It's official - Thai real estate bubble pops.

[funandsuninbangkok]

New ad texted to me. Newish building, prime location, priced less than replacement. 

 

Crash and burn market baby!  Sellers are caving in. Need to get their money. 

 

http://www.acuterealty.com/property/condominium-for-sale-the-river-charoennakorn-C-600403-03

 

 

[chrisandsu]

I have already taken out my money from Thailand . It's going to hit the skids very soon ! Nothing is selling . 

[theguyfromanotherforum]

It doesn't matter if nothing is selling. Prices are still going up.

[Bikeman93]

The dark side has more realistic prices 800,000 new 2br condos.

[11223344]

I just stay in a condo in Chiang Mai - 15000 thb all inclusive for 60 sq m, 1 bed

 

Funny thing is they have "penthouses" for sale here too...

 

20-25 million for 2 bedroom (130-190 sq m)

15+ million for 1 bedroom 

 

In CHIANG MAI lol!!! You could buy massive villa in Ko Samui for this cash... I wonder what material the develop has in his head. Not brain for sure.

[trogers]

1 hour ago, 11223344 said:

I just stay in a condo in Chiang Mai - 15000 thb all inclusive for 60 sq m, 1 bed

 

Funny thing is they have "penthouses" for sale here too...

 

20-25 million for 2 bedroom (130-190 sq m)

15+ million for 1 bedroom 

 

In CHIANG MAI lol!!! You could buy massive villa in Ko Samui for this cash... I wonder what material the develop has in his head. Not brain for sure.

I don't know how they define penthouses here...an advertising scam? Whiter than white... brighter than bright?

[Bikeman93]

Just now, 11223344 said:

I just stay in a condo in Chiang Mai - 15000 thb all inclusive for 60 sq m, 1 bed

 

Funny thing is they have "penthouses" for sale here too...

 

20-25 million for 2 bedroom (130-190 sq m)

15+ million for 1 bedroom 

 

In CHIANG MAI lol!!! You could buy massive villa in Ko Samui for this cash... I wonder what material the develop has in his head. Not brain for sure.

 

[Bikeman93]

Is that 15000 a year?

[11223344]

1 minute ago, Bikeman93 said:

Is that 15000 a year?

Is this serious question? 15k thb a month...

[Bikeman93]

Surely you cant be serious?

There are good hotels for 300 baht a day there.

[lkn]

On 5/13/2017 at 0:23 PM, 11223344 said:

I just stay in a condo in Chiang Mai - 15000 thb all inclusive for 60 sq m, 1 bed

 

Funny thing is they have "penthouses" for sale here too...

 

20-25 million for 2 bedroom (130-190 sq m)

15+ million for 1 bedroom 

 

In CHIANG MAI lol!!! You could buy massive villa in Ko Samui for this cash... I wonder what material the develop has in his head. Not brain for sure.

 

Sounds like The Shine. The regular condos there were reasonably priced (by the developer) with nice decor and good layouts (except the lack of a real kitchen).

 

But the penthouses are very different. The layout is terrible, wasting a lot of space on hallways, having a window arrangement that leave a lot of the apartment dark, and walls, fixtures, furnitures, etc. that is a blend between victorian and lanna style, so lots of gold, silver, dark wood, and fixtures that are from your grandmother’s house.

 

I just don’t see who these condos were supposed to appeal to, regardless of the general real estate market.

[tomwct]

On 3/6/2017 at 6:47 AM, trogers said:

Such news would be seen in the 'end of days' like Armageddon...

Fake News?

[chrisandsu]

19 hours ago, lkn said:

 

Sounds like The Shine. The regular condos there were reasonably priced (by the developer) with nice decor and good layouts (except the lack of a real kitchen).

 

But the penthouses are very different. The layout is terrible, wasting a lot of space on hallways, having a window arrangement that leave a lot of the apartment dark, and walls, fixtures, furnitures, etc. that is a blend between victorian and lanna style, so lots of gold, silver, dark wood, and fixtures that are from your grandmother’s house.

