit my tastes... if you search for 1000-1200 sqft in the search box (100sqm = 1076sqft), you will clearly see that condos in decent locations are selling for well over 1 million USD. My example earlier of selling all Thai condos for 25 million baht would more accurately buy me a decent 800sqft (70-some sqm) in a desirable area of HK, not the 100sqm I mentioned previously.

I don't deny that if I were retired, I would consider living in a nice condo in Bangkok which would get me a lot more for my money than in HK. You and I are, however, probably at very different financial stages in our lives. You, I'm assuming have amassed a particular amount of wealth and more concerned with wealth preservation than accumulation and growth. I, on the other hand, am not yet retired and am more focused on accumulation of wealth. My goal would be to be in your position at your age. While I don't deny Bangkok's place among world cities, it is just my opinion that I can make more money in the HK real estate market. Bangkok does have a long way to go ( as does Thailand -- a country that goes Jatukarm crazy and wastes millions of baht on useless dirt most definitely would be considered as a country exhibiting third world behaviors).

[pkrv]

Opps the entire Thaivisa web site has been having problems all day. Double posts, delayed posts etc, tricky...

Back on track I see no example of Hong Kong properties offering 3.5 acres of land Also, I see a FAB hotel that I stay at that outperforms the Peninsula and Oriental by orders of magnitude (in Hong Kong).

Sorry?

[teejay]

yeah double posts problems all day...

my point exactly pkrv, you can't get 3.5 acres of land in HK... which is why prices in HK are so much more expensive than in Hampstead.

There is a nice boutique hotel in causeway bay called Jia, try it out sometime. I had my parents stay there when they visited me, of course it was a bit too hip for an old doctor and his wife, but the rooms were very nice. I think they offer serviced apartments too, but I wouldn't want to live in Causeway bay.

[pkrv]

teejay - BTW I liked your analysis (sorry posting was difficult yesterday) yes we are at different financial stages, and true I would not under normal circumstances buy to invest in Bangkok.

Your thoughts mirror mine almost exactly - particularly on the more value for money in Bangkok and your strategy as you need to accumulate wealth now - and also plan for down the line (my current position as you guessed)

There is however a difference - to date the world has relied on an increasing population most especially those who find it difficult to think outside of models (not you BTW). If people who have, despite everything, accumulated wealth come to the same conclusions the model will change - Bangkok could theoretically become relatively unaffordable.

I did look at your links on Hong Kong and found just two results on the site - but critical from a westerners viewpoint I guess these are leasehold - this is a gigantic hurdle for this kind of money, yes a liquid market but something is wrong, passing things onto your kin over protracted periods will be tricky and effectively this is rental - that money is not retained in the family - I don't know how leasehold works in Hong Kong but this seems curiously at odds with a nation that is financially astute (sorry this is an open probe, I hope no offence is taken). In Dubai all property is leasehold and the reason is that it is owned by the royal family and one day the oil will run out – i.e. this is a new revenue stream.

Anyway the results were - <Edit Sorry I canot post the replies from the site - too many pictures comes back as an error end edit>

Edited June 29, 2007 by pkrv

[pkrv]

Noting the exact same number of posts to each thread – are they converging?

From the BBC web site average house ownership – people who invest (in their future) in Thailand – who will not be average - is;

Overview

Average Cost: £210,578

Detached: £323,332

Semi-detached: £189,617

Terraced: £168,134

Flat: £196,505

Change in last quarter:

+0.2%

Change in last year: +9.25%

Sales: 266,966

http://www.thaivisa.com/forum/index.php?showtopic=117237

http://www.thaivisa.com/forum/index.php?showtopic=90203

Edited June 29, 2007 by pkrv

[london]

Cassandra, my view would be to buy.

You are looking at a 5 star condo, good management, you know the city, you have a work permit and you would get a lawyer to handle everything....why not?

Some people want to cloud and complicate the issues with "what ifs" (99.9% negative), whereas it is best to look at the reality of both the current situation and how one reads the future.

Be positive.

Be realistic.

Go for it.

There have been so many posts over the short while that I have been looking at Thaivisa covering the same, or similar, topic and there are always the same views expressed.

Go with your gut feeling.

I have, and I don't regret it!

Good luck.

