Rent divided by Buy Price Numbers for condos in Bangkok

[funandsuninbangkok]

48 minutes ago, blackcab said:

 

I asked before but got no reply from you.

 

What sort of percentage reductions do you envisage?

I actually don't work on price. Value is how I buy. If I can rent something for less than 3% yield I'd rather rent and invest in US REITs and get double.  If I can buy property and get 7+% yield AFTER expenses,I'll buy. 

 

Thai property I usually see is at about 2% yield, after expenses. Need prices down 70% or rents to. come up. Or Combo of both. 

 

Might happen on larger units in future. 

 

Small units are worthless and will be empty for years. 

Edited February 14, 2017 by funandsuninbangkok

[trogers]

2 hours ago, funandsuninbangkok said:

I actually don't work on price. Value is how I buy. If I can rent something for less than 3% yield I'd rather rent and invest in US REITs and get double.  If I can buy property and get 7+% yield AFTER expenses,I'll buy. 

 

Thai property I usually see is at about 2% yield, after expenses. Need prices down 70% or rents to. come up. Or Combo of both. 

 

Might happen on larger units in future. 

 

Small units are worthless and will be empty for years. 

Careful. Larger units in the same building comprising mainly of small units would suffer the same fate as the small units. A ghost building don't appreciate and faces shortage of funds for maintenance.

[funandsuninbangkok]

4 hours ago, trogers said:

Careful. Larger units in the same building comprising mainly of small units would suffer the same fate as the small units. A ghost building don't appreciate and faces shortage of funds for maintenance.

Agreed. Large units only with expat families. 

 

Small units infested with drunks and English teachers. 

[chrisandsu]

Thais can hold on to property simply because it's a way of stashing money . You can't hide all of it under your bed ! Can you imagine what would happen if a property tax / poll tax was implemented in thailand ? You could pick these boxes up for pennies .

[Cinderella Man]

13 hours ago, Steiner said:

4/. As a guide for rental values vs purchase price,  divide the purchase price by 1,000 and multiply by 5, you will be pretty close. 

Pm me if you want some help,  I have 11,000 owners in my database and years of experience in Bkk. 

We manage a lot of properties for rental that we helped purchase. 

That would mean unit I rent would be 35k a month, but I rent it for 24k and easily to be found for 25k

 

 

[trogers]

37 minutes ago, Cinderella Man said:

That would mean unit I rent would be 35k a month, but I rent it for 24k and easily to be found for 25k

 

 

Some databases need urgent updating...?

[blackcab]

2 hours ago, Cinderella Man said:

That would mean unit I rent would be 35k a month, but I rent it for 24k and easily to be found for 25k

 

Or it could mean the owner paid too much for the unit.

[trogers]

4 hours ago, Cinderella Man said:

That would mean unit I rent would be 35k a month, but I rent it for 24k and easily to be found for 25k

 

 

 

2 hours ago, blackcab said:

 

Or it could mean the owner paid too much for the unit.

Or that the owner speculated that the unit will appreciate in price and did not mind getting only a 3% rental yield.

 

That means, a greater fool will come along to buy it over at a future date to earn a 2% rental yield or lower...

 

Seems history would just repeat. Before the great asset bubble burst of Japan in 1990, properties were giving rental yields below 1%...

[funandsuninbangkok]

11 hours ago, chrisandsu said:

Thais can hold on to property simply because it's a way of stashing money . You can't hide all of it under your bed ! Can you imagine what would happen if a property tax / poll tax was implemented in thailand ? You could pick these boxes up for pennies .

 

A new property tax and a new death tax have both been passed. Interestingly only applies to Thai property. Off shore tax free for Thai residents. Another reason not to buy here. 

[funandsuninbangkok]

Of course if you just prefer to own rather than rent and are going to stay long term and have the cash, why not buy?

 

nothing wrong with sentiment. 

 

Same reason people get married. 

 

But it it is expensive. 

