It's official - Thai real estate bubble pops.

[Naam]

Quote

China's estimated demand (dated 2015) of housing units till 2040 between 18 and 22 million per annum.

 

1 hour ago, trogers said:

There is a big difference between Demand and Effective Demand.

let's meet again in 2040 and evaluate the situation.

[trogers]

1 hour ago, Naam said:

 

let's meet again in 2040 and evaluate the situation.

Didn't even need a decade to achieve the Sub-Prime crisis for the US when they ignored the difference between Demand and Effective Demand.

[Naam]

5 minutes ago, trogers said:

Didn't even need a decade to achieve the Sub-Prime crisis for the US when they ignored the difference between Demand and Effective Demand.

the subprime crisis had nothing to do with demand for immobile property. it was caused by financial greed of banksters rotating the big wheel.

[trogers]

1 minute ago, Naam said:

the subprime crisis had nothing to do with demand for immobile property. it was caused by financial greed of banksters rotating the big wheel.

Offering home mortgages to those who wants to buy (demand) but who could not afford (not effective demand), is the start of bad loans.

 

The bankers created such bad loans and packaged them as tradable financial assets.

[ExpatOilWorker]

5 hours ago, Naam said:

China's estimated demand (dated 2015) of housing units till 2040 between 18 and 22 million per annum.

The lofty forecast for China are bringing back memories from NASDAQ in 1999 when Corning and Extreme Networks were digging up Americans streets and laying miles of miles of "dark" fiber optic cables in anticipation of eternal growth in bandwidth demand. 

What will happen if there is a drop or even a pause in the housing demand in China while supply is still pouring onto the market supported by borrowed money?

In the west we are used to financial crises every 10-12 years and the remedy is always to throw a few politician to the wolfs, elect a new government and like lemmings we (they, not us of course) move forward and believe in the new dream.

China have had 30 years of positive growth, how will they handle a financial crises?

 

Edited October 8, 2017 by ExpatOilWorker

[ExpatOilWorker]

2 hours ago, Naam said:

 

let's meet again in 2040 and evaluate the situation.

That is a bit of a long cliff-hanger, lets check again in 2020.

[Naam]

1 hour ago, ExpatOilWorker said:

4 hours ago, Naam said:

let's meet again in 2040 and evaluate the situation.

That is a bit of a long cliff-hanger, lets check again in 2020.

look at China's history. three years mean nothing. by the way, i will not participate in any ridiculous gloom&doom forecasts as per a thread two 2 (?) years ago here on TVForum where China's downfall was prophesied to be imminent. thinking back i can't help grinning as i grinned for more than a decade reading the wishful thinking about Thailand's economy and its currency falling into the abyss .

Edited October 8, 2017 by Naam

[cheeryble]

7 hours ago, Naam said:

China's estimated demand (dated 2015) of housing units till 2040 between 18 and 22 million per annum.

 

Thats ballpark only 1.5 units........probably very small units......per 100 citizens. Dont sound like much to me.

on the concrete side, I’d been thinking a lot would be going into infrastructure.

Ain't infrastructure a positive thing for future growth?....especially at a time of cheap money ( which cheap money Trump and Co seem determined to miss out on)

Edited October 8, 2017 by cheeryble

[trogers]

Asset Bubbles

 

Bursting of the Bubble

 

100 years wait for Return of Investment

 

Sounds familiar? But due to the vigilance of the major Thai banks, when they started raising the hurdles on application for mortgages since 2015, any popping of bubbles would mainly affect the cash wealth of speculators.

Edited October 9, 2017 by trogers

[cheeryble]

12 minutes ago, trogers said:

Asset Bubbles

 

Sounds familiar? But due to the vigilance of the major Thai banks, when they started raising the hurdles on application for mortgages since 2015, any popping of bubbles would mainly affect the cash wealth of speculators.

 

Fair enough for Andy Xi to write his opinion.

He may be right, but it has to be noted he's betting little or (more likely) nothing against all those who make the stockmarket price what it is, putting real money on the table.

Edited October 9, 2017 by cheeryble

[ExpatOilWorker]

16 hours ago, cheeryble said:

  On 10/8/2017 at 2:39 PM, Naam said:

China's estimated demand (dated 2015) of housing units till 2040 between 18 and 22 million per annum.

16 hours ago, cheeryble said:

 

Thats ballpark only 1.5 units........probably very small units......per 100 citizens. Dont sound like much to me.

on the concrete side, I’d been thinking a lot would be going into infrastructure.