[palm]

Cassandra, my view would be to buy.

You are looking at a 5 star condo, good management, you know the city, you have a work permit and you would get a lawyer to handle everything....why not?

Some people want to cloud and complicate the issues with "what ifs" (99.9% negative), whereas it is best to look at the reality of both the current situation and how one reads the future.

Be positive.

Be realistic.

Go for it.

There have been so many posts over the short while that I have been looking at Thaivisa covering the same, or similar, topic and there are always the same views expressed.

Go with your gut feeling.

I have, and I don't regret it!

Good luck.

You are absolutely right.

The whingers never disclose their real precarious financial position; which is the real reason for the negativity in the first place. If they can't afford something, then anyone who can must be 'stupid' in their little green eyes. There are lots of temper tantrums from these no-money posters on TV; they are quite easy to spot.

[craigt3365]

london: I think you are right on. Especially if you are planning to live in the unit for at least 3-5 years. Then who cares what the market does! My Dad built a new place in Vegas, it was finished just as the crash happened. He could care less. The market will eventually go up. And until then, he has a great place to live.

On the other hand, if you are an investor, I don't think now is a good time to buy. Sure, there are still some good buys, but it is a very risky market. When real estate agents tell you it is not a good time to buy, you should be worried! I have had several admit to me that it would be better to wait until the end of the year to buy...amazing they said that, but they did.

[london]

Many thanks Palm and Craigt3365 !!

It seems that I'm not the only one who is fed up with the continual barrage of negative posts by 4 or 5 members.

The fact is that everyone needs a place to live. Some of us are "lucky" enough to be able to buy.

Others who have the resources, don't want to buy. Thats fine.

Others who may not have the resources, don't want anyone else to buy. This is what I get a little peeved about.

Over time, real estate ownership is always a winner...if for no other reason than you control where you live.

IF you get a financial advantage at the end of the day, well, thats great. If not, and if you didn't originally buy to make a dollar (or 2), well, who cares? Craigt, as with your Dad, time takes care of it!

Thanks too for passing on the comments made by local agents. Appreciated.

[craigt3365]

Here is a great piece from The Nation, yesterday.

The Nation-Opinion

This part specifically focused on real estate (the rest just bashed Thaksin):

Investors in real estate projects should be feeling pretty hurt, especially new entrants. The hope of getting rich quickly from the fake economic prosperity and bubbles created by Thaksin was dashed by the coup and Thaksin's flight from possible prosecution for criminal wrongdoing. His disappearance from the scene must have left some young real estate upstarts facing financial ruin or, at least, failure to gain the profits they expected. In fact, there are quite a few beginners in real estate, including a hopeful who is the apple of his father's eye, now in real danger of failure. That's why they continue to hope that Thaksin will come back and make them rich through shortcuts.

Am I to assume the "apple of his father's eye" is Thaksin's son? Just curious....

[SiamSquare123]

im looking to buy in the 6m Baht range next year. im very excited.

[xbusman]

Once more, in case anyone forgot, the market is not relevant to any one persons decision to buy or not to buy in Thailand. There is in fact, only one hard and fast rule.

Never put more money into Thailand than you are willing to walk away from.

Its just that simple. Arguing about individuals decisions are moot and a waste of bandwidth. Each of us has differant needs and circumstances. As long as you live by the rule, you will be fine and content. It might or might not be a great financial investment, no one can predict the future, particularly here.

[london]

Dear xbusman, yes, I have noted that you have said this on more than one post.

It is an interesting point, but I would like to add something to it.

By definition, you are saying that it is POSSIBLE that a person could lose their home/investment in Thailand. True?

Well, the fact is that this could happen ANYWHERE depending on either polictical considerations (what government comes into power, what laws are passed,etc) or on natural disasters.

The fact of the sitiuation in the world now is that it is not possible to act in such a way as to destroy other's wealth AND expect the financial world to sit back and do nothing. As an example: the small glitch in this governments initial financial foray into capital markets wiped off billions of baht on the capital markets. After speedy changes, the money is flowing back in.

If a government, Thai or other, confiscated, passed laws forbidding foreign ownership of property, or took property by any other means....what good would come of it? Basically, why would they do it?

