It's official - Thai real estate bubble pops.

[trogers]

1 hour ago, Senechal said:

 

Yeah I know ... that was a dry spell.  But then the 4th quarter of last year was the highest number of new launches in several quarters.

 

Also last year Q House Sukhumvit launched...  'one of the most  absurdly overpriced ones. (Units start at 30m baht).  It's still under construction now. 

 

Siam Sindhorn also launched two biggies in Langsuan this year. Not only are those places insanely expensive -- they're leasehold to boot. Good luck with that guys. I don't understand people buying small-ish condos for 30m baht... but I really don't understand anyone who spends that on a leasehold unit. Crazy.

 

4Q'16 and 1Q'17also saw tons of low-rise projects kick off... as that's where the perceived money was -- and EIA approvals and financing turned out to be much easier for the smaller projects.

 

 

 

 

These are so-called 'super luxurious' projects targeting foreigners and super rich Thais not dependent on bank mortgage. But they too are in oversupply due to limited demand.

 

The dry spell affected those projects launched in 2013-4 along the new mass transit lines in the outskirts and neighbouring provinces with construction completion in 2015-6.

 

I had forecast that demand in such peripheral areas would be in townhouses as buyers of shoebox condo units before 2010 would sell out as they need larger space to house their wife and kid(s).

 

Thus, those condo projects launched in 2013-4, and completing in Phase 4 adds to the increasing vacancy.

[Senechal]

34 minutes ago, trogers said:

These are so-called 'super luxurious' projects targeting foreigners and super rich Thais not dependent on bank mortgage. But they too are in oversupply due to limited demand.

 

The dry spell affected those projects launched in 2013-4 along the new mass transit lines in the outskirts and neighbouring provinces with construction completion in 2015-6.

 

I had forecast that demand in such peripheral areas would be in townhouses as buyers of shoebox condo units before 2010 would sell out as they need larger space to house their wife and kid(s).

 

Thus, those condo projects launched in 2013-4, and completing in Phase 4 adds to the increasing vacancy.

 

Agreed. I've never understood the 24-30sqm people-boxes. The re-sale on those has got to be awful.

 

When they were new, at least they could make the "but it's shiny and new" argument. And the financing was often via builders.

 

Now, here we are a few years later and they're trying to sell old people-boxes in buildings that are often poorly maintained. And the easy financing is gone.

 

 

[funandsuninbangkok]

Thai Conominium Association last week Bangkok Post

 

"Fly by Night Buyers of Luxury Property " warning. Seems property flippers of high end property are not accepting transfer. Can't  find greater fool. 

 

Oh my. 

 

Funny that they thought they were going to make money. Last round of luxury places only went bust in2009 with millennium, sukothai. 

 

Only wose sense then. 

 

Banks bad loans are up to 6% and over 10 if you count rollovers. 

 

Cowabunga!

[trogers]

56 minutes ago, funandsuninbangkok said:

Thai Conominium Association last week Bangkok Post

 

"Fly by Night Buyers of Luxury Property " warning. Seems property flippers of high end property are not accepting transfer. Can't  find greater fool. 

 

Oh my. 

 

Funny that they thought they were going to make money. Last round of luxury places only went bust in2009 with millennium, sukothai. 

 

Only wose sense then. 

 

Banks bad loans are up to 6% and over 10 if you count rollovers. 

 

Cowabunga!

Raimon Land had already raised warning on fly by night property flipping a few years back and recommend raising the quantum of down payments.

 

Apparently, developers prefer a pretty pre-sale (booking) figure.

[Rancid]

On 31/05/2017 at 4:04 PM, theguyfromanotherforum said:

 

Yes, it's a great place and you'll be getting a monorail soon, but I always chuckle when chaopraya living is considered hiso waterfront location. It's a giant garbage dump.

Waterfront is about the view, not necessarily going for a swim. Have stayed in hotels on the Chaopraya and it is interesting for the view in activity. That aside waterfront is always limited so will always attract a premium. Beachfront is usually better as also should benefit from an ocean breeze making things cooler.

[trogers]

34 minutes ago, Rancid said:

Waterfront is about the view, not necessarily going for a swim. Have stayed in hotels on the Chaopraya and it is interesting for the view in activity. That aside waterfront is always limited so will always attract a premium. Beachfront is usually better as also should benefit from an ocean breeze making things cooler.

No shortage of beaches in this country. There is a 20-year old ghost housing and condo project with its private riverfront. You would pass it by when crossing the Bang Prakong river along Bangna-trad.

 

What is in shortage are mountaintops with frost during year end.

[Senechal]

Let's not forget this gem from a couple months back:

 

http://property.bangkokpost.com/news/1238871/condo-investors-eye-capital-gains-rather-than-yields

 

Business fundamentals are poor, but hope for a greater fool springs eternal. When rental yields stop justifying prices, it's only a matter of time before the correction comes.

