gobbledonk Posted November 13, 2002 Report Share Posted November 13, 2002 Residential property in cities on the East Coast of Oz has continued to boom over the last 5 years, despite continued warnings that it all has to end in a bust. Has anyone on the board first hand experience of a property bust, in Thailand or elsewhere ? I assume that the cash crisis must have seen some amazing devaluations in the region, so I'm keen to hear from people who have actually been there and survived it. Link to comment Share on other sites More sharing options...
jp1 Posted November 13, 2002 Report Share Posted November 13, 2002 Has anyone on the board first hand experience of a property bust, in Thailand or elsewhere ? Japan is a very good example of a tremendous property boom during the seventies and eighties and a big big bust in the nineties (still continues). After the bust of the bubble economy property prices took a dive of more than 50%. That's the main reason for the Japanese banking problem. The banks are sitting on bad loans (hundred of billions of US$) and the properties for which they gave the loans are worth 50% or less nowadays. Link to comment Share on other sites More sharing options...
whosyourdaddy Posted November 13, 2002 Report Share Posted November 13, 2002 Yes I am surprised it has not burst since the japanese economy is so bad. When I was living in Austalia, 90-91, you did see the japanese slowing buying property in upper queensland and working their way down. Thailand really has not have that much of a property bust. The properties are still overvalued compared to the economy and the wages of most bangkokians. The condos are hurting but will survive and of course there are the 5 families that lost their shirt building the eye sore buildings that caused the asian economic crisis. But in General, properties are still expensive. Probably due to the fact that nobody would sell a house and all generations keep on pilling into the house.. It is not like back in the good old fridgid north of canada , where the parents kick you out of the house and tell you to get a job and stand on your own 2 feet Link to comment Share on other sites More sharing options...
gobbledonk Posted November 13, 2002 Author Report Share Posted November 13, 2002 Yeah, I remember seeing a story about a guy who bought an apartment 1 hour from Tokyo (by train), for about a million Oz dollars at the height of the boom, and was now facing the risk of unemployment with a property which had halved in value. He spoke longingly of regular after-work middle-management boozeups which the company picked up the exorbitant tab for - it seemed that the money would never dry up. This was the climate in which he made his big purchase, only to see it all go to hell 12 months later. There is a degree to which one feels compelled to upgrade when property values are rising so rapidly - the feeling of being 'left behind' is palpable. One thing is for sure - a lot of people are going to be left holding some very expensive shacks here in Oz when the music stops. Link to comment Share on other sites More sharing options...
jp1 Posted November 13, 2002 Report Share Posted November 13, 2002 Let me give you one example. In 1988 I decided to buy a summer residence at a famous mountain resort, called Karuizawa. I went there several times and finally found a nice piece of land which I liked. Not big, approx. 500 square meters. The asking price was JPY 130 Mio, at that time about -900.000 US$. This price couldn't be reduced. I did not take this. That was too expensive. If you go for a similar piece of land in Karuizawa today, it costs you not more than 50 Mio Yen, abt. USD 400.000. Still expensive for a location some 150 km northwest of the capital. But I think prices are coming down more. Japan has not reached the bottom yet. Link to comment Share on other sites More sharing options...
gummigut Posted November 13, 2002 Report Share Posted November 13, 2002 I will be doing some research, but any initial indications would be welcomed. Particularly, I'm looking for how residential rents and commercial rents (store fronts) have changed before and after the 1997 crash (in baht terms). Thanks! <<burp>> Link to comment Share on other sites More sharing options...
Paillote Posted November 13, 2002 Report Share Posted November 13, 2002 Says whosyourdaddy: Thailand really has not have that much of a property bust. The properties are still overvalued compared to the economy and the wages of most bangkokians. The condos are hurting but will survive and of course there are the 5 families that lost their shirt building the eye sore buildings that caused the asian economic crisis. But in General, properties are still expensive. I talked to a guy that just bought an apartment on lower Sukhumvit. I think it was about 70-80 sqm and of quite ordinary standard. Think he payed about B 2M. According to him it was a bargain. He had spent weeks investigating prices, and seemed to know the market. He was dead sure the price would rise by 20% in a year, as that is the markettrend. Well, he got me thinking that it might be a good investment buying my own condo. Enquiring at the reception, they told me that condos like mine, goes for 2.5M and a couple of years ago they had gone for 3.5M. Well, the condos are about 60 SQM, so those prices are comparable to condos in unatractive areas in expensive Norway. Surely, I think with prices like that, they are far out of reach for most Thai people. Can not understand that prices can go much higher, global economy slowdown and all. You write that condos are generally overprices. Is that purely your opinion, or is this generally accepted? Paillote Link to comment Share on other sites More sharing options...
Guest Posted November 13, 2002 Report Share Posted November 13, 2002 Says artiew: Residential property in cities on the East Coast of Oz has continued to boom over the last 5 years, despite continued warnings that it all has to end in a bust. Has anyone on the board first hand experience of a property bust, in Thailand or elsewhere ? I assume that the cash crisis must have seen some amazing devaluations in the region, so I'm keen to hear from people who have actually been there and survived it. I purchased my first condo in Pattaya in 1987 and never looked back. On average I receive 12-15% ROI and to date have an occupancy rate of about 83%. Now I have 4 condos in Pattaya and never had any problems with tenants and rent. It also depends largely on the agent you use. "money for nothing and ur chicks for free" Link to comment Share on other sites More sharing options...
whosyourdaddy Posted November 14, 2002 Report Share Posted November 14, 2002 One thing you might want to look at is that some properties are actually worth more now because of their location to tesco, carefor, or the BTS which were not around pre 97. The prices of my condo went up about 60% because of this Link to comment Share on other sites More sharing options...
whosyourdaddy Posted November 14, 2002 Report Share Posted November 14, 2002 "You write that condos are generally overprices. Is that purely your opinion, or is this generally accepted?" Depends on who you talk to. But compared to houses they are very expensive if you compare meter by meter. Plus people can have huge problems with condos is the management company is shit.. elevators not working, dirty pool etc. Houses are a much better buy! and the family will still own the land even after the condo is fallen apart 100 years from now Link to comment Share on other sites More sharing options...
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