Fears that the condo bubble is about to burst in Bangkok - especially if foreigners pull out

[Rimmer]

Off topic post about the USA also reply removed

[Assurancetourix]

27 minutes ago, userabcd said:

Don't know who is buying into all these condos or where the money is coming from but one day something will give.

The money is coming from big washing machines...

Building is one of the best ways to launder dirty money.

 

[ThomasThBKK]

 

59 minutes ago, marcusarelus said:

The Chinese are doing and have been doing it for a couple of years to get their money out of China.  The Farang don't matter much in this market anymore.

Most expensive Condos are non-chinese owned, same as in NYC and co.

Chinese mostly buy lower class condos, they can't get enough money out of china for penthouses and co.

They can't get loans either, they have to buy with savings/cash.

Most of these penthouses and expensive condos in BKK are Western, Japanse, Korean and Thai owned.

 

There's a huge flood tho of chickenboxes that they won't be able to sell, that doesn't mean the higher end condo market is unhealthy - tho.

After all higher end condos are the better value for money with better prices per sqm.

 

Chinese buy there stuff unseen online on webportals, without even getting a proper chanote in many cases, circumventing most real estate laws here like having a proper FET form.

It's only a matter of time till the chinese government cracks down on this practice. Or some Thai Hiso wants to own their condos in stead.

They are the definition of dumb money, and dumb money always ends up in a marketcrash.

 

 

https://www.thaiexaminer.com/thai-news-foreigners/2019/03/09/young-chinese-millennials-driving-bangkoks-condo-sales-with-online-buying-as-they-flee-chinese-market/

 

Quote

However, it has now emerged that the market for condominiums in Bangkok is being driven by foreign buyers with increasing numbers of young Chinese millennials buying Bangkok condos on websites sometimes even unseen. They accounted for 50% of sales in 2018 or 15,000 units and this is growing as the Chinese professionals seek to evade currency controls at home and hedge their bets against a property market in China which looks increasingly dangerous. 

 

 

Everyone who thinks this is healthy and will go on forever is nuts.

 

In fact it's even illegal for them to do this: https://www.ft.com/content/5dca923a-1895-11e8-9c33-02f893d608c2

 

and It's already plummeting since years: https://www.scmp.com/business/companies/article/2187482/chinese-overseas-property-buying-plummets-63-cent-2018-hitting

 

Quote

The survey found 84 per cent of Chinese investors indicated that they had either frozen or reduced their overseas real estate allocations over the past year in comparison to 2017 after Beijing introduced a number of policies to restrict overseas investment to stop capital outflow.

 

 

Greed skrews your brain, every thai real estate developer who laid all their eggs in the china basket will have a nightmare sooner or later.

 

 

[tabarin]

I thought Japan and Netherlands were Thailand's biggest investors, yet it is always about the Chinese.
Also, tons of real estate in hands of Thai people that directly or indirectly depends on farangs financial support, in order to keep up with the mortgage payments.

Have seen many Thais leave their house, stripping it entirely / bank taking over in various villages this year.
It is also pretty obvious that business owners are dying and coming high season will be the relief of killer

(at the end they are renting those expensive properties too).

Yet, Thais have no idea to appreciate real estate when selling or buying it. I still see new Thai people buying, at insane prices, feel sorry for them. 
It is like they buy a 1M baht house that is actually only worth 600K, just 2 years old and problems already,
then the big interest on top + coming crash to kill them entirely.

[mok199]

Correction / crash....Zero interested buyers and over priced over built market

[mike787]

If Thailand can improve their immigration and investment rules/laws towards foreigners would help.  As a foreigner, it would be financial suicide to buy property or condo's and brain wash myself into believing this is an investment.  Sure, anything is an investment to anyone.  

Let's define investment:  What is the "Return on Investment" (ROI) you expect to see?  If you cannot break inflation as determined by your country, or Thailand then you are losing money.  Then add to that fact, the time, effort, stress, and operational cost.  Now what is you ROI?  Some don't care, they just want it.  But if you are wise and informed, maybe the real estate investment is not so sexy...useless as lip stick on a pig.