Ain't infrastructure a positive thing for future growth?....especially at a time of cheap money ( which cheap money Trump and Co seem determined to miss out on)

On the contrary, it is a lot, in fact it is am astronomic number. China is in many ways 20 times bigger than Thailand, land mass, population GDP'ish, etc.

Does Thailand have a housing demand of 900,000- 1 million per year? Absolutely not.

 

Probably closer to 100,000 (http://www.property-report.com/detail/-/blogs/thailand-real-estate-relentless-expensive-and-highly-desira-13)

Edited October 9, 2017 by ExpatOilWorker

[ExpatOilWorker]

2 hours ago, trogers said:

Asset Bubbles

 

Bursting of the Bubble

 

100 years wait for Return of Investment

 

Sounds familiar? But due to the vigilance of the major Thai banks, when they started raising the hurdles on application for mortgages since 2015, any popping of bubbles would mainly affect the cash wealth of speculators.

I guess it is safe to conclude that The South China Morning Post is best used to wrap fish:

 

"The misguided monetary policy (of the Fed) may be the culprit", The Central bank of China also joined the QE party.

 

" Germany and Japan do not have significant asset bubbles." Japan had the mother of all asset bubbles in the '80, but the kid that wrote the article was probably not even conceived back then.

 

"While Western central bankers can stop making things worse, only China can restore stability in the global economy." In your wet dreams. If they relax capital control China will bleed dry of foreign capital.

 

"The most likely cause for the bubble to burst would be the rising political tension in the West." What?

 

"Andy Xie is an independent economist" Andy makes fish wrapping paper.

Edited October 9, 2017 by ExpatOilWorker

[Naam]

2 hours ago, ExpatOilWorker said:

On the contrary, it is a lot, in fact it is am astronomic number. China is in many ways 20 times bigger than Thailand, land mass, population GDP'ish, etc.

Does Thailand have a housing demand of 900,000- 1 million per year? Absolutely not.

 

Probably closer to 100,000 (http://www.property-report.com/detail/-/blogs/thailand-real-estate-relentless-expensive-and-highly-desira-13)

per capita comparisons are most of the time milkmaid estimates.

 

can one compare Thailand's economic success of the last several decades with China's success? are Chinese real estate business people idiots? 

[trogers]

2 hours ago, ExpatOilWorker said:

I guess it is safe to conclude that The South China Morning Post is best used to wrap fish:

 

"The misguided monetary policy (of the Fed) may be the culprit", The Central bank of China also joined the QE party.

 

" Germany and Japan do not have significant asset bubbles." Japan had the mother of all asset bubbles in the '80, but the kid that wrote the article was probably not even conceived back then.

 

"While Western central bankers can stop making things worse, only China can restore stability in the global economy." In your wet dreams. If they relax capital control China will bleed dry of foreign capital.

 

"The most likely cause for the bubble to burst would be the rising political tension in the West." What?

 

"Andy Xie is an independent economist" Andy makes fish wrapping paper.

Doesn't change the fact that there are buyers willing to wait 100 years, or hope another fool come along who is willing to wait 120 years.

[cheeryble]

10 hours ago, ExpatOilWorker said:

On the contrary, it is a lot, in fact it is am astronomic number. China is in many ways 20 times bigger than Thailand, land mass, population GDP'ish, etc.

Does Thailand have a housing demand of 900,000- 1 million per year? Absolutely not.

 

Probably closer to 100,000 (http://www.property-report.com/detail/-/blogs/thailand-real-estate-relentless-expensive-and-highly-desira-13)

Rapid urbanisation based on industrialisation in China is the difference.

Similar to what Naam said I suppose.

1.5 tiny units per 100 folk in a country that's undergoing an economic revolution?

 

In any case these mini-units being built in CM for instance are sized to make them suitable for the Thai class of workers who can afford about 10k baht pm mortgage as a single or a couple sharing.......nurses, bank tellers, etc etc who are the demographic no longer happy to stay living on the family lot in the country. I think this type of unit will not tempt many farang many of whom will always be in the market.......and more arrive every year. Meaning quality units of adequate size in good locations are all I'm interested in, and I see the very few meeting these criteria now being largely built out of town (Astra etc, apart from a few already up like Nimmana which largely has views onto itself, which brings to mind Mark Twain's "There's only so much land" and must be the reason for the older ones I consider meeting essential criteria like best locations in town will remain solid bets.

[trogers]

Bubble bursts in the UK?

 

Would there be a domino effect on major cities around the globe?

