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drbubb

Bangkok, Thailand Property

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Denied Mortgages have increased 30-50pct from 2015

 

http://www.property-report.com/what-can-thailand-developers-do-to-counteract-high-mortgage-rejection-rates/

 

That s obviously bad news if you bought a preselling unit...

 

that is high!

What happens to the people who have their mortgages denied?

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Infographic-Foreign-Demand_EN_Final-1024

 

Oddly, higher prices may help spur foreign demand.

Why?

Because the higher prices may mean that the X% selling commission is now high enough to interest the agents in foreign markets to "handle" Thai properties.

That's what we see in HK.

Bangkok condos are now expensive enough to pay for the expensive roads shows in HK hotels - but the Philippines, for example, has not yet reached that price point

 

(At the moment the road-selling of TH properties is mostly done by TH agents, and PH agents are bringing a few of their higher end properties to HK):

 

“Thailand’s condominiums, especially those in Bangkok, have significantly lower prices than units in Hong Kong or Singapore and have good rates of return when leased and resold. These provide the positive factors which draw the interest of foreign buyers who make the purchases for both residential and investment purposes,” says Anukul.

Supalai and Eastern Star Real Estate are among the companies to have hosted road shows in China while Ananda Development has targeted buyers from Hong Kong, Singapore and Taiwan. Sansiri was among the 1st Thai developers to venture into foreign markets and has sold a great number of units to buyers abroad. Despite the potential, there are also challenges developers face when selling to foreign buyers.

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EXCELLENT Report - from MDS and UBS !

 

Summary

=======

UBS's View, 25 April 2017

.

: Bangkok, TH :

We expect 2017 to be a better year than last for Thai property given more favourable demand-supply dynamics in the condo segment. House prices are expected to rise moderately on the back of land price appreciation and an increase in the proportion of new condo launches in the high-end segment; ... a short-term strategy employed by a number of big developers to navigate through rising rejection rates in the low-end segment. In 2017, we expect moderately positive house prices growth for the primary market, given rising land prices, and an increase in the proportion of new condo launches in the high-end segment: 85% of the buyers are Thais and the remaining 15% are foreigners. For the secondary market, we expect prices to be flat. In Bangkok there can be a ~30% price difference between primary and secondary pricing, with local consumers strongly favouring primary over secondary property for purchase.

.

: HK : We assume three Fed rate hikes in each of 2017 and 2018, in line with our US economists' revised view. We have assumed the Fed hikes are passed through into higher HK mortgage rates... We estimate absorbing two further hikes ... Our multivariate regression model suggests HK residential price growth of +1% in 2017 and -3.4% in 2018. We note our country team is more conservative, assuming Hong Kong residential prices decline 5-7% in 2017..

.

: Singapore residential prices have fallen 11.7% from their Q3'13 peak.
We expect the downtrend in Singapore residential prices to continue, given rising interest rates, elevated vacancy rates and slower economic growth. Our multivariate regression model ... is pointing towards a 4.5% fall in Singapore residential prices in 2017, fairly close to our country team's estimate of a 6% drop.

.

: Manila, PH :

Launches in Metro Manila declined 12% in 2016 but take-up improved (+25%) according to Colliers, resulting in a decline in inventory levels from a peak of 2.6 years to 1.7 years. We expect the developers to respond with a pick-up in launches and capex this year. Residential supply is forecast by Colliers to grow by 54% over the next five years, putting downward pressure on rental rates. A decline in rental yields from 6% to 5% may put into question the ability of residential prices to hold in 2018...

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Peter from the Property Club talks about the advantages and disadvantages of living

in PH versus Thailand and PH is the winner because it offers him more income opportunities

even though Thailand is better for food, accomodation, electricity and political stability.

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