It's official - Thai real estate bubble pops.

[Allstars]

13 minutes ago, funandsuninbangkok said:

Why would they do that ?

Because in my book yield is the interest you earn minus the depreciation.

 

No problem to Google high dividend paying REIT's or stocks, but usually the published high yield is because the price has tanked in the short term, and may tank further.

[theguyfromanotherforum]

Yes, high yields are a red flag and they do get cut.

[blackcab]

47 minutes ago, Allstars said:

Do they also guarantee that at the end of the year, or whenver you want to sell them, that you get the at least same price as you paid?

 

To be fair you wouldn't get that guarantee with physical property, especially when taxes/fees/transaction costs are considered.

 

Clearly, some property appreciates nicely, but other property doesn't.

[funandsuninbangkok]

13 hours ago, Allstars said:

Because in my book yield is the interest you earn minus the depreciation.

 

No problem to Google high dividend paying REIT's or stocks, but usually the published high yield is because the price has tanked in the short term, and may tank further.

All REITs use depreciation when calculating yield. 

 

Prices for REITs go up and down,  just like real estate. 

 

https://www.forbes.com/sites/bradthomas/2015/12/28/top-10-reit-performers-for-2016/#77cdfc0df17b

 

Beauty of them is you can buy today and sell the in a second.   With a condo in Bangkok people get their money stuck , often at negative yield. Condos depreciate in Thailand. Only land goes up and non Thais can't own land. 

 

[trogers]

5 hours ago, funandsuninbangkok said:

All REITs use depreciation when calculating yield. 

 

Prices for REITs go up and down,  just like real estate. 

 

https://www.forbes.com/sites/bradthomas/2015/12/28/top-10-reit-performers-for-2016/#77cdfc0df17b

 

Beauty of them is you can buy today and sell the in a second.   With a condo in Bangkok people get their money stuck , often at negative yield. Condos depreciate in Thailand. Only land goes up and non Thais can't own land. 

 

The only problems are in two aspects:

 

It is just another form of investment in stocks.

 

Reits are primarily tied to commercial properties, because leases (and their rental income) of residential properties are too short term and uncertain.

 

Thus, smart investors who venture into residential properties are a class of their own.

[funandsuninbangkok]

4 hours ago, trogers said:

The only problems are in two aspects:

 

It is just another form of investment in stocks.

 

Reits are primarily tied to commercial properties, because leases (and their rental income) of residential properties are too short term and uncertain.

 

Thus, smart investors who venture into residential properties are a class of their own.

There are REITs for all forms of real estate now, from residential to prisons to Starbucks. 

[trogers]

35 minutes ago, funandsuninbangkok said:

There are REITs for all forms of real estate now, from residential to prisons to Starbucks. 

Not for the emerging markets in this region of East Asia and Asean.

 

There is only one Reit for residential properties, in Japan, but their track record is not encouraging.

[funandsuninbangkok]

3 hours ago, trogers said:

Not for the emerging markets in this region of East Asia and Asean.

 

There is only one Reit for residential properties, in Japan, but their track record is not encouraging.

List of Thai REITs

 

http://thaicapitalist.com/2016/01/thai-reits/

 

 

[funandsuninbangkok]

 

Place to start looking

 

https://mister-kwai.com/foreclosure-thailand-bangkok.html

 

mostly junk but more and more listed each day 

[bangkokorbust]

The biggest losers in the Thailand property market are the British. Always always screaming from a bar stool do NOT buy in Thailand. Buy back home and live off the rent.
I truly believe that it's karma whats happened to the sterling.

Any brit with half a brain would have bough in the country he has retired in and here is the thing.. Any brit that had bought 5 to 10years ago could have sold even at a loss and converted Baht back to STERLING and made a 40 %killing on exchange rate alone!

Hahaha I love it.. So instead a massive profit they have taken a 40% hit... In the other direction lol

[Cinderella Man]

12 hours ago, bangkokorbust said:

Any brit with half a brain would have bough in the country he has retired in and here is the thing.. Any brit that had bought 5 to 10years ago could have sold even at a loss and converted Baht back to STERLING and made a 40 %killing on exchange rate alone!

Hahaha I love it.. So instead a massive profit they have taken a 40% hit... In the other direction lol

I'm not a brit but I'm sure the overall profit of property in England would be far better than the one here. Even with the currency exchange rate.

[trogers]

37 minutes ago, Cinderella Man said:

I'm not a brit but I'm sure the overall profit of property in England would be far better than the one here. Even with the currency exchange rate.

It probably would be given that Brexit have tame property prices somewhat. Rental yields in the UK should have increased by 20-30%, while yields in Bangkok would have fallen by the same margin.