[midas]

On 10/10/2017 at 6:32 AM, trogers said:

Bubble bursts in the UK?

 

Would there be a domino effect on major cities around the globe?

I think the answer is yes

 

 

 

[trogers]

49 minutes ago, midas said:

I think the answer is yes

 

 

 

I like the pic at the end of this video clip - see no evil, hear no evil, and speak no evil, compliments of the bull...

[Number 6]

I think very much so whether it's retail condo buyers or developers looking to finance that next genius 6000 unit, 24sqm development. When the shtf all the money will go scampering back to their holes. 

 

As an aside, I was walking thru my local malls and saw a number off proposed developments on display, replete with pretties. I had an epiphany thinking, I bet they are not even going to try and build these things. They'll just take the money, run and let the poor slobs attempt to challenge them in court. Just sad the country allows this. If Thailand created laws that no units could be sold until completed and inspected and the govt guarantees the structure and the interior for 8 years, that would breathe life into the market. Trust.

 

Everywhere I look, condo's advertising buy, sell, rent so they've obviously given up on the sales side.

 

I'm just wondering how all these developments are continually financed.

[midas]

On 10/10/2017 at 6:32 AM, trogers said:

Bubble bursts in the UK?

 

Would there be a domino effect on major cities around the globe?

 

trogers your link provided an insight into UK and then the video clip showed what’s happening in USA. So what about the world’s second-largest economy? Coincidentally on Al Jazeera “ Witness “ this morning they showed one of the most fascinating documentaries I’ve seen for a while-you could even say it was a short anatomy of a boom and bust. Tell me why these same conditions don't apply in Thailand?

 

What was most noticeable to me was how little investors concentrated on the maths and to whether it was feasible to buy a particular condominium but instead based their decisions on unrelated and irrelevant factors. In essence it shows the property market there had no more substance than candy floss. Towards the end of the documentary you then see how violent the condominium buyers became after property prices began to collapse.

 

It’s 47 minutes long but it’s well worth the time to watch it

 

http://www.aljazeera.com/programmes/witness/2015/09/chinese-dreamland-150916144034085.html

[ExpatOilWorker]

16 minutes ago, midas said:

 

trogers your link provided an insight into UK and then the video clip showed what’s happening in USA. So what about the world’s second-largest economy? Coincidentally on Al Jazeera “ Witness “ this morning they showed one of the most fascinating documentaries I’ve seen for a while-you could even say it was a short anatomy of a boom and bust. Tell me why these same conditions don't apply in Thailand?

 

What was most noticeable to me was how little investors concentrated on the maths and to whether it was feasible to buy a particular condominium but instead based their decisions on unrelated and irrelevant factors. In essence it shows the property market there had no more substance than candy floss. Towards the end of the documentary you then see how violent the condominium buyers became after property prices began to collapse.

 

It’s 47 minutes long but it’s well worth the time to watch it

 

http://www.aljazeera.com/programmes/witness/2015/09/chinese-dreamland-150916144034085.html

That is 2 years old new and they are still building. If it ever crash, it sure will be the biggest bubble the world have ever seen.

[InMyShadow]

I think very much so whether it's retail condo buyers or developers looking to finance that next genius 6000 unit, 24sqm development. When the shtf all the money will go scampering back to their holes. 
 
As an aside, I was walking thru my local malls and saw a number off proposed developments on display, replete with pretties. I had an epiphany thinking, I bet they are not even going to try and build these things. They'll just take the money, run and let the poor slobs attempt to challenge them in court. Just sad the country allows this. If Thailand created laws that no units could be sold until completed and inspected and the govt guarantees the structure and the interior for 8 years, that would breathe life into the market. Trust.
 
Everywhere I look, condo's advertising buy, sell, rent so they've obviously given up on the sales side.
 
I'm just wondering how all these developments are continually financed.

They are financed with money. That's how off the plan works. My GF just bought a 33sqm condo for 5 million and there were dozens of thais there all signing contracts

The real estate conspiracy theorists here have finally stopped counting lights at night and washing on the balconies because those theories are clearly not going to burst the bubble so they now saying the whole real estate sector in Thailand is propped up by the money laundering.... LMAO talk about clutching at straws!

[trogers]

2 hours ago, midas said:

 

trogers your link provided an insight into UK and then the video clip showed what’s happening in USA. So what about the world’s second-largest economy? Coincidentally on Al Jazeera “ Witness “ this morning they showed one of the most fascinating documentaries I’ve seen for a while-you could even say it was a short anatomy of a boom and bust. Tell me why these same conditions don't apply in Thailand?

