It's official - Thai real estate bubble pops.

[chrisandsu]

8 hours ago, Destiny1990 said:

Robert Kiyosaki is a wise man!

As he said you don’t have to go to Harvard to know that .

[Destiny1990]

1 hour ago, chrisandsu said:

As he said you don’t have to go to Harvard to know that .

To know the difference between investing for capital gains and investing for cash flow yeah u don't.

[Jsinbkk]

 

Air coming out of the balloon 

 

http://www.businessinsider.com/housing-markets-worst-global-property-guide-2017-11/#9-greece-1

 

[trogers]

5 hours ago, Jsinbkk said:

 

Air coming out of the balloon 

 

http://www.businessinsider.com/housing-markets-worst-global-property-guide-2017-11/#9-greece-1

 

While the data is for low and medium cost housing in Thailand, a similar observation can be seen in the condo market when your hear sellers complain about taking years to sell at lower prices, and developers still having unsold stocks five years after construction completion.

 

Somewhere in that same website also reported that old 2-bedroom condos of 120 sqm are enjoying the highest rental yield of 8%, though the data are over two years old.

 

http://www.globalpropertyguide.com/Asia/Thailand/Rental-Yields

Edited November 28, 2017 by trogers

[bazza73]

It says something about the real estate market when even my golf caddie is saying everything is down.

[trogers]

13 minutes ago, bazza73 said:

It says something about the real estate market when even my golf caddie is saying everything is down.

I think they meant the amount of tips they are getting these days. Did you tip a fair amount?

[ExpatOilWorker]

9 hours ago, Jsinbkk said:

 

Air coming out of the balloon 

 

http://www.businessinsider.com/housing-markets-worst-global-property-guide-2017-11/#9-greece-1

 

A friend of mine works for a Japanese company that provide the steel cables for elevators. They are also seeing a slowdown is activity and more worryingly, developers use to order the cables 6 month to a year in advance for new construction as part of the building planning. Now they order with a month if not weeks notice and want it right away.

If the reason is to conserve cash-flow or eliminate right, just in case the building is not completed, I don't know.

[bazza73]

2 hours ago, trogers said:

I think they meant the amount of tips they are getting these days. Did you tip a fair amount?

Yes I did. She is a very intelligent woman, with a great sense of humor which cracks me up sometimes. Reminds me of Rita Rudner.

We were discussing how Thais would only buy new - houses, cars etc. I said falangs didn't mind secondhand. She said

" Yes, women too".

[smutcakes]

On 11/27/2017 at 10:31 PM, Jsinbkk said:

PACE Development's stock is collapsing. Who knew people didn't want to spend 750$ a sq foot for a Bangkok condo?

 

 

 

 

https://normanobserver.com/pace-development-corp-pcl-pace-decline-3-03-on-nov-26/

 

 

 

Nimit Langsuan has all but sold out, i believe at an average price of around 300,000 baht sqm.

Pace Developments problems are related to poor management and high debt with Dean De Luca rather than problems selling their residential projects.

 

I would say that very few Nimit Langsuan units have been purchased to lease out.

[Jsinbkk]

7 minutes ago, smutcakes said:

 

Nimit Langsuan has all but sold out, i believe at an average price of around 300,000 baht sqm.

Pace Developments problems are related to poor management and high debt with Dean De Luca rather than problems selling their residential projects.

 

I would say that very few Nimit Langsuan units have been purchased to lease out.

PACE is trying to sell Nimit Langsuan now. Buyers of that project face very big possibility of years of delays and litigation.   Enjoy. 

[trogers]

1 hour ago, Jsinbkk said:

PACE is trying to sell Nimit Langsuan now. Buyers of that project face very big possibility of years of delays and litigation.   Enjoy. 

Sell what to who?

 

The only assets are the land and development design submission. Those booking contracts are not transferable to a 3rd party, and deposits paid are probably all expended.

[Jsinbkk]

2 hours ago, trogers said:

Sell what to who?

 

The only assets are the land and development design submission. Those booking contracts are not transferable to a 3rd party, and deposits paid are probably all expended.

Sansiri has signed a MOU and is doing due diligence now.  Problem is price. Had to sell something when buyer knows your stuffed. 

 

Good chance PACE goes into bankruptcy holding Nimit Langsuan in its books. Then it's years of litigation before construction. 

[trogers]

33 minutes ago, Jsinbkk said:

Sansiri has signed a MOU and is doing due diligence now.  Problem is price. Had to sell something when buyer knows your stuffed. 

 

Good chance PACE goes into bankruptcy holding Nimit Langsuan in its books. Then it's years of litigation before construction. 

People who booked and paid deposit for that project should launch a class suit to stop the sales of that project.

[smutcakes]

33 minutes ago, trogers said:

People who booked and paid deposit for that project should launch a class suit to stop the sales of that project.

Surely the buyer is purchasing the cash flow for the remaining units. People have say paid up to 15% of the purchase price and the remaining monies would be paid to the new owner? Why would they start a class action? If they stop the sale how is that going to benefit them?