 

I just don’t see who these condos were supposed to appeal to, regardless of the general real estate market.

Sounds like it would make a perfect Chinese gaff .

[funandsuninbangkok]

 

Headline in competitor paper says he think there is a bubble. It's in article, just way down in text. Nation can't mess with developers. 

 

http://www.nationmultimedia.com/news/business/30315512

[smutcakes]

29 minutes ago, funandsuninbangkok said:

 

Headline in competitor paper says he think there is a bubble. It's in article, just way down in text. Nation can't mess with developers. 

 

http://www.nationmultimedia.com/news/business/30315512

Well he did not say there was a bubble, he says under certain circumstances there is a risk of a bubble.

[funandsuninbangkok]

1 hour ago, smutcakes said:

Well he did not say there was a bubble, he says under certain circumstances there is a risk of a bubble.

Wrong

 

Read headline of BKK Post. 

 

Sees bubble. How is that not a bubble?

[smutcakes]

13 minutes ago, funandsuninbangkok said:

Wrong

 

Read headline of BKK Post. 

 

Sees bubble. How is that not a bubble?

Ah okay, i was looking in the Nation article.

[lkn]

8 hours ago, funandsuninbangkok said:

Headline in competitor paper says he think there is a bubble. It's in article, just way down in text. Nation can't mess with developers. 

 

http://www.nationmultimedia.com/news/business/30315512

What article are you talking about?

 

Looked at recent BKK Post articles, and I see “Thai property continues to entice Chinese buyers with relatively low prices and good returns” and “Household debt is expected to fall gradually as the economy is recovering” and in The Nation I see “Thailand ranked among top ‘up-and-coming economies’”.

 

Sure, first one is likely a fluff piece, second one seems to be mainly about debt for car loans, and last one is based on a survey that doesn’t seem to have that much to do with economy, just saying…

[lkn]

The definition I prefer for a bubble is when people buy things because they think they can sell it at a later time and make a profit, without actually doing any work (other than holding the asset) and without considering the intrinsic value of the asset (because they only focus on the potential profit, as they do not expect to hold the asset for long).

 

With that definition, I don’t really see a bubble in the Thai real estate market, as very very few are buying simply to sell it in 6-24 months and expect to turn a profit.

 

It does seem like there is an oversupply in some regions of Thailand (of some type of condos), but oversupply does not mean that there is a bubble. It could put pressure on the price, if a lot of the investors suddenly need the cash, but it seems like the investors are very patient, so prices seems to go neither up or down, except maybe for high-end builds.

[funandsuninbangkok]

2 minutes ago, lkn said:

The definition I prefer for a bubble is when people buy things because they think they can sell it at a later time and make a profit, without actually doing any work (other than holding the asset) and without considering the intrinsic value of the asset (because they only focus on the potential profit, as they do not expect to hold the asset for long).

 

With that definition, I don’t really see a bubble in the Thai real estate market, as very very few are buying simply to sell it in 6-24 months and expect to turn a profit.

 

It does seem like there is an oversupply in some regions of Thailand (of some type of condos), but oversupply does not mean that there is a bubble. It could put pressure on the price, if a lot of the investors suddenly need the cash, but it seems like the investors are very patient, so prices seems to go neither up or down, except maybe for high-end builds.

77,000 units for sale in Bangkok on DD property.  Most are one BR recently purchased.  Flippers who got flopped and now their 2% mortgage is raising to 8%.  Yeiks!

 

 

[ExpatOilWorker]

16 minutes ago, lkn said:

What article are you talking about?

 

Looked at recent BKK Post articles, and I see “Thai property continues to entice Chinese buyers with relatively low prices and good returns” and “Household debt is expected to fall gradually as the economy is recovering” and in The Nation I see “Thailand ranked among top ‘up-and-coming economies’”.

 

Sure, first one is likely a fluff piece, second one seems to be mainly about debt for car loans, and last one is based on a survey that doesn’t seem to have that much to do with economy, just saying…

 

Just Google: Supachai sees property bubble ahead 

 

[funandsuninbangkok]

Breaking News:

 

Property baron Anant Asavabhokin President of Land and Houses facing money laundering charge over a highly profitable land deal involving a subsidiary of the embezzled Klongchan Credit Union.