The fact is that such an action would literally destroy their financial markets...not a glitch, complete destruction....within a day!

Foreign banks would close..immediately. Foreign companies would close down immediately. No trade. No tourism. No foreign exchange. A local currency worthless. (look at North Korea and Zimbabwe)

So, sure, if you truly believe that this could happen, then your point of "Never put more money into Thailand than you are willing to walk away from" is valid. But in reality it is highly unlikely. I'm sure that you would agree.

[pkrv]

London - I agree - Additionally diplomatic pressure is also applied, something few people see.

Perhaps an alternative to "Never put more money into Thailand than you are willing to walk away from, is "Even if you can survive the financial shock, you are going to be pretty cheesed off and will attempt to recover the money, by any and all means at your disposal".

Whilst elephants apparently never forget - Humans are far worse - Hence diplomacy.

Edited July 3, 2007 by pkrv

[pkrv]

This is interesting.

http://news.bbc.co.uk/1/hi/world/asia-pacific/6260720.stm

The day the Thai economy crashed By Jonathan Head

BBC News, Bangkok

Thais remember the crash On the morning of 2 July, 1997, the Bank of Thailand finally gave up its eight month-long battle against local and international speculators, and abandoned the peg that tied the value of the Thai baht to the US dollar.

Its desperate defence of the peg had all but exhausted the $40bn in foreign reserves; less than $3bn remained.

Thailand, a country that had enjoyed four decades of almost uninterrupted economic growth, and was admired all over the world as one of the Asian Tigers, was broke.

The country's decision set off panic throughout the rest of South East Asia, as investors started pulling out the billions they had bet on the miracle economies of the East.

It set off even more panic among local entrepreneurs.

Many had borrowed heavily in US dollars to cash in on the frantic property boom.

They did so to get around the high interest rates inside Thailand, raised by the central bank to support the currency and curb over-investment.

They had believed the government's promise that it would never abandon the currency peg.

Overnight their debt payments shot up, and they frantically bought dollars to try to cover their loans, putting even more pressure on the baht.

By the end of 1997 it had slid from 25 to the dollar, to 58.

Today if you ask people 'Do you remember the 1997 crisis?', they don't remember

Sirivat VoravetvuthikunSirivat Voravetvuthikun was one of those swept up in the thrill of speculation.

He had played the stock market, and caught the property bug. He borrowed heavily to develop a luxury resort in a national park east of Bangkok.

"I was an honest businessman, but I was greedy," he told me. "I had 100 million baht, I wanted a billion, so I borrowed a lot - at that time I was paying 17% interest, which brought me down on my knees."

New attitude to life

Sirivat's response to his financial ruin made him one of the emblematic figures of the crisis.

He and his wife resorted to making sandwiches, and sold them on the streets of Bangkok.

Ten years on, he has built it up into a small catering business - but, unable to borrow, he has little chance of becoming the millionaire he once was.

He does not seem to mind, though.

"This is a real business, that deals with real people," he said. "It's not like a bubble business."

The crash nearly wiped out Vikrom Kromadit as well. He had built one of Thailand's most powerful companies, through developing huge industrial parks for the foreign manufacturers who had been pouring into Thailand during the late 1980s and early 1990s.

For many Thais, the financial crash is merely a distant memory"My bankers would come to me after the devaluation and say: 'Vikrom, can you pay back just a little?', and I told them I did not even have enough to pay my staff salaries," he told me.

Vikrom's Amata Corporation has bounced back, but he has radically changed his philosophy.

"I no longer run the day-to-day business of the company. I am just the dreamer, the planner, the trouble-shooter. I work only one day every two weeks, and most of the time I stay outside Bangkok, reading and writing," he said.

The crisis left deep scars on the Thai psyche, after four decades in which its people had known only economic success.

There was the search for scapegoats, initially foreign speculators and the International Monetary Fund, whose rescue package required some painful medicine for the Thai business community.

Later the central bank governor, Rerngchai Marakanond, was prosecuted and fined $5bn for his negligence in depleting Thailand's foreign reserves.

There was an upsurge in nationalist sentiment, and demands for political reform.

That led to the political triumph of Thaksin Shinawatra, a charismatic telecoms tycoon who weathered the crisis and went on to form a new political party, Thai Rak Thai.