Edited February 15, 2017 by funandsuninbangkok

[funandsuninbangkok]

7 hours ago, trogers said:

 

Or that the owner speculated that the unit will appreciate in price and did not mind getting only a 3% rental yield.

 

That means, a greater fool will come along to buy it over at a future date to earn a 2% rental yield or lower...

 

Seems history would just repeat. Before the great asset bubble burst of Japan in 1990, properties were giving rental yields below 1%...

Anyone who's bought a new small unit recently will find they are in negative yield once they try to sell. 

 

Today on ddproperty there are 72,000 units in Bangkok for sale. 72K!

 

condo population has doubled in 5 years and still going up. Pop!

Edited February 15, 2017 by funandsuninbangkok

[trogers]

7 hours ago, funandsuninbangkok said:

Of course if you just prefer to own rather than rent and are going to stay long term and have the cash, why not buy?

 

nothing wrong with sentiment. 

 

Same reason people get married. 

 

But it it is expensive. 

Buying a property near the peak of a cycle will always be expensive. Just don't do it with borrowed funds, especially in a foreign currency.

 

The Tomyum Kung crisis was due to coporates holding too much debts in foreign currencies...

[Bassosa]

On 15/02/2017 at 3:39 AM, funandsuninbangkok said:

 

 

banks bad loans up 100% in last year. Massive credit crunch. 

 

Interest rates headded up

 

Thai exports down

 

hot summer comin'

 

wait for the storm, then buy

1

 

 If you do a search here on TV you will find posters mentioning "the storm that's certain to come" every year since 2005.

 

Yet here we are, 12 years later, still waiting...

[trogers]

57 minutes ago, Bassosa said:

 

 If you do a search here on TV you will find posters mentioning "the storm that's certain to come" every year since 2005.

 

Yet here we are, 12 years later, still waiting...

I look at rental yield for an indication of a coming storm, and it is now at 3%.

 

Not long now.

 

During the sub-prime fiasco of the US, their rental yield was near 4%. That's a market that is less sticky and relies much on debts to finance speculation.

 

Bangkok only needs one more wave of development to see queues at the Consumer Protection Board about abandoned projects.

 

Those in Pattaya and Phuket has started.

[Allstars]

4 minutes ago, trogers said:

I look at rental yield for an indication of a coming storm, and it is now at 3%.

 

Not long now.

 

During the sub-prime fiasco of the US, their rental yield was near 4%. That's a market that is less sticky and relies much on debts to finance speculation.

 

Bangkok only needs one more wave of development to see queues at the Consumer Protection Board about abandoned projects.

 

Those in Pattaya and Phuket has started.

 

I have a friend who supplies a specific item to most of the projects going in Pattaya, and he told me that most of the projects that aren't finished yet are in big doodoo. Some will be able to keep their head above water ( read satisfy the bank ), as they are already in an advanced phase of the project and sell units at far reduced prices, but many are behind bank payments already and probably will be confiscated at some time.

[Allstars]

1 hour ago, Bassosa said:

 

 If you do a search here on TV you will find posters mentioning "the storm that's certain to come" every year since 2005.

 

Yet here we are, 12 years later, still waiting...

In 2005 there was rarely a project behind schedule, unless it was a right out scam, now 90% of the projects are behind schedule and not just a few months.

[funandsuninbangkok]

1 hour ago, Bassosa said:

 

 If you do a search here on TV you will find posters mentioning "the storm that's certain to come" every year since 2005.

 

Yet here we are, 12 years later, still waiting...

Well 2005 was probably the peak of residential construction in the US so reasonable call. Many properties in US are just now getting back to this level. Many are still lower than 2005 price levels in US. 

 

Thailand very much has a 2005 feel to it. Massive construction. Heavy loan burden. Big drop in sales. 

 

Crash is  here. Can't you hear it?

[Bassosa]

The market in 2005 probably had a 1997 feel to it.

 

The Thai real estate market may be deeply flawed, but it still functions.

 

Thai culture is also deeply flawed and guess what, people get by and there is growth.