 

Top Property firm involved in money laundering!   Imagine the banks scrambling today to call in their loans!  Could domino through Bangkok developers at the worst possible time.

 

Oh ya, and if you got your money in their little L and H Bank you better get your heiny over to Sathorn tomorrow morning and get it out.  Expect a line. 

 

Can you hear it?? CCCRRAAAAASSSSHHHH!!!!!!!!!!! or Pop?

 

 

[funandsuninbangkok]

27 minutes ago, lkn said:

What article are you talking about?

 

Looked at recent BKK Post articles, and I see “Thai property continues to entice Chinese buyers with relatively low prices and good returns” and “Household debt is expected to fall gradually as the economy is recovering” and in The Nation I see “Thailand ranked among top ‘up-and-coming economies’”.

 

Sure, first one is likely a fluff piece, second one seems to be mainly about debt for car loans, and last one is based on a survey that doesn’t seem to have that much to do with economy, just saying…

Article has just  been moved from front page to Learning section - BKK Post does this when they get complaints from "influential people".  Nice video of the Tulip Bubble accompanying it now.  How do you say bubble in Dutch?

[lkn]

1 hour ago, funandsuninbangkok said:

77,000 units for sale in Bangkok on DD property.  Most are one BR recently purchased […]

I think you missed my point. For this to be a bubble, prices should have gone up and up over the last few years, and actual price should be decoupled from the underlying value.

 

But the things I have been looking at, prices have been pretty stable, and prices do correspond to land, materials, labour, and reasonable profit for the investor.

 

Where are the graphs showing that prices have just gone up and up, decoupled from rise in salaries, GDP, etc.? where are the numbers showing disconnect between cost to build and actual market price? etc.

 

What I see is signs of oversupply, but oversupply is not the same as a bubble or an imminent market crash.

 

[funandsuninbangkok]

35 minutes ago, lkn said:

I think you missed my point. For this to be a bubble, prices should have gone up and up over the last few years, and actual price should be decoupled from the underlying value.

 

But the things I have been looking at, prices have been pretty stable, and prices do correspond to land, materials, labour, and reasonable profit for the investor.

 

Where are the graphs showing that prices have just gone up and up, decoupled from rise in salaries, GDP, etc.? where are the numbers showing disconnect between cost to build and actual market price? etc.

 

What I see is signs of oversupply, but oversupply is not the same as a bubble or an imminent market crash.

 

Rents up 0% in 10 years

 

prices up three times. 

 

New completion condos in2016/17 will double total amount. 

 

Source CBRE 2016 Research report on Bsngkok

 

Mother of all decoupling 

[trogers]

11 minutes ago, funandsuninbangkok said:

Rents up 0% in 10 years

 

prices up three times. 

 

New completion condos in2016/17 will double total amount. 

 

Source CBRE 2016 Research report on Bsngkok

 

Mother of all decoupling 

What you mean is the decoupling of prices with their underlying values, which is rental yield.

 

The late 80s saw rental yield going below 1% in Japan before that bubble burst and the subsequent lost decades.

[lkn]

2 hours ago, funandsuninbangkok said:

Source CBRE 2016 Research report on Bsngkok 

Unfortunately this report is not public. Did you buy this report, and if so, can you elaborate on what is meant by prices having tripled in 10 years and rent having stayed the same?

 

What I mean is what type of things are compared here. As you know, there is unfortunately not a lot of public data about the Thai real estate market, but Hipflat has some, and looking at various buildings in Bangkok, for these buildings, I definitely do not see a tripling of sq.m. price over the last 10 years, in fact, the appreciation seems to have been pretty low for what I was looking at.

 

But I don’t doubt that today you can find many new builds that are triple of what new builds were in 2006, but you can’t just compare these, as they are very different, and you definitely can’t rent these new 180,000 baht/sq.m. builds for 2006 rental prices.

