It's official - Thai real estate bubble pops.

[Number 6]

You can desire a home and be willing to pay for it but I really don't see any upside at these prices no matter what you are buying in whatever neighborhood.

 

There is no way I'd sink 1/3 my life savings into a condo, especially at these prices and as an American especially at the current x rates.

 

The flipside is that renting is a great value. I'll happily rent bc I've always done so preferring equities to real estate. I'm older, married, things are changing but with this glut of mediocre property all over Thailand, I don't ever have to buy.

 

Personally, I don't think much of anything is being sold.

 

555 to atrociously furnished condos especially new ones where the developer thinks it's value added lulz.

 

Keep the powder dry.

 

[hugh mckee]

21 minutes ago, Number 6 said:

 

There is no way I'd sink 1/3 my life savings into a condo, especially at these prices and as an American especially at the current x rates.

 

 

 

hey life is a gamble, I want to spend at 52 the rest of my UK winter months in a warm sunny climate, I want to live a stone's throw from the beach, I want this to be in my home, not someone else's, personally not interested in renting or rental prices, to achieve my wishes I had to pay just under 1/3 of my life's savings, for you no way you'd do that, that is fine, personally I would and have, if i am to spend half the rest of my life living abroad then I wish to be comfortable and for this I know I have to pay.

 

I'm in no way knocking anyone who prefers to rent and we all have different individual circumstances and brains, no 2 people think exactly the same....but I am knocking the insincerity of some of the posters who post on this topic, they don't think there's going to be a "property crash"..........THEY HOPE!

Edited September 27, 2017 by hugh mckee

[trogers]

While others look at microeconomics issues with sales performances, I suspect that the traditional measures might not be applicable in a world flushed with liquidity from the numerous QEs.

 

One significant observation I have is that the market has elbowed out developers who are not public listed.

 

Booking performance of new project launches are no longer a barometer for the actual sales transfer on construction competition because money to be committed by those who made bookings remain low.

 

Unlike say, Singapore, where those who booked would need to arrange funds for 80% of the sales price, paying in stages as construction proceeds.

 

So, the measure I am now studying is the inventory and sales volumes of the public listed developers in SET. Their activities are now largely fuelled by issuing debentures.

 

The tipping point for the market, I suspect, would be excessive build up of inventory coupled with poor sales transfer, and a crisis in the financial market that would cut off further cash flow support to these developers.

 

 

[hugh mckee]

1 hour ago, trogers said:

While others look at microeconomics issues with sales performances, I suspect that the traditional measures might not be applicable in a world flushed with liquidity from the numerous QEs.

 

One significant observation I have is that the market has elbowed out developers who are not public listed.

 

Booking performance of new project launches are no longer a barometer for the actual sales transfer on construction competition because money to be committed by those who made bookings remain low.

 

Unlike say, Singapore, where those who booked would need to arrange funds for 80% of the sales price, paying in stages as construction proceeds.

 

So, the measure I am now studying is the inventory and sales volumes of the public listed developers in SET. Their activities are now largely fuelled by issuing debentures.

 

The tipping point for the market, I suspect, would be excessive build up of inventory coupled with poor sales transfer, and a crisis in the financial market that would cut off further cash flow support to these developers.

 

 

"Unlike say, Singapore, where those who booked would need to arrange funds for 80% of the sales price, paying in stages as construction proceeds."

 

I looked at a few condos before making my choice, every single one of them had a large deposit, normally 30% and then staged payments, just like you describe in Singapore, meaning that on completion of construction you've already paid  approx' 60%  of the actual price so not sure of your point in comparing Thailand unfavourably with the Singapore model as from my experience they are similar.

Edited September 27, 2017 by hugh mckee

[hugh mckee]

7 minutes ago, hugh mckee said:

 

 

Edited September 27, 2017 by hugh mckee

[trogers]

22 minutes ago, hugh mckee said:

"Unlike say, Singapore, where those who booked would need to arrange funds for 80% of the sales price, paying in stages as construction proceeds."

 

I looked at a few condos before making my choice, every single one of them had a large deposit, normally 30% and then staged payments, just like you describe in Singapore, meaning that on completion of construction you've already paid  approx' 60%  of the actual price so not sure of your point in comparing Thailand unfavourably with the Singapore model as from my experience they are similar.