[moe666]

1 hour ago, Mikisteel said:

Who was about in 97?

 

What kind of bargains we talking about? If that property crash happened in bok does it spread nationwide?

It was more than Thailand most of Southeast Asia was affected. The exchange rate for the Thai Bhat was as high as 50 bhat to dollar. When I came in 1998 it was down to 43bhat to dollar. The Thais allowed there bhat to float which caused part of the problem.

[thequietman]

Hit them in their pockets!

 

It's the only time when I see a Thai Actually paying attention. Seriously.

 

Maybe immigration will start paying attention when the hi-so's start complaining about empty properties and rentals going down because the smart foreigners are moving out of the cities. ???? 

[Assurancetourix]

2 hours ago, webfact said:

Fears that the condo bubble is about to burst in Bangkok - especially if foreigners pull out

The Chinese government has dollars to no longer know what to do ..
For the moment, they are canibalising Laos and Cambodia plus a good part of Africa.
They are no longer waiting for the high-speed rail line to be completed on the Thai side to also put the grapple on this country which will become like Laos and Cambodia a new Chinese province.

[legend49]

especially if foreigners pull out

 

 

Some good news today!

 

[marcusarelus]

45 minutes ago, thirdleg said:

jesus wept, China are manipulating down to make their exports cheaper, Thailand are making them more expensive

Thailand is manipulating them up to lose money.  You right Jesus wept as well as Somchai.  Lemme put it to you this way.  Somchai is in London now and if he succeeds in getting another Brexit referendum and Brexit loses then the baht will fall re the pound.  Somchai's brother is also a friend of Trump and is asking him to raise interest rates.  If he succeeds the baht will fall re the USD.    

[marcusarelus]

51 minutes ago, thirdleg said:

Yeh because there are no controls from the Chinese government are there!!?? They are scared to death of capital flight and just keep hammering the restrictions on their citizens

China has 3 trillion and they are worried, not a poxy 2 billion

There are controls against Chinese capital flight.  Or.  Maybe you were making a joke.  

[marcusarelus]

31 minutes ago, ThomasThBKK said:

 

Most expensive Condos are non-chinese owned, same as in NYC and co.

Chinese mostly buy lower class condos, they can't get enough money out of china for penthouses and co.

They can't get loans either, they have to buy with savings/cash.

Most of these penthouses and expensive condos in BKK are Western, Japanse, Korean and Thai owned.

 

There's a huge flood tho of chickenboxes that they won't be able to sell, that doesn't mean the higher end condo market is unhealthy - tho.

After all higher end condos are the better value for money with better prices per sqm.

 

Chinese buy there stuff unseen online on webportals, without even getting a proper chanote in many cases, circumventing most real estate laws here like having a proper FET form.

It's only a matter of time till the chinese government cracks down on this practice. Or some Thai Hiso wants to own their condos in stead.

They are the definition of dumb money, and dumb money always ends up in a marketcrash.

 

 

https://www.thaiexaminer.com/thai-news-foreigners/2019/03/09/young-chinese-millennials-driving-bangkoks-condo-sales-with-online-buying-as-they-flee-chinese-market/

 

 

 

Everyone who thinks this is healthy and will go on forever is nuts.

 

In fact it's even illegal for them to do this: https://www.ft.com/content/5dca923a-1895-11e8-9c33-02f893d608c2

 

and It's already plummeting since years: https://www.scmp.com/business/companies/article/2187482/chinese-overseas-property-buying-plummets-63-cent-2018-hitting

 

 

 

Greed skrews your brain, every thai real estate developer who laid all their eggs in the china basket will have a nightmare sooner or later.

 

 

Chinese buyers most often want a one-bedroom condo in Bangkok. Of all buying inquiries, 40% are for one-bedroom apartments, 24% for three-bedroom apartments, and 14% for two-bedroom apartments.