 

What was most noticeable to me was how little investors concentrated on the maths and to whether it was feasible to buy a particular condominium but instead based their decisions on unrelated and irrelevant factors. In essence it shows the property market there had no more substance than candy floss. Towards the end of the documentary you then see how violent the condominium buyers became after property prices began to collapse.

 

It’s 47 minutes long but it’s well worth the time to watch it

 

http://www.aljazeera.com/programmes/witness/2015/09/chinese-dreamland-150916144034085.html

The Chinese just experienced their first prolonged economic boom brought by the printing of money since 2008. They thought that there would be no end to rising asset prices. They were not taught about investment fundamentals. They only go with speculation and the herd instinct.

 

Hopefully, the next generation will get wiser.

[cheeryble]

No matter what happens to the 95%+ of new condos........the small new ones.....which seem to be perfectly affordable to me for a large number of Thais at 10k baht per month mortgage (CM prices) and presumably affordable in BKK where there's more money, the market for larger higher quality units will still be there, and rise, with globalisation and Thailand's growing popularity. Only so much land.

I notice a growing number of affluent people working on IT and the like with contracts from the west. They need quality accommodation.

[InMyShadow]

No matter what happens to the 95%+ of new condos........the small new ones.....which seem to be perfectly affordable to me for a large number of Thais at 10k baht per month mortgage (CM prices) and presumably affordable in BKK where there's more money, the market for larger higher quality units will still be there, and rise, with globalisation and Thailand's growing popularity. Only so much land.
I notice a growing number of affluent people working on IT and the like with contracts from the west. They need quality accommodation.

Good post. A lot of posters seem to think most thais are on 300 baht a day so the market is being some how propped up and that could not be further from the truth

All anyone has to do is attend opening day of a quality condo project and witness the signing frenzy.

[janclaes47]

2 minutes ago, InMyShadow said:

All anyone has to do is attend opening day of a quality condo project and witness the signing frenzy.

Then wait while the building is constructed and witness the resale frenzy. and when the building is completed witness the emptiness frenzy.

 

Or drive around in Jomtien and witness how many half finished constructions have halted works, or have a sales office that has been vacated with no construction started.

 

Or drive along Highway 7 towards Pattaya, and witness the hundreds of new constructions between the Nong Prue toll booth and the highway exit in Pattaya, that are empty for years already while they are still building more.

 

 

 

 

[InMyShadow]

Then wait while the building is constructed and witness the resale frenzy. and when the building is completed witness the emptiness frenzy.
 
Or drive around in Jomtien and witness how many half finished constructions have halted works, or have a sales office that has been vacated with no construction started.
 
Or drive along Highway 7 towards Pattaya, and witness the hundreds of new constructions between the Nong Prue toll booth and the highway exit in Pattaya, that are empty for years already while they are still building more.
 
 
 
 

Absolutely miniscule in the big picture. Literally a granul of sand in a desert.

Millions of condo's successfully built.
I bought 2 off the plan no worries 12 years ago when they were peanuts and now just around the corner at Nana bts the Q condo is rising fast at 1 million USA dollars entry level up to 4.6 million USA dollars.

Had I stayed a renter no way could I afford a new condo today.. Sadly the renting fence sitters waiting for the baht to implode and the bubble to burst are doomed to renting for life [emoji22]

[chrisandsu]

1 minute ago, InMyShadow said:

Absolutely miniscule in the big picture. Literally a granul of sand in a desert.

Millions of condo's successfully built.
I bought 2 off the plan no worries 12 years ago when they were peanuts and now just around the corner at Nana bts the Q condo is rising fast at 1 million USA dollars entry level up to 4.6 million USA dollars.

Had I stayed a renter no way could I afford a new condo today.. Sadly the renting fence sitters waiting for the baht to implode and the bubble to burst are doomed to renting for life

Are you the fella that was renting them

out on air bnb? 

[trogers]

1 hour ago, InMyShadow said:

Good post. A lot of posters seem to think most thais are on 300 baht a day so the market is being some how propped up and that could not be further from the truth

All anyone has to do is attend opening day of a quality condo project and witness the signing frenzy.

I thought I saw the same signing frenzy in that last video clip of Al Jazeera... and then they lived happily after...

[midas]

1 hour ago, trogers said:

I thought I saw the same signing frenzy in that last video clip of Al Jazeera... and then they lived happily after...