Some projects, in Pattaya or similar, have such payment terms for foreigners, but different terms for Thais.

 

Down payments for most projects in Bangkok cap at 20-30%.

 

The phenomenon of Resale Units in the Thai market is the reason I brought up Singapore as an example in how the payment terms weed out flippers who have no actual financial ability to close the sales.

Edited September 27, 2017 by trogers

[hugh mckee]

12 minutes ago, trogers said:

Some projects, in Pattaya or similar, have such payment terms for foreigners, but different terms for Thais.

 

Down payments for most projects in Bangkok cap at 20-30%.

no not some, all projects in pattaya I looked at had this had this, sure you already know this of course

 

more talking down on this forum of Thailand property market from guys with different agenda

 

why can't you guys just be honest? you have no clue what is going to happen in the future or even what is happening now but you like to make out that you do and I'd say that most of the guys who post on here supporting the argument that something bad is going to happen regarding the Thai property market do so as that is their hope....be honest I'm right, all you posters predicting a crash want this to happen but in reality have no clue if it is actually going to happen and all you do is speculate and hope that you are right without having any firm data or evidence, in fact most evidence up to now is to the contrary, there's been little movement in average selling prices for a very long time.

Edited September 27, 2017 by hugh mckee

[ExpatOilWorker]

2 hours ago, trogers said:

While others look at microeconomics issues with sales performances, I suspect that the traditional measures might not be applicable in a world flushed with liquidity from the numerous QEs.

 

One significant observation I have is that the market has elbowed out developers who are not public listed.

 

Booking performance of new project launches are no longer a barometer for the actual sales transfer on construction competition because money to be committed by those who made bookings remain low.

 

Unlike say, Singapore, where those who booked would need to arrange funds for 80% of the sales price, paying in stages as construction proceeds.

 

So, the measure I am now studying is the inventory and sales volumes of the public listed developers in SET. Their activities are now largely fuelled by issuing debentures.

 

The tipping point for the market, I suspect, would be excessive build up of inventory coupled with poor sales transfer, and a crisis in the financial market that would cut off further cash flow support to these developers.

 

 

I think you might me on to something here. The growth model of public listed companies can at time defy normal common financial logic. This is very similar to the shale gas revolution in the US, where Wall Street were showering operators in billion of $ as long as they kept increase their inventory, irregardless if they at the current time were making a profit or not (few were). It all came crashing down when oil price dropped by about half.

 

[trogers]

7 minutes ago, hugh mckee said:

no not some, all projects in pattaya I looked at had this had this, sure you already know this of course

 

more talking down on this forum of Thailand property market from guys with different agenda

 

why can't you guys just be honest? you have no clue what is going to happen in the future or even what is happening now but you like to make out that you do and I'd say that most of the guys who post on here supporting the argument that something bad is going to happen regarding the Thai property market do so as that is their hope....be honest I'm right, all you posters predicting a crash want this to happen but in reality have no clue if it is actually going to happen and all you do is speculate and hope that you are right without having any firm data or evidence, in fact most evidence up to now is to the contrary, there's been little movement in average selling prices for a very long time.

You have your opinion, and I have mine. And I bought my first condo in 1994.

 

I only share what I perceive as the undercurrents developing. Look at the financial reports of the public listed developers yourself.

[hugh mckee]

6 minutes ago, trogers said:

You have your opinion, and I have mine. And I bought my first condo in 1994.

 

I only share what I perceive as the undercurrents developing. Look at the financial reports of the public listed developers yourself.

yes well i'm obviously not as smart as you guys, if the developers who you say are now the big listed companies start to struggle financially then they build less condos in the future, wouldn't this then help the propery market? and not in fact help to cause a crash? it's not like they're going to start selling their existing condos on the cheap? correct me if I'm wrong but if what you describe is happening then less condos will get built in the future and that can only be a positive for the property market.