[whatawonderfulday]

I noticed 2 ads in TV today trying to offload their condos prior to completion. Maybe there is some basis for the headline

[funandsuninbangkok]

Hi hum. Here we go again. Load up on cash.  Wait for blood on the street

 

 

http://www.marketwatch.com/story/5-ways-the-fed-rate-hikes-will-hit-global-markets-2017-03-08

 

https://www.thebalance.com/what-was-the-asian-financial-crisis-1978997

 

http://www.eastasiaforum.org/2016/10/24/the-risks-from-chinas-property-bubble/

 

 

 

 

 

[funandsuninbangkok]

On 3/9/2017 at 3:21 PM, whatawonderfulday said:

I noticed 2 ads in TV today trying to offload their condos prior to completion. Maybe there is some basis for the headline

Ddproperty has 3600 properties listed with option to buy. 

 

Clearly all property flippers hoping bigger idiot comes along and buys them out before completion. 

 

1 bedroom 35 sm condos in Asoke for 8 million baht. Sure. It gona happen

 

toast

[trogers]

8 hours ago, funandsuninbangkok said:

Ddproperty has 3600 properties listed with option to buy. 

 

Clearly all property flippers hoping bigger idiot comes along and buys them out before completion. 

 

1 bedroom 35 sm condos in Asoke for 8 million baht. Sure. It gona happen

 

toast

It doesn't matter if the asking price of that 35 sqm unit is Bt8m or Bt18m.

 

The question is - what rental income can you likely achieve for such a space in such a location? Then, compare it with the capital expenditure to see if it is reasonable.

 

My  estimate - Bt28k x 12 months.

Just over 4% pa gross rental yield. Compare that to present mortgage rates of 6-7% pa.

 

Others may estimate at Bt30k. But I reduce it to Bt28k to secure long-term tenants to avoid vacant periods and broker fees.

[funandsuninbangkok]

4 hours ago, trogers said:

It doesn't matter if the asking price of that 35 sqm unit is Bt8m or Bt18m.

 

The question is - what rental income can you likely achieve for such a space in such a location? Then, compare it with the capital expenditure to see if it is reasonable.

 

My  estimate - Bt28k x 12 months.

Just over 4% pa gross rental yield. Compare that to present mortgage rates of 6-7% pa.

 

Others may estimate at Bt30k. But I reduce it to Bt28k to secure long-term tenants to avoid vacant periods and broker fees.

I multiply projected rent by 200. I reason comes out to about a 5% return net which is what I require to put up with rental <deleted>. 

[trogers]

1 hour ago, funandsuninbangkok said:

I multiply projected rent by 200. I reason comes out to about a 5% return net which is what I require to put up with rental <deleted>. 

You don't buy first, calculate a min. asking rent, and then put it out for rental at that rate. You may just sit and wait a long time...

 

You have to work backwards, from the quantum of the rents existing in the market for that kind of space and location.

 

Should the market rent proves too low to give you your target rental yield, bargain the price down or look for another property.

[funandsuninbangkok]

1 hour ago, trogers said:

You don't buy first, calculate a min. asking rent, and then put it out for rental at that rate. You may just sit and wait a long time...

 

You have to work backwards, from the quantum of the rents existing in the market for that kind of space and location.

 

Should the market rent proves too low to give you your target rental yield, bargain the price down or look for another property.

 Correct. I don't pay more than projected rent x 200. 

[funandsuninbangkok]

Well this can't make selling Thai property any easier. Now the Hong Konger buyers have been scared off. 

 

https://www.bloomberg.com/news/articles/2017-03-13/realtors-investigated-in-hong-kong-on-overseas-property-sales

 

The word is out, when in Thailand rent. 

[trogers]

8 minutes ago, funandsuninbangkok said:

Well this can't make selling Thai property any easier. Now the Hong Konger buyers have been scared off. 

 

https://www.bloomberg.com/news/articles/2017-03-13/realtors-investigated-in-hong-kong-on-overseas-property-sales

 

The word is out, when in Thailand rent. 

I still see some developments in Thailand advertising guaranteed rental yield for x years in their marketing schemes.

 

Reminds me of those promised double digit deposit interest rates just before the Tomyum Kung crisis.

[theguyfromanotherforum]

 
1 bedroom 35 sm condos in Asoke for 8 million baht. Sure. It gona happen
 
toast

Do you have a link? Is it Ashton?

[trogers]

2017 - The year of Real Estate Diversification.

 

Says it all that the cycle has peaked.

 

http://www.ddproperty.com/th/ข่าวอสังหาริมทรัพย์-บทความ/2017/3/148629/developers-create-strategies-to-achieve-recurring/?utm_source=pgth-newsalert&utm_medium=edm&utm_campaign=dailynews-17Mar2017&utm_content=links

[chrisandsu]

Vancouver has now slapped a 10% tax on foreign investors . Most the Hong Kong /Chinese have  now moved south to Seattle. House prices have gone nuts here ! I think the Chinese are just giving the Americans back their toilet role $$ straight off the printing press . The Chinese government is not stopping the supply of dollars entering the American market . Spend spend spend because they know the chances of getting real

money from the Americans is pretty much zero ! So may as well

own the place !

[funandsuninbangkok]

Funny this is first honest article in a property publication and its three years ago. Can't imagine how bad Pattaya is now!