[KittenKong]

9 hours ago, trogers said:

No shortage of beaches in this country.

 

True, but most are miles from anywhere and in places where few people want to live.

 

I certainly bought my condo for its view of the sea (and mountains) rather than because I want to be close to the sea for swimming. If I ever bought in Bangkok it would probably be on the river or overlooking some park with a lake.

[funandsuninbangkok]

2 hours ago, Senechal said:

Let's not forget this gem from a couple months back:

 

http://property.bangkokpost.com/news/1238871/condo-investors-eye-capital-gains-rather-than-yields

 

Business fundamentals are poor, but hope for a greater fool springs eternal. When rental yields stop justifying prices, it's only a matter of time before the correction comes.

Funny!

 

even if you did make a capital gain(unlikely ) you owe taxes at ordinary rates 36% and can't send the money outside of Thailand. 

[trogers]

While many Thai developers are gearing up to launch projects in the 2nd half of this year, Richy Place 2002 Plc will not be joining them. Instead, the company will focus on selling the remaining units in 12 existing residential projects, reports local media.

 

Richy Place has a total of 12 existing projects with 2,400 units. Of this total, 5 are already completed and these contain nearly 850 unsold units.

 

The Rich @Nana launched last year and was the company’s 1st CBD development. Located on Sukhumvit Soi 3, the project has 427 units and is currently 30 per cent sold.

 

Thai Developer to forego launching new developments

 

Five completed projects with over 50% remain unsold, and one project in the CBD launched a year ago with only 30% bookings.

 

Speak volumes on the stellar demand in the market...

[Senechal]

7 hours ago, trogers said:

 

 

Richy Place has a total of 12 existing projects with 2,400 units. Of this total, 5 are already completed and these contain nearly 850 unsold units.

...

Five completed projects with over 50% remain unsold, and one project in the CBD launched a year ago with only 30% bookings.

 

 

Good stats there. But by my math it might be much worse than "50% unsold".

 

Assuming the projects have around 200 units per project average (2400 / 12 = 200).  ... although maybe that's a poor assumption...

 

...They have 5 already completed -- or 1000 units available, so far.

 

... and they have 850 unsold.

 

It looks like they might have 85% unsold.   And that's before the remaining 7 buildings get completed!   

 

... In which case, I'd be "focusing on selling remaining units" too. 

 

Either way, we're on the same page: Demand is non-existent.

 

[inThailand]

Ye, lets listen to the fox in the hen house... property agents and developers saying the market is booming...the chinese are buying. Show me one property a chinaman have bought in Phuket. Nada!

 

And I am an optimistic who likes property investing.

 

[KittenKong]

6 hours ago, inThailand said:

Show me one property a chinaman have bought in Phuket. Nada!

 

To me they sound smart. I would not buy in Phuket either.

[trogers]

7 hours ago, Senechal said:

 

Good stats there. But by my math it might be much worse than "50% unsold".

 

Assuming the projects have around 200 units per project average (2400 / 12 = 200).  ... although maybe that's a poor assumption...

 

...They have 5 already completed -- or 1000 units available, so far.

 

... and they have 850 unsold.

 

It looks like they might have 85% unsold.   And that's before the remaining 7 buildings get completed!   

 

... In which case, I'd be "focusing on selling remaining units" too. 

 

Either way, we're on the same page: Demand is non-existent.

 

See my post at 177

[Senechal]

13 minutes ago, trogers said:

See my post at 177

Agreed. The cycle will always be the cycle. And there will forever be shills claiming that it's different this time.

 

We're in that famous Wile E. Coyote moment where we've already gone off the cliff, but haven't started to fall yet.

 

Stay agile.

[trogers]

2 hours ago, Senechal said:

Agreed. The cycle will always be the cycle. And there will forever be shills claiming that it's different this time.

 

We're in that famous Wile E. Coyote moment where we've already gone off the cliff, but haven't started to fall yet.

 

Stay agile.

 

What the chart did not highlight is the high risk of abandonment of newly launched projects by their developers when the cycle is at Phase IV.

 

Would be much safer to buy completed units at this time. That's the strategy of Richy Place.

[funandsuninbangkok]

On 7/25/2017 at 6:24 PM, trogers said:

While many Thai developers are gearing up to launch projects in the 2nd half of this year, Richy Place 2002 Plc will not be joining them. Instead, the company will focus on selling the remaining units in 12 existing residential projects, reports local media.

 

Richy Place has a total of 12 existing projects with 2,400 units. Of this total, 5 are already completed and these contain nearly 850 unsold units.

 

The Rich @Nana launched last year and was the company’s 1st CBD development. Located on Sukhumvit Soi 3, the project has 427 units and is currently 30 per cent sold.