Edited September 27, 2017 by hugh mckee

[trogers]

1 minute ago, hugh mckee said:

yes well i'm obviously not as smart as you guys, if the developers who you say are now the big listed companies start to struggle

financially then they build less condos in the future, wouldn't this then help the propery market? and not in fact help to cause a crash? it's not like they're going to start selling their existing condos on the cheap? correct me if I'm wrong but if what you describe is happening then less condos will get built in the future and that can only be a positive for the property market.

Depends on debt to asset levels. If a few of them go bust, their unsold inventory would probably be on auctions, influencing market prices.

[hugh mckee]

9 minutes ago, trogers said:

Depends on debt to asset levels. If a few of them go bust, their unsold inventory would probably be on auctions, influencing market prices.

the more I read this forum the more I realise that it's all speculation from you guys and little fact and not to be taken seriously, I admit I made the mistake of taking you guys seriously and overestimated you, it's all if's but's and maybe's and a lot of wishful thinking and amateur opinions, in future I'll stick to the bangkok post or other news services, too many on here have their own agenda and as i said defintely not to be taken seriously.

Edited September 27, 2017 by hugh mckee

[trogers]

22 minutes ago, ExpatOilWorker said:

I think you might me on to something here. The growth model of public listed companies can at time defy normal common financial logic. This is very similar to the shale gas revolution in the US, where Wall Street were showering operators in billion of $ as long as they kept increase their inventory, irregardless if they at the current time were making a profit or not (few were). It all came crashing down when oil price dropped by about half.

 

Profit figures of developers are largely dependent on valuation of unsold inventory, rather than actual sales. Such a practice is like a house of cards.

[chrisandsu]

26 minutes ago, hugh mckee said:

the more I read this forum the more I realise that it's all speculation from you guys and little fact and not to be taken seriously, I admit I made the mistake of taking you guys seriously and overestimated you, it's all if's but's and maybe's and a lot of wishful thinking and amateur opinions, in future I'll stick to the bangkok post or other news services, too many on here have their own agenda and as i said defintely not to be taken seriously.

You want to take the bangkok post as serious reporting ? ?

All real estate bubbles are firmly entrenched with massive doses of speculation . Just yesterday I read the government are about to break ground in November for the high speed train from bkk to korat , that speculation has been going on for years where a lot of generals in bkk bought up massive amounts of land around korat and pak Chong . The land prices are now ten times the price they were ten years ago! the generals have become super rich out of 'speculation' !! I will do ok as well but I won't hold my breath until it happens . 

[cheeryble]

A year ago I moved out of a small wooden house, cabin really, I had rented for about 12 years.

It was a bit of a dump but well located and countrified but in stone's throw of town.

I paid 5000pm. That's about 750,000 in all (I actually kept possession longer until I could house a dog.) 

I would guess that house cost not a penny more than 300k to build, likely less, because after about half term I heard the landlord was spending 400k for new units. 

I spent money doing ht place up and liked my time there a lot.

I was happy enough.......but look at the deal for the landlord.

He got the land for a song.....about half with chanoot for quite a few rai.

I paid for his build, then paid for it again and half again.

I left the place much improved with more area under cover and a concrete fish pond and fountain.

I would guess his land value has tripled or more in my tenancy, not that he;s selling.

 

Only an anecdote.

[hugh mckee]

2 hours ago, chrisandsu said:

You want to take the bangkok post as serious reporting ? ?

All real estate bubbles are firmly entrenched with massive doses of speculation . Just yesterday I read the government are about to break ground in November for the high speed train from bkk to korat , that speculation has been going on for years where a lot of generals in bkk bought up massive amounts of land around korat and pak Chong . The land prices are now ten times the price they were ten years ago! the generals have become super rich out of 'speculation' !! I will do ok as well but I won't hold my breath until it happens . 

yes and there's speculation about high speed trains from BKK to pattaya, the local airport expanding be to be thailands no 4 airport, speculation about much better roads and even speculation Pattaya could boom from casinos, speculation about chinese starting to buy, about Russians coming back as their economy and oil price improves...blah blah blah, point is you could write a lot of stuff to actually talk up the property prices too but it would be wrong as it's all if's but's and maybe's but that's exactly what this topic is except it's dominated by guys talking property prices down, not because that's what they believe but instead what they hope for.