 

The crash predicted by so many since way back has never eventuated. In the meantime astute investors have made money while everyone else was 'hearing a crash'.

 

Not saying it won't happen btw. Just think there might be some wishful thinking involved here.

 

PS. I don't have any money invested in Thai real estate (or Thailand in general). I opted out for other reasons.

Edited February 16, 2017 by Bassosa

[funandsuninbangkok]

1 hour ago, Bassosa said:

The market in 2005 probably had a 1997 feel to it.

 

The Thai real estate market may be deeply flawed, but it still functions.

 

Thai culture is also deeply flawed and guess what, people get by and there is growth.

 

The crash predicted by so many since way back has never eventuated. In the meantime astute investors have made money while everyone else was 'hearing a crash'.

 

Not saying it won't happen btw. Just think there might be some wishful thinking involved here.

 

PS. I don't have any money invested in Thai real estate (or Thailand in general). I opted out for other reasons.

Thai real estate market works?

 

how do you explain the massive supply of empty units?

 

crumbling buildings?

 

property priced at 2/3/4 times the properties right next to it?

 

units for sale for 10 years! Yes, 10 years I have seen same units pitched by newish brokers. Google "resort in town". 

 

unending stories of ripoffs and boondoggles?

 

I've never see a less "working " market in my life. 

[Bassosa]

You said it, it's fundamentally flawed...

[trogers]

2 hours ago, funandsuninbangkok said:

Thai real estate market works?

 

how do you explain the massive supply of empty units?

 

crumbling buildings?

 

property priced at 2/3/4 times the properties right next to it?

 

units for sale for 10 years! Yes, 10 years I have seen same units pitched by newish brokers. Google "resort in town". 

 

unending stories of ripoffs and boondoggles?

 

I've never see a less "working " market in my life. 

There is opportunities in imperfection...one needs patience and time...

[blackcab]

On 16/02/2017 at 0:13 AM, funandsuninbangkok said:

A new property tax and a new death tax have both been passed.

 

The law concerning property tax has been passed by the NLA, but as far as I am aware it hasn't been promulgated in the Royal Gazette yet.

[chrisandsu]

10 minutes ago, blackcab said:

 

The law concerning property tax has been passed by the NLA, but as far as I am aware it hasn't been promulgated in the Royal Gazette yet.

Yeah that's strange . My wife owns a house and property but pays no tax . When do I expect a bill ? 

[Bulldozer Dawn]

On 2/16/2017 at 11:52 AM, trogers said:

I look at rental yield for an indication of a coming storm, and it is now at 3%.

 

Not long now.

 

During the sub-prime fiasco of the US, their rental yield was near 4%. That's a market that is less sticky and relies much on debts to finance speculation.

 

Bangkok only needs one more wave of development to see queues at the Consumer Protection Board about abandoned projects.

 

Those in Pattaya and Phuket has started.

Trogers

 

You say not long now until the property crash.  How long exactly?

 

Still lots of people guzzling Thai property Kool Aid.

 

This hot off the press from Bualuang this morning:

 

AREA’s Jan 2017 survey reported surprisingly few launches, but reassured the market ahead of increasing activity in Feb and Mar with a good take-up rate for the first month of the year. Coverage presales should rebound YoY and QoQ in 1Q17.  Sector valuations are at bargain levels, with a BLS ResDev coverage FY17 PER of 8.5x, near the last correction in 1H16 and below the FY06-16 mean of 10.6x. We suggest Selective Buys of developers with exciting stories in 4Q16 and 2017--ANAN, AP, LPN, SPALI and SIRI.

 

SIRI is up 25% since January.  Has a 100 % dividend payout history and a currently quoted yield of 6.8 %.

 

SIRI rallied up strongly again yesterday is and currently knocking on the 2 baht per share resistance level.  Predicted target price is 2.10.

 

For anyone that is interested, you can view live price quotes for ANAN, AP, LPN, SPALI, SIRI here:

 

Live Price Quotes

 

 

 

 

Edited February 17, 2017 by Bulldozer Dawn

[trogers]

21 minutes ago, Bulldozer Dawn said:

Trogers

 

You say not long now until the property crash.  How long exactly?

