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Condo prices- why haven't they fallen like in USA


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Condo and house prices in USA are down almost 50% of where they where in the peak ( 2004-2005). It seems like the condo prices in Pattaya have not fallen at all. Any thoughts as to why Pattaya housing market seems to be immune to the current financial crisis. If you had to guess, where do you think condo prices are heading in the next couple of years. Thanks

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Well housing prices did not drop 50% everywhere in the US. Sure in general they did like in California and Florida but some places like Texas, Arkansas were not really impacted. So it depends on the market.

 

I think most people in Pattaya pay cash for the condos so no reason to sell because you lose your job and can't make your payments. This is unlike the people in the US that bought something they could not afford.

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Yes, I agree with you that some US markets were hit harder than other, but overall the housing prices have dropped alot. Not only in USA but England and Europe too, from what I've read. With many people hurting from job losses and housing/ stock market losses, I would think that it would affect the Pattaya condo prices. The law of supply and demand. The supply in Pattaya is great, as they are alway building. The demand- I don't know ? It almost seems that what happens in the rest of the world doesn't affect Pattaya. Maybe, I'm trying to put my western thinking into a Asian market, which I'm not really familar with.

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ive been keeping a very good eye on condo prices, im also very surprised prices havent fallen as guys in there own

country have fallen on hard times/because of the credit crunch around the world and had to sell up, but that seems not to be the case,also new condos are still being built,so it would seem the people still have the money to spend and keep prices up........still keeping my fingers crossed i can pick up a cheap one

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Just sold a house in Texas and made mucho $$$... No problems with the housing industry here... Now, Mexifornia & Florida have been hit very hard with prices off over 50%...

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It's a buyers market.... If people are buying then the prices will remain the same. In the U.S. allot of people are losing their jobs or taking pay cuts. Even guys who are holding their own financially are not willing to jump into any type of financial commitment.

 

I gather people are still buying in Patts if not I'm almost certain the prices would drop some..... However as they say TIT...... Things arent always the same as other parts of the world.

 

Keep your eyes open and see what happens!

 

 

Regards,

 

PT

Edited by Puro Tejano
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I would love the see the prices in Pattaya drop to where they should be 15,000 - 25,000 USD for a upscale 1 Bedroom, however I sure this wont be the case because the Condo market in Pattaya is driven by Mongers retiring there with their Savings accounts and fixed incomes or by those who still have enough money to live their current lifestyle plus an extra 100,000 - 300,000 cash to toss on a second home in Pattaya.

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I live in Florida and can say houses AND condos are down 50%++. Especially in Tampa, Orlando, and all around S Florida.

 

Regarding why haven't they dropped like that in Pattaya, in spite of an ever increasing supply, one word--leverage.

 

99.9% of the condos are bought for CASH in Pattaya thus their is NO mortgage. It's EASY to sit on a condo with NO mortgage, NO property taxes, and minimal maintenance fees.

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I live in Florida and can say houses AND condos are down 50%++. Especially in Tampa, Orlando, and all around S Florida.

 

Regarding why haven't they dropped like that in Pattaya, in spite of an ever increasing supply, one word--leverage.

 

99.9% of the condos are bought for CASH in Pattaya thus their is NO mortgage. It's EASY to sit on a condo with NO mortgage, NO property taxes, and minimal maintenance fees.

 

This explains not having Foreclosures. But many new Condos are currently being built and as you stated above 99.9% are cash deals, so I can't understand how they are keeping their value. In this world wide recession who is plunking down $75,000 - $300,000 usd cash on a condo in a third world country? In the rest of the world when sales are slow prices drop sharply because Condos sitting empty is not an option WTF? This is Pattaya

Edited by Murphy
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Don't forget the places that are hit the hardest also went up the most and fastest. In Canada, we don't have anything like you have in the US either, plus not anywhere near the subprime loan mess too.

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If you look around now, prices in Patts already started to slide down. In my condo original prices have been cut by about 15% from the developer and up to 25 % cut from private sellers. Also if you look around you surely will find a bargain.

Just the other month, someone i know bought a condo for half the asking price (seller was desperate to sell)

So think this crisis has not hit Thailand as yet as hard as it hit other country's but it will in my opinion very soon

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Why dont condo prices drop? living in the sex capitol of the world PRICELESS!!!!!!!

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It's obviously all about demand and supply, and prices won't go down until people start to panic sell because they need to liquidate. The crisis in the US was fueled by buyers being overextended and either walking away to get out of the debt, or panic selling to recoup what they could and unload a debt they could no longer carry. If the buyers in Pattaya paid in cash and don't need to sell, and if there is still new buyers for the new units, then prices will remian and there is no push to bring prices down. I wouldn't be suprised if many new buyers have moved their cash there because it has remained stable and find it a less risky investment because it caters to an international clientele.