 

Sansiri would assess how much money there is to be paid on the sold units, how many unsold units there are, and how much it will cost them to complete the development. If there is only 15% down paid on units, there is still going to be very substantial monies to come in.

[trogers]

35 minutes ago, smutcakes said:

Surely the buyer is purchasing the cash flow for the remaining units. People have say paid up to 15% of the purchase price and the remaining monies would be paid to the new owner? Why would they start a class action? If they stop the sale how is that going to benefit them?

 

Sansiri would assess how much money there is to be paid on the sold units, how many unsold units there are, and how much it will cost them to complete the development. If there is only 15% down paid on units, there is still going to be very substantial monies to come in.

It was mentioned that the project is fully booked. What remaining units?

 

So, booking contracts would be transferable to a 3rd party?

[smutcakes]

1 hour ago, trogers said:

It was mentioned that the project is fully booked. What remaining units?

 

So, booking contracts would be transferable to a 3rd party?

Fully booked but at the current syage of construction you would presume people would only of paid a small amoint of the total price. Probably 15-20%.

 

I am not sure whats in their SPA's but i presume they could opt to transfer rights to ths new owner or the new owner would repay their monies paid and have the unit to sell again.

[trogers]

16 minutes ago, smutcakes said:

Fully booked but at the current syage of construction you would presume people would only of paid a small amoint of the total price. Probably 15-20%.

 

I am not sure whats in their SPA's but i presume they could opt to transfer rights to ths new owner or the new owner would repay their monies paid and have the unit to sell again.

I wouldn't settle for a refund. I would claim for a portion in the increase in land value as compensation.

[smutcakes]

23 minutes ago, trogers said:

I wouldn't settle for a refund. I would claim for a portion in the increase in land value as compensation.

Its not transferred to a juristic yet so you would have no claim over the land.

[trogers]

22 minutes ago, smutcakes said:

Its not transferred to a juristic yet so you would have no claim over the land.

A lost suffered from the default by a contracting party, who would gain an increase in the land value of the project in question.

Edited November 29, 2017 by trogers

[bazza73]

On 11/8/2017 at 9:35 AM, OneZero said:

KittenKong,

As usual your observations are spot on.  Fifteen nyears ago (probably as recently as 10 years ago) prior to the condo boom the appalling traffic was not noticable.  Folks were constantly bragging on the internet about how great Chiang Mai was (& it was) & the mass migration to Chiang Mai started.  

PS, Yes avoid Chiang Mai in March for the pollution, and probably in April as well for the heat without cloud cover, & especially so if you are not fond of the insane Chiang Mai Songkran madness. 

It's still quite liveable, just a matter of horses for courses, and picking travel times.

I'll use my scooter anywhere around the Old City, because a car is just not practical. The car comes into play when I am going down to Lampang or up to Chiang Rai.

8 am and 4 pm are the peak traffic times due to the schools. Even scooters get a bit clogged. I avoid the roads with schools on them.

As for Songkhran, I stock up on food and booze the day before, then hole up in the condo for the 2-3 days.

The pollution this year I thought actually improved noticeably from March 2016.

[smutcakes]

3 hours ago, trogers said:

A lost suffered from the default by a contracting party, who would gain an increase in the land value of the project in question.

Nearly all SPA's are extremely similar as they are Goverened by the terms set out by the Consumer Protection Board. I think you would be pissing against the wind trying that.

[chrisandsu]

12 minutes ago, smutcakes said:

Nearly all SPA's are extremely similar as they are Goverened by the terms set out by the Consumer Protection Board. I think you would be pissing against the wind trying that.

Especially being a foreigner 

[Jsinbkk]

3 hours ago, trogers said:

A lost suffered from the default by a contracting party, who would gain an increase in the land value of the project in question.

Yes, this is exactly why this project will be another failure. Hundreds of litigants screaming and scrapping for years on end to get more than the other guy. Only winner will be the lawyers who con away good cash after bad. 

 

And this from a supposed "high-end" responsible developer. 

 

Welcome to Thai real estate 

[smutcakes]

16 hours ago, trogers said:

A lost suffered from the default by a contracting party, who would gain an increase in the land value of the project in question.

I believe if Sansiri or another interested party come to an agreement with the owner, they would acquire the company holding the development (i.e not PACE itself) so there would be no change in contractual parties.

There would be issues with late delivery etc, the remedies of which would be laid out in the SPA of each owner.

[trogers]

26 minutes ago, smutcakes said:

I believe if Sansiri or another interested party come to an agreement with the owner, they would acquire the company holding the development (i.e not PACE itself) so there would be no change in contractual parties.

There would be issues with late delivery etc, the remedies of which would be laid out in the SPA of each owner.

They were too proud to have a holding company.

 

http://www.pattayamail.com/property/pace-unveils-nimit-langsuan-45408

[smutcakes]

2 minutes ago, trogers said:

They were too proud to have a holding company.