 

Thai Developer to forego launching new developments

 

Five completed projects with over 50% remain unsold, and one project in the CBD launched a year ago with only 30% bookings.

 

Speak volumes on the stellar demand in the market...

Check out their financials. Dropping like a rock.  Sayonara baby

 

https://www.set.or.th/set/companyhighlight.do?symbol=RICHY&ssoPageId=5&language=en&country=US

 

https://www.set.or.th/set/companyfinance.do?type=cashflow&symbol=RICHY&language=en&country=US

 

 

[trogers]

1 hour ago, funandsuninbangkok said:

Check out their financials. Dropping like a rock.  Sayonara baby

 

https://www.set.or.th/set/companyhighlight.do?symbol=RICHY&ssoPageId=5&language=en&country=US

 

https://www.set.or.th/set/companyfinance.do?type=cashflow&symbol=RICHY&language=en&country=US

 

 

Not surprised. Year 2016, inventory = 4,865m while sales = 553m

 

How many more developers out there rely on easy booking terms to gain pretty pre-sale figures from flippers? Accumulating inventory and facing poor title transfer rates on completion of construction...

[bazza73]

I don't know anything about the Bangkok market. In Chiang Mai, there are quality homes and good condos going begging. Landlords are dropping rents to entice tenants to stay.

I feel the property bubble here burst about 2 years ago.

[trogers]

14 hours ago, bazza73 said:

I don't know anything about the Bangkok market. In Chiang Mai, there are quality homes and good condos going begging. Landlords are dropping rents to entice tenants to stay.

I feel the property bubble here burst about 2 years ago.

The significant sign a bubble pops is falling selling price, not falling asking rents.

 

Seen a few cases from sales under duress with deep discounts, most sales advertisements just hang about for years.

[bazza73]

6 hours ago, trogers said:

The significant sign a bubble pops is falling selling price, not falling asking rents.

 

Seen a few cases from sales under duress with deep discounts, most sales advertisements just hang about for years.

Selling prices are falling in CM too. I have a friend with a house, high quality build. Started at 6.5M, down to 5.3 M. Still no takers.

[trogers]

9 minutes ago, bazza73 said:

Selling prices are falling in CM too. I have a friend with a house, high quality build. Started at 6.5M, down to 5.3 M. Still no takers.

Difficult for a house...

 

A foreigner with the money would prefer to buy land and design and build his own house.

 

So, it would have to be priced to entice a Thai buyer interested in that neighborhood.

[bazza73]

Just now, trogers said:

Difficult for a house...

 

A foreigner with the money would prefer to buy land and design and build his own house.

 

So, it would have to be priced to entice a Thai buyer interested in that neighborhood.

You may be right. However, if I was interested in owning property in Thailand ( I'm not ) I'd buy it in a heartbeat. That's because I've seen the standard to which it was built.

[anto]

Yes its quiet in Chiang mai .I am trying to sell my house in a gated community in a suburb off the outer ring road ,10 km out of the old City .Looking for B2.45 M .(priced below others in the village ) .Few viewing so far .Thai people finding it hard to get Bank loan approval .My best hope is to get a Farang buyer ,but there seem to be less of them about . 

[ExpatOilWorker]

There is a fairly informative "Property Focus" inlay in The Post today (July 31st).

 

"Mortgage rejections are no lobger a big deal, they are the new normal" is one of thie quotes.

 

"The mass market property projects turned sour over the past 2 years thanks to an over supply......"is another.

[JohnLick]

Quote

The property business now is totally different from the 1997 crisis because the country learned some painful lessons. Operators now develop projects based on information and risk management.

They have it under control, no need to worry ;-)

[Senechal]

16 hours ago, ExpatOilWorker said:

There is a fairly informative "Property Focus" inlay in The Post today (July 31st).

 

"Mortgage rejections are no lobger a big deal, they are the new normal" is one of thie quotes.

 

"The mass market property projects turned sour over the past 2 years thanks to an over supply......"is another.

 

Got a link?

 

 

[janclaes47]

16 hours ago, ExpatOilWorker said:

"Mortgage rejections are no lobger a big deal, they are the new normal" is one of thie quotes.

 

I had a Thai doctor working at one of the major hospitals wanting to buy my house last month.

 

She couldn't get a mortgage from any bank.

[Senechal]

Just now, janclaes47 said:

 

I had a Thai doctor working at one of the major hospitals wanting to buy my house last month.

 

She couldn't get a mortgage from any bank.

How long before some genius at the BoT decides that the "problem" is that credit standards are "too high"?

 

 

[chrisandsu]

10 minutes ago, Senechal said:

How long before some genius at the BoT decides that the "problem" is that credit standards are "too high"?

 

 

Hahahah it's not that the credit standards are too high , it's that  most Thais are swimming in debt or have no proof of income (can't show under the table money) would you lend a thai money thinking you would get it back ?