 

She said 85% of Chinese buyer inquiries in Thailand are for properties priced at about 8 million baht or below.

 

[FritsSikkink]

37 minutes ago, thequietman said:

Hit them in their pockets!

 

It's the only time when I see a Thai Actually paying attention. Seriously.

 

Maybe immigration will start paying attention when the hi-so's start complaining about empty properties and rentals going down because the smart foreigners are moving out of the cities. ???? 

Smart foreigners have money and don't need to move out. They don't have immigration problems. 

[PingRoundTheWorld]

1 hour ago, marcusarelus said:

I don't think Chinese tourism and Chinese condo buying have anything to do with one another.

Of course they are connected. Chinese tourism is declining because Thailand's image in China has been tarnished. Poorer image = less buyers, guaranteed. There are other reasons too, but this has to be a main one.

[PingRoundTheWorld]

7 minutes ago, FritsSikkink said:

Smart foreigners have money and don't need to move out. They don't have immigration problems. 

Doesn't matter if you have money if you're under 50. I have money, on METV, and I'm worried every time I enter the country whether they're going to let me in or not. I'm in Philippines right now about to fly to BKK soon - I booked a ticket through Singapore, in the morning, just so I don't have to spend time in the detention center and can fly right back to Singapore same-day if they deny me. It's quite ridiculous that I have to plan my flights based on the possibility some rogue immigration officer may or may not have a bad day. Getting so tired of this shit I'm actually considering moving countries.

[Fairynuff]

I love this forum where everyone is an expert and everyone’s facts are really just their opinions 

[RBOP]

They keep saying there is a bubble year after year. 

[billd766]

2 hours ago, Mikisteel said:

Who was about in 97?

 

What kind of bargains we talking about? If that property crash happened in bok does it spread nationwide?

I was here in 1997 but I was working for a UK company so I didn't own a condo.

 

The baht in the letter half of 1997 collapsed from about 43 to over 90 per GBP. You could buy almost anything then for hard currency GBP, USD, EURO etc or use a credit card from an offshore bank and yes it spread nationwide in the tourist cities but less so in rural areas.

 

It was a great time to be in Thailand as a farang. Not so much now as it is som nam nah time for us.

[JonnyF]

1 hour ago, mike787 said:

If Thailand can improve their immigration and investment rules/laws towards foreigners would help.  As a foreigner, it would be financial suicide to buy property or condo's and brain wash myself into believing this is an investment.  Sure, anything is an investment to anyone.  

Let's define investment:  What is the "Return on Investment" (ROI) you expect to see?  If you cannot break inflation as determined by your country, or Thailand then you are losing money.  Then add to that fact, the time, effort, stress, and operational cost.  Now what is you ROI?  Some don't care, they just want it.  But if you are wise and informed, maybe the real estate investment is not so sexy...useless as lip stick on a pig.

I think it depends when you buy. I bought about 4 years and brought GBP over when the exchange rate was 55. The condo hasn't increased in price but I've lived rent free for 4 years which is almost 30% of the unit price back already and if I sold today for the same price that I bought it for I'd make 30% on the exchange rate. That's a pretty good ROI.

 

Plus I'm free to decorate it nicely without asking for permission or feeling like I'm refurbishing someone else's place and I have the security of knowing that I won't be kicked out when the landlords friend wants it or they get a better offer in terms of rent or decide to sell. It's a bit of stability, I have no regrets buying and wish I did it sooner after renting for 8 years.

[Tropposurfer]

I ain’t no economist but my gut tells me a bubble is about to burst n the baht with it.

[Phuket Pete]

Is anyone surprised ? If you treat your customers like shit they will take their money elsewhere. The Thai government are killing the goose that lays the golden egg by making you jump through hoops of fire and keeping the baht artificially high. Common sense is not common here boys. You should know that by now !