<p>

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As other posters have noted, I think the fact that people usually pay cash outright, therefore no repayments, no foreclosures and relatively few distress sales, is what is keeping the price up, relatively.

 

I have two endowmwent policies that mature in 2011 and have kept enough value to buy me a one bedroom condo in Jomtien. Just! As a result, and just to pass idle moments at my desk, I monitor condo prices on an almost daily basis. I also visit several times a year, as do several friends who already own there, and we all keep a keen eye on prices locally. From that, I have three main findings:

 

A lot of the estate agents are extremely tardy about updating the properties on their website. A huge number of the properties they advertise are long gone, if indeed they ever existed. And if you were to go by the advertised prices, you would get a picture that prices are higher than they are in reality - so there is an underlying downward trend.

 

When you look at the sites that are regularly updated, you will definitely spot some real bargains. I would guess that these are people who have "broken ranks", probably for circumstantial reasons, have decided they don't care what the estate agent tells them the market price is, they just need to get some cash and get out. I'm no expert but I would guess that the more sellers 'break ranks' and offer their condos at a knockdown price, the more that must deflate the general market price. After all, if someone looks through a column of, say, 20 similar sized properties and sees about 15 at the same price but 5 for considerably less, where is all the buyers' money going to go? The remaining 15 will have to start to compete.

 

Finally, the premium you pay for a sea view is incredible! You can get twice as much for your money if you look about a kilometre inland. But of course, up 2 u.

 

The online places I go to where you seem to get accurate, current prices is the Jomtien Properties website (they seem to be more conscientious than most about updating), the downloadable classified section of Pattaya Today...and the classified section of another popular Thai expat forum, which it would obviously be unfair to mention here by name.

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I'm also amazed at the prices for new condos which have just been built or are still under construction or in planning. Most don't seem to have gone down from just before the banking issues across the globe. My guess is because they haven't been completed yet, it doesn't cost them anything if they don't sell. Once the building is up with lots of vacant units, that's when they start loosing money.

 

I'd look for new condos that just finished being built and haggle on the price. There's no way people are buying even close to how they were 2 years ago so the prices on new developments are overpriced.

 

I have noticed that some developments like the City Garden behind The Avenue have stalled or are taking way too long to finish. I'd be interested to see how many of the current condo projects going up have made any progress a year from now. Speaking of that, what ever happened to Ocean One? Went past the site the other day and it's still just a bare patch of land with a concrete plant on it. Guess it'll bust too.

 

What do you guys think about the future value of condos here anyhow? I think they are building a glut that'll be on par with what happened in Florida and Vegas. As the newer, more modern units go up, it's hard for the older ones to compete for sales when things get saturated. I look at some of the units in the View Talay buildings for example and they look ancient compared to newer developments at the same price.

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I'm also amazed at the prices for new condos which have just been built or are still under construction or in planning. Most don't seem to have gone down from just before the banking issues across the globe. My guess is because they haven't been completed yet, it doesn't cost them anything if they don't sell. Once the building is up with lots of vacant units, that's when they start loosing money.

 

I'd look for new condos that just finished being built and haggle on the price. There's no way people are buying even close to how they were 2 years ago so the prices on new developments are overpriced.

 

I have noticed that some developments like the City Garden behind The Avenue have stalled or are taking way too long to finish. I'd be interested to see how many of the current condo projects going up have made any progress a year from now. Speaking of that, what ever happened to Ocean One? Went past the site the other day and it's still just a bare patch of land with a concrete plant on it. Guess it'll bust too.

 

What do you guys think about the future value of condos here anyhow? I think they are building a glut that'll be on par with what happened in Florida and Vegas. As the newer, more modern units go up, it's hard for the older ones to compete for sales when things get saturated. I look at some of the units in the View Talay buildings for example and they look ancient compared to newer developments at the same price.

 

 

Sadly, but this is how this game works here.

Developer pre-sells rooms at a cheap rate. Once enough money is received for the entire construction, they will start to build. However as most business go, budget always go wrong. So should the money run out half way or almost at the end of the construction and developer can not raise more-they just stop building and you can say goodbye to your money.

Unlike in many other country's buyer is somewhat protected where is in Thailand you are not at all.

Most definately rich or influential Thai will get a refund, everyone else has to take legal action in hope to recover the money. However in reality, if you have already paid 1 million baht for the room and now you need to spend another 1 million on legal fees to recover the first million-you still out of pocket. So in most 99% of the cases people just write the money off.This is very common practice in Thailand especially in Bangkok, this is why you can see so many high rises almost finished, but then just left.