 

Still lots of people guzzling Thai property Kool Aid.

 

This hot off the press from Bualuang this morning:

 

AREA’s Jan 2017 survey reported surprisingly few launches, but reassured the market ahead of increasing activity in Feb and Mar with a good take-up rate for the first month of the year. Coverage presales should rebound YoY and QoQ in 1Q17.  Sector valuations are at bargain levels, with a BLS ResDev coverage FY17 PER of 8.5x, near the last correction in 1H16 and below the FY06-16 mean of 10.6x. We suggest Selective Buys of developers with exciting stories in 4Q16 and 2017--ANAN, AP, LPN, SPALI and SIRI.

 

SIRI is up 25% since January.  Has a 100 % dividend payout history and a currently quoted yield of 6.8 %.

 

SIRI rallied up strongly again yesterday is and currently knocking on the 2 baht per share resistance level.  Predicted target price is 2.10.

 

For anyone that is interested, you can view live price quotes for ANAN, AP, LPN, SPALI, SIRI here:

 

Live Price Quotes

 

 

 

 

The keyword - Good takeup rate!

 

The stock market loves spontaneous good news. Takeup rates means bookings, not actual sales and transfer.

 

One can always pretty up takeup rates by easing booking fees and low down payments. Speculators and flippers abound.

 

Fast forward two years and we hear the news about high rejection rates by banks on mortgage applications...

 

The unsold units then fall into the fog swamp of Resales units, languishing for years and out of the sight of stockmarket players...

 

If their projects are so successful, why would their sales offices still be active years after project completion, below those advertisements on Sales and Rent?

 

 

[Bulldozer Dawn]

1 minute ago, trogers said:

The keyword - Good takeup rate!

 

The stock market loves spontaneous good news. Takeup rates means bookings, not actual sales and transfer.

 

One can always pretty up takeup rates by easing booking fees and low down payments. Speculators and flippers abound.

 

Fast forward two years and we hear the news about high rejection rates by banks on mortgage applications...

 

The unsold units then fall into the fog swamp of Resales units, languishing for years and out of the sight of stockmarket players...

 

If their projects are so successful, why would their sales offices still be active years after project completion, below those advertisements on Sales and Rent?

 

 

So your prediction for the crash is in two years time?

[trogers]

1 minute ago, Bulldozer Dawn said:

So your prediction for the crash is in two years time?

I wouldn't say a crash. More a deflation, because financing banks had already sense the high risk and reined in easy mortgage terms since late 2015.

 

In a deflation, bookings will fall below 50% of a new launch, and unsold units of completed projects exceeding 50%.

 

These will be seen in projects of those public-listed developers. Private developers cannot even get bank loans to start construction...

[Bulldozer Dawn]

7 minutes ago, trogers said:

I wouldn't say a crash. More a deflation, because financing banks had already sense the high risk and reined in easy mortgage terms since late 2015.

 

In a deflation, bookings will fall below 50% of a new launch, and unsold units of completed projects exceeding 50%.

 

These will be seen in projects of those public-listed developers. Private developers cannot even get bank loans to start construction...

So, in your view not a Tom Yum Goong repeat?

[blackcab]

1 hour ago, chrisandsu said:

Yeah that's strange . My wife owns a house and property but pays no tax . When do I expect a bill ? 

 

Not during 2017, because the old tax system is still being used (tax demands are being issued right about now).

 

Don't forget that your wife won't be taxed on her principle residence (as long as it isn't worth a lot of money!) - As long as she is listed in the house book.

[trogers]

3 minutes ago, Bulldozer Dawn said:

So, in your view not a Tom Yum Goong repeat?

No. Not a financial crisis of such a proportion. Buyers using cash will see the cash locked into a unit with no hope of appreciation for a decade or more.

 

And there would be more foreclosure on loan defaults.

 

Auctions would be the place to pick up bargains.