 

http://www.pattayamail.com/property/pace-unveils-nimit-langsuan-45408

I am not sure what i am supposed to be reading in the article. The property was developed by PACE, under the PACE brand, this is well known.

 

I believe under that companies open up separate entities to carry out the individual projects. i.e PACE NIMIT Langsuan, which is a company under the main PACE Holdings and can be bought or taken over without taking over the whole PACE holdings. I believe this is done pretty much worldwide, that the major companies open separate companies to carry out individual developments as to mitigate risk and ring fence the separate developments. You can hardly expect a newspaper lest alone the Pattaya mail to care what or if there is a separate holding company for each development.

 

It stands to reason there will be, and different companies for Mahanakorn, MahaSutr etc

[trogers]

30 minutes ago, smutcakes said:

I am not sure what i am supposed to be reading in the article. The property was developed by PACE, under the PACE brand, this is well known.

 

I believe under that companies open up separate entities to carry out the individual projects. i.e PACE NIMIT Langsuan, which is a company under the main PACE Holdings and can be bought or taken over without taking over the whole PACE holdings. I believe this is done pretty much worldwide, that the major companies open separate companies to carry out individual developments as to mitigate risk and ring fence the separate developments. You can hardly expect a newspaper lest alone the Pattaya mail to care what or if there is a separate holding company for each development.

 

It stands to reason there will be, and different companies for Mahanakorn, MahaSutr etc

I don't see the CEO of Pace Nimit Langsuan in that photo...

[smutcakes]

16 minutes ago, trogers said:

I don't see the CEO of Pace Nimit Langsuan in that photo...

You have completely lost me, i have no idea what you are talking about.

 

You said you would seek land value gain or something for breach of a defaulting party. (complete nonsense for a start-something i am sure you are aware of)

I said it is possible there will not be a defaulting party as perhaps someone will buy the entity that is developing the project so the contracting parties will remain unchanged.

You post an article showing PACE announce the project and then start talking in riddles about photos of CEO of Pace.

 

If you look at Sansiri as an example there are literally hundreds of limited companies within the group which develop the various developments. These limited companies which are carrying out the developments can be taken over with new shareholders, not changing the name of the company and hence not changing the contract names of the developer or the buyer in the SPA's. I am sure you will see Sansiri launch a huge amount of projects under the Sansiri brand but they never launch it under the limited company the development is being done with. This is standard all over. Sansiri is the name, the brand, what sells the units.

[trogers]

19 minutes ago, smutcakes said:

You have completely lost me, i have no idea what you are talking about.

 

You said you would seek land value gain or something for breach of a defaulting party. (complete nonsense for a start-something i am sure you are aware of)

I said it is possible there will not be a defaulting party as perhaps someone will buy the entity that is developing the project so the contracting parties will remain unchanged.

You post an article showing PACE announce the project and then start talking in riddles about photos of CEO of Pace.

 

If you look at Sansiri as an example there are literally hundreds of limited companies within the group which develop the various developments. These limited companies which are carrying out the developments can be taken over with new shareholders, not changing the name of the company and hence not changing the contract names of the developer or the buyer in the SPA's. I am sure you will see Sansiri launch a huge amount of projects under the Sansiri brand but they never launch it under the limited company the development is being done with. This is standard all over. Sansiri is the name, the brand, what sells the units.

"not changing the name of the company and hence not changing the contract names of the developer"

 

Pace and Sansiri are very different names...

 

Why are holding companies, who are the legal owners of the development, not the one launching their projects?

[smutcakes]

9 minutes ago, trogers said:

"not changing the name of the company and hence not changing the contract names of the developer"

 

Pace and Sansiri are very different names...

 

Why are holding companies, who are the legal owners of the development, not the one launching their projects?

Sansiri buys Pace's shares in the company which is carrying out Nimit Langusan. They then are the shareholders of the company which owns Nimit Langsuan. The project would no doubt be relaunched under Sansiri, but the actual company name that those 300 purchasers have an SPA with will be the original company name, whichever name Pace chose for the development.

 

"Why are holding companies, who are the legal owners of the development, not the one launching their projects?"

 

 PACE launches many projects under its name, same as Sansiri, Ananda, Pruksa, Singh Estates etc etc etc. You, I and every other Somchai with an interest knows these names and their developments. The fact under those names they have many subsidiary companies which they hold developments is completely normal the world over, i presume to mitigate risk of one of them going pear shaped and ensuring it could be sold off, bankrupted etc whilst sparing the mother company. The only people who would even know the names of the subsidiary companies would be those who sign SPA agreements to buy the units. For everyone else they are just Sansiri, Pace, Ananda etc developments.

 

 Boon Rawd Brewery (Singha) has a number of real estate developments in process, they are done under Singha Estates, a subsidiary and separate entity of Boon Rawd Brewery. TCC Group had something like 300 separate companies under TCC doing everything from hospitality, real estate, tin cans, liquor, KFC etc etc etc. All held under separate companies below TCC. Go to any major corporation in the World and you will see the same thing.