He won two record election victories in 2001 and 2005, largely on his promises to lead Thailand out of the economic gloom and make it a winner once more.

His high-handed, provocative style of government eventually drove the military to push him out in last year's coup.

Moving on

So have lessons been learned? Could a repeat of the financial mayhem in 1997 occur?

"Thai people seem to forget things very easily," said Sirivat Voravetvuthikun. "Today if you ask people 'Do you remember the 1997 crisis?', they don't remember."

Certainly the banking and financial system is better regulated now, and crucially, the currency now floats, so the likelihood of such a dramatic devaluation is now remote.

The Muang Thong Thani development still needs investorsIf anything, Thailand is suffering the opposite problem today - too much foreign currency coming in to buy low-priced Thai assets, thus strengthening the baht and hurting exporters.

The economy has recovered, but not to the ebullient pre-1997 levels.

It now chugs along at around 4% a year.

It is true that there is plenty of construction underway again in Bangkok, and perhaps a little of the property fever of the 1990s: in the city centre most of the half-finished concrete shells, 'monuments to speculation', that were left after the crash, are now being completed.

But just outside the capital is the massive Muang Thong Thani development, a would-be satellite city of 26 tower blocks that is still only around 20-30% occupied.

The fact that no-one has yet been willing to put up the money to finish Muang Thong Thani is a telling indicator of the caution many investors now feel about betting on Thailand.

The year of 1997 also marked the time when the 'miracle economy' baton was passed on to China, India and Vietnam.

Thailand, like other South East Asian countries, is struggling to compete with these star performers of the global economy.

South East Asia now gets just a fraction of the foreign investment that goes into China.

"We don't invest enough in our human resources," said veteran economist Amar Siamwalla, from the Thailand Development Research Institute.

"We don't put out enough engineers, technicians, and we rely too heavily on investment by foreign multinationals for our industrial development," he said. "Thai investors prefer to put their money in property."

All the betting now is that any future financial crisis on the scale of 1997 will not start here, but in China, India, or even the United States. South East Asia's moment in the sun has probably passed.

[london]

As always PKRV, a succinct and timely response!!

Many thanks.

[pkrv]

There must be one serious amount of foreign investment in Thailand at the moment.

It’s not coming from the property market - From this and other threads it seems slow. Interestingly the Nationwide building society no longer offers foreign exchange transfers in THB (you can still use the cash point card).

But for Stirling Thai baht to be 62.74 this morning it means serious players at work, anyone know what is going on?

Several years ago when I first started transferring cash I tried to find out who was offering the best rates, and the subject of losses on condos came up, I unfortunately guessed correctly that my exposure would be in the FX market, I was getting rates of between 73 and 74.71 on the initial and 30% deposit phase.

This is going to hurt.

[Old Man River]

There must be one serious amount of foreign investment in Thailand at the moment.

It’s not coming from the property market - From this and other threads it seems slow. Interestingly the Nationwide building society no longer offers foreign exchange transfers in THB (you can still use the cash point card).

But for Stirling Thai baht to be 62.74 this morning it means serious players at work, anyone know what is going on?

Several years ago when I first started transferring cash I tried to find out who was offering the best rates, and the subject of losses on condos came up, I unfortunately guessed correctly that my exposure would be in the FX market, I was getting rates of between 73 and 74.71 on the initial and 30% deposit phase.

This is going to hurt.

Read some of the other threads. It is coming from the equity markets. This is often referred to as hot money as it is short term in nature.

[trajan]

here's a news article that might be of passing interest....

Foreign investors unfazed by problems in Thailand

By Thomas Fuller Published: July 4, 2007

International Herald Tribune

BANGKOK: The one remaining three-bedroom apartment at The Park, a luxury condominium complex under construction in the heart of Bangkok, goes for $1 million. How about a discount, given the concerns about political stability in Thailand?

"We have no discounts - the price is fixed," said Kanokrak Rerksopist, a saleswoman, as she showed a visitor around the display unit.

Kanokrak does not need to haggle: Thais, Europeans and other foreigners have bought up all but a handful of units in the 28- and 35-story towers, which are scheduled to open later this year.