[kkith]

22 minutes ago, PingRoundTheWorld said:

Doesn't matter if you have money if you're under 50. I have money, on METV, and I'm worried every time I enter the country whether they're going to let me in or not. I'm in Philippines right now about to fly to BKK soon - I booked a ticket through Singapore, in the morning, just so I don't have to spend time in the detention center and can fly right back to Singapore same-day if they deny me. It's quite ridiculous that I have to plan my flights based on the possibility some rogue immigration officer may or may not have a bad day. Getting so tired of this shit I'm actually considering moving countries.

I'm pretty sure he was refering to the Thai Elite Visa.  More so when in the context of "money". 

[Danthai]

On an export buying trip in Chiangmai when baht went to 50 baht/1$

[justin case]

3 hours ago, peter14 said:

am already  selling  2 of my  condo !!!  Any buyer  ?as  they  treat me shit  saying am not tourist when i come stay there.  

we are all tourists ... nothing more, if you are here 1 day or 40 years

 

the right to spend all your money and go back ...

[spidermike007]

I do not want to sound like a doom and gloom forecaster, but I see the property market worldwide, nearing a rather substantial correction. Many markets are so overpriced, there is little to justify the current levels. In the US, many large markets are already starting to drop. Even a year ago, the top end of the NYC market went from a unit selling within 15 days, to the current average of 450 days. And that is with a 30% discount. So, things are about to change. I would imagine the Bangkok market will correct. But, probably not as much as the markets where financing is used heavily. 

[hansnl]

3 hours ago, geoffbezoz said:

Well the "experts " on this forum have been denying it for ages, mainly I suspect because they invested heavily and don't want to admit they will lose money. Also many of these self same "experts" have been predicting that the Thai economy is sound under the current regime and won't falter.

 

Well let's see once the Thai economy goes into free-fall due to the policies of the current puppet government including spending on military hardware yet wanting a 2020 fiscal budget with higher deficit forecasts,  exports suffering due to the policies of the last few years artificially ensuring that the baht is too strong, let's see how the many experts fair then.

 

It would appear that several voices within Thailand are now becoming realistic as to the Thai economy's weaknesses and the reliance upon foreign buyers, notably the Chinese, to artificially increase demand, thus pushing up condo prices, so all I would ask is ;  Where are the shops selling those rose tinted glasses that once worn eradicates all common sense and economic pointers ? Perhaps those so called "experts" on this forum could advise where they bought their own from ????

 

 

You seem to forget in your misguided rant against the current government that it all started to build up in around 2000, and got not much to do with the current government but mostly with a group in Thailand hellbent on money only and gambling heavily.

[MartinBKK]

Not allowing someone to enter who has the METV is pretty inexcusable imo. Are there any reports of this? I have heard stories of people being denied entry on a SETV (happened to a good friend even though he had plenty funds) but not the METV. The requirements for this visa are quite stringent. In fact, i was unable to meet them myself as i am under 50 and retired (no letter of employment). In London, you need a letter of employment or tax return if self employed, a bank statement showing GBP 5000, proof of accomodation in Thailand and a return ticket. With these requirements i really cannot understand how one could be denied entry.

[ThomasThBKK]

9 minutes ago, spidermike007 said:

I do not want to sound like a doom and gloom forecaster, but I see the property market worldwide, nearing a rather substantial correction. Many markets are so overpriced, there is little to justify the current levels. In the US, many large markets are already starting to drop. Even a year ago, the top end of the NYC market went from a unit selling within 15 days, to the current average of 450 days. And that is with a 30% discount. So, things are about to change. I would imagine the Bangkok market will correct. But, probably not as much as the markets where financing is used heavily. 

I think for thai condos most are financed, it's only foreigners here buying with cash as we can barely get a loan.

All my landlords over the years used my rental income to pay off their mortgage afaik.

 

[Dnyy]

3 hours ago, Metapod said:

Hoping for a crash so that I can buy-in

Same here.