 

Oh, and while I was looking for CBRE’s report, I found this tidbit on their site: “CBRE Research believes that the price of prime Central Business District (CBD) land in Bangkok will continue to increase as downtown condominium demand continues to remain strong with prices projected to increase further over 2017. CBRE Research is confident that the land price record will be broken again in each CBD location.”

[trogers]

38 minutes ago, lkn said:

Unfortunately this report is not public. Did you buy this report, and if so, can you elaborate on what is meant by prices having tripled in 10 years and rent having stayed the same?

 

What I mean is what type of things are compared here. As you know, there is unfortunately not a lot of public data about the Thai real estate market, but Hipflat has some, and looking at various buildings in Bangkok, for these buildings, I definitely do not see a tripling of sq.m. price over the last 10 years, in fact, the appreciation seems to have been pretty low for what I was looking at.

 

But I don’t doubt that today you can find many new builds that are triple of what new builds were in 2006, but you can’t just compare these, as they are very different, and you definitely can’t rent these new 180,000 baht/sq.m. builds for 2006 rental prices.

 

Oh, and while I was looking for CBRE’s report, I found this tidbit on their site: “CBRE Research believes that the price of prime Central Business District (CBD) land in Bangkok will continue to increase as downtown condominium demand continues to remain strong with prices projected to increase further over 2017. CBRE Research is confident that the land price record will be broken again in each CBD location.”

The word 'Demand' can be misleading. Demand of space for economic use, or for speculation?

 

Here's a descriptive graph of people's perceptions as market prices climbed up and then fell.

 

[lkn]

31 minutes ago, trogers said:

The word 'Demand' can be misleading. Demand of space for economic use, or for speculation?

Yes, knowing that would be a good clue as to whether or not we have the basis for a bubble. Though I only quoted the tidbit from CBRE because funandsuninbangkok claimed them as a source for his data showing we are in a bubble.

 

I personally am less optimistic than the tidbit I quoted, though my basic point in this thread has simply been that I have not seen the data to suggests that we are in a bubble. I have lived through two bubbles, and both times, it was clear from the data, before the bubble burst, that the prices were inflated to an unsustainable level.

 

Unfortunately in Thailand, there is little data available, but the few things I can scrape together does not look alarming, e.g. in 2006 I could buy a condo in Bangkok for 60,000 baht/sq. m. and today I can still find a condo in Bangkok for that same price.

 

And a 40 sq. m. condo at this price with a mortgage rate of 6% would mean the monthly payments are 12,000 baht, which does not seem unrealistic for a working Thai, nor does it seem like an inflated price when you consider the cost of the land, materials, and labour involved to build the condo.

 

I’d be interesting to learn, from those who think we are in a bubble, what the prices should be.

[trogers]

5 hours ago, lkn said:

Yes, knowing that would be a good clue as to whether or not we have the basis for a bubble. Though I only quoted the tidbit from CBRE because funandsuninbangkok claimed them as a source for his data showing we are in a bubble.

 

I personally am less optimistic than the tidbit I quoted, though my basic point in this thread has simply been that I have not seen the data to suggests that we are in a bubble. I have lived through two bubbles, and both times, it was clear from the data, before the bubble burst, that the prices were inflated to an unsustainable level.

 

Unfortunately in Thailand, there is little data available, but the few things I can scrape together does not look alarming, e.g. in 2006 I could buy a condo in Bangkok for 60,000 baht/sq. m. and today I can still find a condo in Bangkok for that same price.

 

And a 40 sq. m. condo at this price with a mortgage rate of 6% would mean the monthly payments are 12,000 baht, which does not seem unrealistic for a working Thai, nor does it seem like an inflated price when you consider the cost of the land, materials, and labour involved to build the condo.

 

I’d be interesting to learn, from those who think we are in a bubble, what the prices should be.

Only badly located condos have prices remain static after ten years. My old condo units have increased in value by 50% and 80% as indicated by sales of units in the same building. They were bought in 2007-8.