 

so far only evidence is that despite many many detrimental things happening in pattaya there has been no crash, can't comment on the rest of thailand but after a bit of reading on Pattaya it's easy to see the motivation of many of the posts on this topic.

Edited September 27, 2017 by hugh mckee

[trogers]

6 hours ago, hugh mckee said:

yes and there's speculation about high speed trains from BKK to pattaya, the local airport expanding be to be thailands no 4 airport, speculation about much better roads and even speculation Pattaya could boom from casinos, speculation about chinese starting to buy, about Russians coming back as their economy and oil price improves...blah blah blah, point is you could write a lot of stuff to actually talk up the property prices too but it would be wrong as it's all if's but's and maybe's but that's exactly what this topic is except it's dominated by guys talking property prices down, not because that's what they believe but instead what they hope for.

 

so far only evidence is that despite many many detrimental things happening in pattaya there has been no crash, can't comment on the rest of thailand but after a bit of reading on Pattaya it's easy to see the motivation of many of the posts on this topic.

Japan has shown in 1991 that a bubble need not burst. Just slowly deflate over two decades.

 

Compare such a scenario to the sub-prime housing crisis of the US.

 

While there has been no crash in Pattaya since the Russians fled, how many abandoned projects occurred, compared to Bangkok?

 

Are condo units in the secondary market exchanging hands at normal levels and prices. Or are there a hundred units fighting over a customer?

[inThailand]

Phuket property market has been declining yearly for at least four years. I hope we don't have to depend on the Russians to revive it.

[trogers]

49 minutes ago, inThailand said:

Phuket property market has been declining yearly for at least four years. I hope we don't have to depend on the Russians to revive it.

Prices in Phuket would need to deflate for quite a few more years so that the cost of living equal Bangkok.

 

There was a joke shared in my office about 20 years ago that the cost of living in Phuket is similar to Singapore, as we priced construction projects there.

[inThailand]

When I first came here I rarely saw anything put on sale. Now you see sales regularly and companies have conditioned consumers to buy only when on sale. I am waiting for developers to join the party. 

[ExpatOilWorker]

18 hours ago, hugh mckee said:

the more I read this forum the more I realise that it's all speculation from you guys and little fact and not to be taken seriously, I admit I made the mistake of taking you guys seriously and overestimated you, it's all if's but's and maybe's and a lot of wishful thinking and amateur opinions, in future I'll stick to the bangkok post or other news services, too many on here have their own agenda and as i said defintely not to be taken seriously.

Trogers actually know his stuff when it comes to real-estate, so you could learn something here, but your seem entrenched in your own thinking. Try watching a movie like The Big Short, sometimes a smart few guys can see through hype.

[hugh mckee]

52 minutes ago, ExpatOilWorker said:

Trogers actually know his stuff when it comes to real-estate, so you could learn something here, but your seem entrenched in your own thinking. Try watching a movie like The Big Short, sometimes a smart few guys can see through hype.

I've no doubt Trogers is a smart guy........if you actually asked him is there any certainty of a crash in Thailand property?

his answer would have to be....I don't know, I am not sure or similar.......he is only speculating on one possible outcome and using his knowledge to predict an as of yet not to materialise event....or am I wrong and you can answer with confidence?

 

Trogers, you're a smart guy, tell us what you believe is going to happen with Thai property in the next few years and we can see in the future by reading on here how accurate you actually were.

 

 it's all speculation and as for hype expatworker, there is plenty of hype on here on this topic, all negative of course, I'll stick to facts and figures and not rely on holywood and movies or guys on here with their own agenda as for "learning something here", as you advise expatworker, not the smartest thing to believe faceless posters on an internet forum who consistently contradict the Bangkok Post or similar publications because these faceless internet posters actually know better............really?

 

expatworker as smart as you think Trogers is, he doesn't know what the future holds for Thailand's property market.

 

 

 

 

Edited September 28, 2017 by hugh mckee

[Senechal]

5 hours ago, hugh mckee said:

 

 it's all speculation and as for hype expatworker, there is plenty of hype on here on this topic, all negative of course, I'll stick to facts and figures and not rely on holywood and movies or guys on here with their own agenda as for "learning something here", as you advise expatworker, not the smartest thing to believe faceless posters on an internet forum who consistently contradict the Bangkok Post or similar publications because these faceless internet posters actually know better............really?

