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

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47 minutes ago, Isaan sailor said:

And how did Thailand get the large cash reserve?  Buy jacking interest rates, and sucking in hot money.  Very corrupt.  Meanwhile, tourism and exports will rot away with an overpriced Baht.  And we don't want to hear about Baht stability with gold.  Baht is overpriced compared to all other SE Asian currencies.

Thailand got the large cash reserve because of tourism and the fact that it exports more than it imports.  Not really rocket science except in Issan.  Thailand does not determine the price of the baht relative to the pound or dollar.  The pound and dollar determine the value of the baht.  If there is another Brexit vote the baht will go down.  As will every other currency relative the pound.  

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9 minutes ago, Somtamnication said:

How easy they forget 1997. These people are something else!

It is the year they floated the baht and started to stockpile foreign reserves so a run like 1997 could not happen again.  What did they forget?

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1 hour ago, hobz said:

Realying in Chinese investment... This is the most interesting part. What is your prediction? Will the Chinese economy continue to grow or will it crash?

Frankly as the pre eminent economy in the world, sure it will slow as the global economy slows but when the upswing comes China will roar away. Why do I say that ? well putting  cheap labour to one side it's their work ethics compared with other nations in my view that makes them efficient at most things they do. But the Chinese buying into Thailand is no different to how they have bought in to other countries. Canary wharf in London is 34% owned by mainland Chinese and Hong Kong investors. That massive investment started in the mid 1990s so they just move around to  get the best returns or easiest way to launder money !! or both.

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5 hours 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.

Of course your many economics degrees allowed you to reach this conclusion.

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Found a rather fascinating essay on the reasons behind the financial crisis of 1997. Fundamentals appear to be alot different now.

 

An excerpt: 

Jim Glassman looked at the crisis in a different way. He wrote that the main cause of the crisis was the decline of profitability of manufacturing caused by global export competition and over-capacity. He showed that manufacturing profit rates continually declined since 1990.

Edited by metisdead
Edited as per fair use policy.
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5 hours 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.

 

 

 

This is wrong,  its oppsite that all the expensive houses / apartments are either owned by chinese or russian.

 

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It is not about who or which race that bought the property. Every country's is pegged with USD and if United States economic crashed the countries which have market economics growth will sink with it. Only 3rd world country's property market will be less affected because their paper money is worthless and there is no or almost zero economic growth drive and people in the 3rd world country are fear of lack of food and basic medical need.

Unlike modern country and modern cities, people are worried that their income is cut-off that would have caused them to liquidate.

Of course when the global economic crisis happened. Prime area property will not just dive down <50% to <70%. The most is only about <30%. Yes, the most the price will dropped about <30%. If a property is valued at US$100,000,000 it probably cost about US$750,000 then. For those who bought a property to stay, they won't even bulged a little as it is their only place to dwell in.

Edited by TTL2

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6 hours ago, Matzzon said:

That a property crasch and the economic bubble will burst, that is as certain as all the dumbnuts still walking the Earth.

However, that it would be out of the reason that the Chinese pull out is as far from the truth as humanly possible.

Have no fear. The Chinese invasion has only started. With already close to 1,5 billion people in their own country, the spaces to fit in more in the ever blooming baby-boom circus is starting to be very limited. They just need to continue steal more pieces of Thailand, the country they put their sights on.

   My last 4 condo sales were to Chinese buyers.  The most recent, in June, was my Bangkok getaway condo.  First buyer that looked at it snapped it up.  No view to speak of, only 24sqm, but a good location near MRT and Airport Link, a nice condo project by good builder, and a jazzy renovation.  That was enough.  The Chinese market is just developing.

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7 hours ago, webfact said:

Some 20% of condo units are being bought by foreigners.

Question from a non-native English speaker: what means "Some 20%"? 40, 60, 80%? Or something in the 20%, 21, 22, 23%...?

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There are 200,000 Expats in Thailand, as the latest report said. 50,000 are working for foreign companies. So there are 150,000 left, they live all over the country. If they ALL leave, it will not kill the market. No idea how many Expats are living in Bangkok. 

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