Whether it is buying high-end real estate or shares in the Thai stock market, foreigners are pumping money into Thailand these days, apparently confident that the generals who seized control in the September coup will eventually hand back power and the country will return to political normalcy.

This week, foreigners have helped push the Thai stock exchange to its highest level since the financial crisis that began here a decade ago, with net foreign purchases Monday and Tuesday of $300 million, according to Keith Neruda, head of Thailand research at UBS Securities in Bangkok.

"I don't think it was coming in on any specific news," Neruda said of the sudden cash infusion. "I think it was out there and looking for a home."

Part of the reason Thailand has continued to attract foreign investment, analysts have said, is that fund managers are so preoccupied with finding decent returns on the trillions of dollars they manage that events that once scared them away - bombings, military coups and general political instability - are discounted or glazed over.

With the foreign money flowing in, the baht has continued its upward march against the dollar, advancing 0.2 percent to 34.19 Wednesday, a level last seen in September 1997.

"Investors have become increasingly insensitive to political risk," said Frederic Neumann, the chief Thailand economist for HSBC in Hong Kong. "The moment political risk eased a little bit in Thailand, money was just pouring in the door."

Neumann said a similar thing was happening in Pakistan, where clashes Tuesday between the police and supporters of a radical mosque in Islamabad left at least 10 people dead.

"This Taliban-style gang takes control of a mosque and the currency is soaring ahead and the stock market is booming," Neumann said. The Karachi Stock Exchange index has risen about 38 percent since the beginning of the year.

In Thailand, the political situation is still unsettled. The general who led the September coup, Sonthi Boonyaratglin, has suggested that elections that were promised for this year could be pushed back to 2008. A group appointed by the generals has drafted a new constitution, but the timing and success of a nationwide referendum to ratify it remain in question.

What seems to have cheered investors is the generals' moves against the man they removed from power, Thaksin Shinawatra. In recent weeks, Thaksin's assets were frozen, he was charged with corruption and he and 110 of his allies were banned from politics for five years.

"It looks like the junta is getting its act together," Neumann said. "People are starting to look beyond the elections of November or December or whenever."

Yet the economic outlook for the country is mixed. Exports of Thai cars, electronics and agricultural products continue to surge - one reason for the continued appreciation of the baht. But the banking system now has one of the highest levels of nonperforming loans in Asia, 8.7 percent, according to Neruda, of UBS. By contrast, bad loans account for 2.9 percent of lending in Singapore and 0.6 percent in Hong Kong.

With domestic consumption low, the government hopes to prime the pump with a larger budget deficit planned for next year. Yet much of the increase is in military spending, which may not trickle down into the general economy.

Despite these doubts, foreigners continue to show considerable confidence in Thailand.

From January to May this year, the Thai Board of Investment received applications for 123 billion baht, or $3.9 billion, worth of foreign investment, up 35 percent from the same period last year.

The main Thai stock market index, largely driven by foreign buying, has risen about 21 percent since the beginning of the year. Foreign investors have bought $3 billion more than they have sold on the Thai stock exchange since January. Thai investors have been net sellers of the same amount.

Foreign tourists continue to arrive in record numbers despite the New Year bombings in Bangkok that killed three bystanders and the Muslim insurgency in southern Thailand. From January to April, 5 percent more foreign tourists arrived at Bangkok's international airport than in the same period last year. In Phuket, the increase was 21 percent and in Chiang Mai, 9 percent. Overall, about 14 million tourists visited Thailand in 2006.

Foreigners continue to buy property in Thailand, despite the prospect that the government will tighten foreign ownership laws.

"There is sustained real foreign interest both in Bangkok and the resort markets," said David Simister, chairman of the property consultants CB Richard Ellis in Thailand. "If we see an improved political situation, things could jump."

Buyers, both Thai and foreign, are willing to pay the equivalent of about $5,700 per square meter, or $530 per square foot, at the top end of the market, which includes condominiums in the center of Bangkok or facing the Chao Phraya River, he said.

Prices remained relatively stable after the coup, but some developers have added better furnishings to keep sales going. And interest seems to have heightened in recent weeks, he said. "We can report over the last two weeks quite a significant rise in viewing and bookings for units for sale," Simister said.

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[pkrv]

It would be an interesting response if Thailand ceased all output to the international community, not good, but interesting.