 

expatworker as smart as you think Trogers is, he doesn't know what the future holds for Thailand's property market.

 

 

Well, yes it's all speculation... But reversion to the mean can be a b*tch. 

 

Before 2012, Bangkok real-estate was sucking wind. Then starting in Q4 2012, Bangkok prices officially went nuts.

 

Then they seem to have hit a high plateau in Q4 2014.

 

Now either you believe there's been a major paradigm shift in Thai real estate and economics....

 

 

....Or we touch the trendline again.

 

We'll see.

 

I just hope they keep building. Don't stop fellas... keep building as fast as you can 

 

 

 

Edited September 28, 2017 by Senechal

[cheeryble]

Just saw the below private ad in CM.

oddly I had previously heard that  a hotshot sales outfit working abroad had sold the place out almost instantly.....foreign quota maybe who knows. Anyway this small modest quality looking unit is for sale and he says the going prices are a lot more than he paid to secure. Who knows.

photos on FBSeckndhand CM search Prio.

 

Prio Condo booking for sale 250,000 baht save 500k on retail price!
 
I am selling my booking for the Prio condo as I have brought a house instead! The current price for the rooms are 2.7 to 2.9 you will be buying at 2.25 so a saving of at least 500,000 baht! Partial furnished with aircons you can see the room in the picture.
 
1 bedroom, 1 bathroom unit ready to move in.
 
The unit is in a great location with pool and fitness, and you can walk across the road to the airport plaza. Also great access into the Airport. You can be in the center of town in less than 5 mins.
You wont find this unit at this price anywhere else, and you can go to check the quality of the building and view the unit at any time, just let me know before hand. If I don’t sell it in the next 2 weeks I will keep it.

 

 

[sanemax]

8 minutes ago, cheeryble said:

Anyway this small modest quality looking unit is for sale and he says the going prices are a lot more than he paid to secure.

It doesnt state how much he paid, it just stated the going price today .

He may have paid a lot less money a while ago

[Senechal]

3 minutes ago, sanemax said:

It doesnt state how much he paid, it just stated the going price today .

He may have paid a lot less money a while ago

I'm not sure how this discussion is relevant to the topic though.

 

What does one dude's attempt to exit his off-plan room-purchase in a CM development have to do with anything?

 

If anything it's a completely specific datapoint in an otherwise general discussion. And it's not even clear what this datapoint represents. : /

 

Wrong thread maybe?

Edited September 28, 2017 by Senechal

[funandsuninbangkok]

Lookin bad

 

[hugh mckee]

1 hour ago, funandsuninbangkok said:

Lookin bad

 

http://property.bangkokpost.com/news/1306799/psh-upbeat-on-revenue-target-despite-h1-slump

 

maybe you don't want to read? had a look at Pruska, to see what they were saying after those bad results?

no talk of slump, actually quite bullish and expecting growth this financial year.

 

of course you don't want to read this

[funandsuninbangkok]

1 minute ago, hugh mckee said:

http://property.bangkokpost.com/news/1306799/psh-upbeat-on-revenue-target-despite-h1-slump

 

maybe you don't want to read? had a look at Pruska, to see what they were saying after those bad results?

no talk of slump, actually quite bullish and expecting growth this financial year.

 

of course you don't want to read this

Well I guess you can look at the numbers and see what they have done OR you can listen to the PR about what they will do. Up to you friend. ?

[hugh mckee]

1 hour ago, funandsuninbangkok said:

Lookin bad

 

BRIEF-Sansiri posts quarterly net profit of 805.1 mln baht

 

Reuters Staff

1 Min Read

Aug 15 (Reuters) - Sansiri Pcl

* Quarterly net profit 805.1 million baht versus 622.3 million baht

* Quarterly total revenues 8.66 billion baht versus 8.24 billion baht Source text for Eikon: Further company coverage:

 

fake news from you funandsuninbangkok, your one man crusade to cause a slump continues.

Edited September 28, 2017 by hugh mckee