 

http://www.ddproperty.com/en/property-news/2015/4/91760/pattaya-its-just-plain-ugly

 

 

[theguyfromanotherforum]

Vancouver has now slapped a 10% tax on foreign investors . Most the Hong Kong /Chinese have  now moved south to Seattle. House prices have gone nuts here ! I think the Chinese are just giving the Americans back their toilet role $$ straight off the printing press . The Chinese government is not stopping the supply of dollars entering the American market . Spend spend spend because they know the chances of getting real
money from the Americans is pretty much zero ! So may as well
own the place !

Actually they moved to Toronto and I became rich overnight.

[beleebala]

I am from HK. Maybe I can tell you why HK people buy condos in Bangkok. You all know that the property prices are rocket high in HK. The government imposes different means of controls in order to ease the price hike. These included a 15% stamp duty for non-first time buyers and limiting the mortgage amount. Investors in HK have not look elsewhere for investment. They bought in London, Vancouver, Syndey, Japan.... and in the last two years in BKK. They are running out of investment ideas. To many of them already have properties around the world, a THB5 mil property is just a peanut in their portfolio. HK people enjoy BKK a lot. Many buyers see the condos as holiday home. Whether they would have 7% return or not is not very important. In the last year, companies from mainland China kept buying lands in HK at record breaking prices. RMB keeps falling and companies are looking for investment in other currencies as quickly as possible before the PRC government implement policy to further restricting them from moving fund outside the country into other currencies. Anyway, this is what I have observed in HK.

 

I am moving to BKK soon. A few questions from me:

1. Normally, how much can you negotiate down a rent asking price in BKK? I am interested in 2 br condos close to Rama 9 MRT. The asking prices are around THB45000.

2. What is the typical return rate I could expect if I am buying a 3 year old 2 br condo along Sukhumvit for renting purpose?

3. I was told that 2nd hand property market in Bangkok is very quiet and it is very difficult to sell 2nd hand condos. Is that correct?

 

Thanks.

[chrisandsu]

19 minutes ago, theguyfromanotherforum said:

 

Actually they moved to Toronto and I became rich overnight.

 

The funniest part is Seattle and all

its ultra liberal hipsters are starting to whine and moan about 'foreign' investors gentrifying neighbourhoods and pricing them out of the city ?? I bought 3 houses in 08 when people thought I was nuts as realtors were telling anybody that would listen to sell sell sell !!! I recently sold one that had near on tripled in price and paid off the other two . I can't see the market going up much more but even if it did and then crashed again I still own 3 houses (including my own)on the west coast that will always be rent positive . Not bad for a 30 something council estate kid 

[trogers]

11 hours ago, beleebala said:

I am from HK. Maybe I can tell you why HK people buy condos in Bangkok. You all know that the property prices are rocket high in HK. The government imposes different means of controls in order to ease the price hike. These included a 15% stamp duty for non-first time buyers and limiting the mortgage amount. Investors in HK have not look elsewhere for investment. They bought in London, Vancouver, Syndey, Japan.... and in the last two years in BKK. They are running out of investment ideas. To many of them already have properties around the world, a THB5 mil property is just a peanut in their portfolio. HK people enjoy BKK a lot. Many buyers see the condos as holiday home. Whether they would have 7% return or not is not very important. In the last year, companies from mainland China kept buying lands in HK at record breaking prices. RMB keeps falling and companies are looking for investment in other currencies as quickly as possible before the PRC government implement policy to further restricting them from moving fund outside the country into other currencies. Anyway, this is what I have observed in HK.

 

I am moving to BKK soon. A few questions from me:

1. Normally, how much can you negotiate down a rent asking price in BKK? I am interested in 2 br condos close to Rama 9 MRT. The asking prices are around THB45000.

2. What is the typical return rate I could expect if I am buying a 3 year old 2 br condo along Sukhumvit for renting purpose?

3. I was told that 2nd hand property market in Bangkok is very quiet and it is very difficult to sell 2nd hand condos. Is that correct?

 

Thanks.

Answers:

 

1. Bt30,000

 

2. Gross rental yield of 4%

 

3. Location and price. Don't expect capital gains like the bubble in HK, when the developer still has unsold stocks in the project five years after completion of construction.

[Frank67]

After all you must keep in mind that property market is extremely local. Even Pattaya itself has different areas with different market positions.

#1 rule in property business is: "location".

Sure, if demand is high, people have to buy in less nice or less comfortable location and prices go up. If the demand is going down, these areas are the first to drop in price or even become unsellable. At the same time the price of objects in excellent location will just drop slightly and still have demand.

 

So in Bangkok it means that the further away you are from the next BTS station, the more the price flows with the overall demand in the city. If your condo is right at Siam Square you do not have to worry. People who buy here always have money.

In Pattaya if you have a condo in beach front of central Pattaya (there is very few), your price will be stable and demand will be there. This is similar for objects close to the central Songthaew routes (Beach Road, Second Road, Soi Buakhao) and any direct beach front project.

The projects in more remote areas and without fabulous sea views are highly depending on the "overflow" of buyers.

 

Spain was a good example for such developments.

 

Just my point of view. If I knew everything I was billionaire already...