think_too_mut Posted July 23, 2004 Report Share Posted July 23, 2004 Thai concerns over property boom July 22, 2004 Thailand faces potential economic problems because its property market is growing nearly as quickly as in the run-up to the 1997 Asian financial crisis, analysts said. The Agency for Real Estate Affairs (AREA), a private property consultant, said there were 235 new projects with a total of 30,478 units worth 103 billion baht ($A3.5 billion) launched in the first six months of 2004. AREA president Sopon Pornchokchai expressed concerns that a similar number in the second half of the year could lead to economic woes. "If the economy does not improve as expected, the launching of many projects might cause more economic problems," he said. Sopon said banks should be careful over loans approved to clients and project owners. New property launched in 1995, two years before the economy crashed, was worth 226 billion baht as buyers and builders piled up the debt. Thailand provided the spark for what is now known as the Asian financial crisis when it let its currency float in July 1997 amid a balance of payments crisis. That set off a chain reaction of collapsing currencies and soaring interest rates throughout Asia which crippled economic growth and led to massive World Bank/International Monetary Fund bailouts. © 2004 AFP Link to comment Share on other sites More sharing options...
.. Posted July 23, 2004 Report Share Posted July 23, 2004 I have been saying this for months. They are building literally 1000's of high end condos here at sell for B6-12M+ and will rent for B100K+/mo. Just who in the fuck is gonna buy all of these and who will rent them when they are bought???? Especially with the anti-farang sentiment (both personally and legally) and lack of incentive for foreign MNCs to relocate here. 99.99% of the Thai's certainly cannot do it and there is a very small number of expats willing to. Cheers, SD Link to comment Share on other sites More sharing options...
samak Posted July 23, 2004 Report Share Posted July 23, 2004 agreed suadum only small number will be occupied and/or rented out; therefore pure object of speculation (income is expected to come from value increase and not from rent out) and sooner or later we will see a bubble again. Link to comment Share on other sites More sharing options...
.. Posted July 24, 2004 Report Share Posted July 24, 2004 Yup, and the property is already way overpriced, so no gains to be had for a long time IMHO. For shits-n-giggles wifey picked up a brochure for the "swanky" new Evanston development at the Soi 49 end of Thonglor 25, next door to our townhouse moo baan. Now this place was a "ghost" since 1997 (basically only the poured concrete and most of the brick dividing walls, nothing else) and was just bought in September last year. I, my Thai family and some other expats were looking at actually purchasing this half finished development a couple of years ago and making midlevel apartments out of it. The cost was B82M for the property. We could not come up with enough from investors to make it feasable (only about B65M but no one would lend on an unfinished property even though the land was freehold). Anyway, they are finishing them as 23 condos of anywhere from 393 to 487 M^2 with ~28 W^2 of land along with them. Sell price is B25K/M^2, except for the furnished show house at B33K/M^2. Terms are 35% down plus a utility charge of B100/W^2 for 2 years. That makes the prices B9.8M-B16.5M! It looks like 5 of them may be sold as they are not on the price list I have -- or maybe the developers are keeping them for themselves (they are the choicest parcels)? I am following it with interest. They completed the show unit quite quickly, but I do not see as much activity now... Cheers, SD Link to comment Share on other sites More sharing options...
torrenova Posted July 25, 2004 Report Share Posted July 25, 2004 Over the last few years I have continually cranked the numbers for apartments in Bangkok and now for Pattaya. The figures for mid level developments and upwards in Bangkok don't come close to stacking up. As Suadum rightly puts it, who the fuck can afford to buy these places and perhaps more importantly, who the hell is going to rent them ? I cannot see any capital appreciation and they may well fall in value. To a lesser extent, this is evident in Pattaya. They keep on building, particularly up in Jomtien and there are already hundres of empty flats for sale or to rent. There's a good number of top end places around Bt60k+ if some daft fuckers want to pay that. Link to comment Share on other sites More sharing options...
Guest Posted July 25, 2004 Report Share Posted July 25, 2004 Building new apartment complexes next to the skeleton-strewn condo graveyards of '97??? Agh yes, town planners. :: Link to comment Share on other sites More sharing options...
Guest Posted July 27, 2004 Report Share Posted July 27, 2004 Many condo projects claim they are 100% sold out, but what many people don't realize is that this simply means that someone has placed a small deposit on the condo. I was looking at condos in Hua Hin and I was told that I could reserve a THB 11million condo for with a check for just THB 10,000. If that is all it takes to reserve a property, it is no wonder that these places "sell out". The lending practices and legal system are also a big part of the problem. Connected lending is back in practice big time. Developers with dubious credit, little experience (or past experience on failed projects) and no business plans but good family connections are getting loans for fantastic amounts to build new projects. Individual Thais with relatives and cronies working in banks are getting home loans that are simply not justified on any rational basis. And then once a loan is granted, if the borrower defaults, it takes forever to foreclose. All of this is fueling irresponsible speculation in the Thai property market. Shades of 97' Link to comment Share on other sites More sharing options...
torrenova Posted July 27, 2004 Report Share Posted July 27, 2004 Personally, I'd welcome a correction of property values as I'd soak up some of the reposessions. Link to comment Share on other sites More sharing options...
OCgringo Posted July 27, 2004 Report Share Posted July 27, 2004 ......Personally, I'd welcome a correction of property values as I'd soak up some of the reposessions..... the problem with that is then the whole economy takes a shit, first they need someone to blame , because for sure it was not them ! then all those workers are out of a job, which makes the streets more un-safe. Then the bahy takes a shit , prices for normal things go up and the regular people are screwed, its happened that way all over the globe....... Link to comment Share on other sites More sharing options...
whosyourdaddy Posted July 28, 2004 Report Share Posted July 28, 2004 Hopefully this time the goverment will learn that their shit does stink ( as someone else stated) Link to comment Share on other sites More sharing options...
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