 

Many people in Thailand, especially Thai, when it comes to business do not really plan or think for the future. So basically they see someone developing and they start to do the same. Thinking behind that is "What if"

So the neighbor made money building condo, so why not i do the same. The fact that it is already over developed-does not even cross their mind.

Then you also have foreign developers, who simply assume they are smarter then Thai and will sell better.

 

At the end of the day, market will always adjust itself. There are already too many empty new condo's for sale, there are still many sites being finished and more are starting to build as we speak.

On top of it, many foreigners are trying to sell their property to cover losses back home.

You can only blow so much air into the balloon before it blows up.

I would strongly advise against buying anything at the moment in Thailand-sit it out and wait. Thai economy has bluffed for long enough-it will crash and i think very soon.

Thats my 2 cents worth :)

http://www.youtube.com/watch?v=psvL2eYQ7YM&feature=related

There are three sides to every argument: your side, my side and the right side.

Thank God I'm an atheist.

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The downturn in tourist..The 51%Thai 49% Farang will eventually hurt...Disrupted Government..Swine Flu...Not being able to take Profits out of the country from a sale will ALL have an impact...The Condos scheduled to be built on the Phoenix Gold course has been cancelled.. The every Strong Thai baht...All will have its effect more sooner then latter...

No place on the Planet like Pattaya..Don't let your meat loaf

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At the end of the day, market will always adjust itself. There are already too many empty new condo's for sale, there are still many sites being finished and more are starting to build as we speak.

On top of it, many foreigners are trying to sell their property to cover losses back home.

You can only blow so much air into the balloon before it blows up.

I would strongly advise against buying anything at the moment in Thailand-sit it out and wait. Thai economy has bluffed for long enough-it will crash and i think very soon.

Thats my 2 cents worth :D

 

Yes, very interesting perspective. I have to say I agree. I suppose one of the advantages of recession is that if you stay as Liquid as possible throughout, with a minimum of liabilities, you'll be well placed to pick up some astonishing bargains when you reach the other side of it.

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I think if you were THai you would find that the prices of the Thai 60% of a building are being sold at very low prices.

The developers and real estate agents are always going to try a charge a premium to farang. You guys just need to wait. If farangs stopped buying for long enough then the price will fall closer to the Thai price.

Am I worthy of being a Soi Prisoner you tell me?

 

Zero to Hero

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I believe the prices will start to come down in Thailand sooner than later. Philippines have seena decline in Manila and Davao. Just a little slower to react. be Patient.

 

 

 

 

 

 

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because the Condo market in Pattaya is driven by Mongers retiring there with their Savings accounts and fixed incomes or by those who still have enough money to live their current lifestyle plus an extra 100,000 - 300,000 cash to toss on a second home in Pattaya.

 

This is partially correct but not the big picture.

 

Pattaya does have a higher % of Farang owners compared to any other Thai city but its still probably only in the region of 40% and cannot exceed 50% anyway.

 

To a degree the Pattaya market is controlled by the Thailand Market - and that is 95% Thai.

 

Many Thai owned condos, especially in resort towns, are investments purchased with cash i.e. no mortgage. They simply see a cash investment in property as a better long term investment than deposit rates (VERY low here). Many will therefore happily sit out 10 years for markets to recover and many will actually NEVER sell them for the reason below.

 

Few Thais will sell at a loss and most are actually happy to sit on them in the long term as they buy to increase estates and long term family wealth as opposed to the more short term speculation we often see back home.

 

Condo prices HAVE fallen in Pattaya but these tend to be in the form of special offers from developers in new schemes - often unbuilt. The second hand market remains fairly stable for the reasons I have pointed out - at at least that is ONE factor anyway. The discounts offered by developers in theory should filter down to the second hand market but they dont due to this reluctance of Thai investors to sell.

 

One thing that is for sure though is that properties are not selling at the rates they were before so sooner or later anyone with any urgency to sell will often drop the price. Again people with an actual urgency to sell, Thai OR Farang, are a minority.

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The downturn in tourist..The 51%Thai 49% Farang will eventually hurt...Disrupted Government..Swine Flu...Not being able to take Profits out of the country from a sale will ALL have an impact...The Condos scheduled to be built on the Phoenix Gold course has been cancelled.. The every Strong Thai baht...All will have its effect more sooner then latter...

 

All very good points except one.

 

You can take profits out providing you did the correct Tor Dor 3 certificate when you purchased it. Its not actually called a Tor Dor 3 now but the new name escapes me.

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