Property market : the Boiler Room announces a recovery in… 2011

From “everything is fine” to “we are in deep shit 1997 style”… in a snap of a finger.

Impressive.

But wait, there is more : the Boiler Room announces us the… date of the recovery !

Ladies and gentlemen, not 2009, not 2010… but 2011. 😉

I feel like in a fish market.

Thailand’s property market cannot be expected to recover from the present slump until 2011, according to Aliwassa Pathnadabutr, managing director of international property agency CB Richard Ellis (Thailand).

She said the slump began in the final quarter of this year with demand in Thailand’s property market plummeting under the shadow of the global economic crisis.

“When we saw demand in the property market dropping, we suggested to our customers that they wait and see [what happens]. As a result our customers suspended investments of between Bt4 billion and Bt5 billion in the last quarter of this year,” Aliwassa said last week.

The company’s research shows that transactions have fallen in all property segments in the current quarter, some of them significantly, others slightly. This is a sign that the property market may fall by 10 to 20 per cent next year, the steepest tumฌble since the financial crisis in 1997, she said. (Nation)

That sounds great and quite reasonable.

Even more when we remember what the same company, CB Richard Elli, was saying exactly 2 months ago :

Thailand’s property market is well insulated from the global financial crisis as it is far less dependent on debt than most property markets, said real estate firm CB Richard Ellis Thailand.

I know, it’s tasty. I know, you love it, like I do. 😉

I told them that this statement would be their curse. Like “our banking system is sound ” from Bush, Bernanke and Paulson last august…

And you can count on me : I will repeat it, over and over.

Anyway, let’s be fair. Only fools and stupid people are unable to change their mind. And CB Richard Ellis is certainly not stupid.

But, you know… it’s difficult to change. I mean really. Aliwassa did start on a good foot. But soon after, she… lost it.

We believe that this recovery cycle will be faster than that after the 1997 financial crisis because global leaders such as the US, UK, Europe, Japan and China have launched measures to solve the problem. Meanwhile, Thailand’s property developers and finance firms are healthier, financially, than they were in 1997,” she said.

You see… It’s pathologic. The magic of the words, the force of the incantations, the power of the verb… But nothing substantial behind. Emptiness.

There is another expression to describe this devastating bias : wishful thinking.

See you in 2011…

Okay… Aliwassa is not paid to say “I don’t know”. But that would be refreshing.

“We don’t know. The crisis is so severe, so global, so pervasive, so… We have no clue. The historical points of reference don’t apply anymore. It’s impossible to foresee the future. Be patient. Stay on alert. Collect data. Take time to analyse all the differents views. And more importantly : stay humble.”

This is what I would like to hear from the Boiler Room.

[I wish you a happy Christmas. Time for a few days of rest. See you soon. Crisisfully Yours.]

10 Responses to “Property market : the Boiler Room announces a recovery in… 2011”


  1. 1 chinesethai 23 December 2008 at 2:31 am

    Nothing is different from yesterday’s report from the Commerce Ministry, which stupidly cited the airport closure as the chief cause of historic fall in exports. The fact that one works for CBRE doesn’t give him/her extra credibility. I don’t take these people seriously.

  2. 2 Insanity 23 December 2008 at 7:35 am

    ThaiCrisis,

    What is happening, or projected to happen to the value of commercial property?

  3. 3 Insanity 23 December 2008 at 7:52 am

    It took a while for the panic to become visible, but today,
    that’s exactly what you see.

    What’s listed as property market values in Thailand is bunk! These are purely fictitious beliefs. There’s no truth to it; the fakery is enormous.

  4. 4 ThaiCrisis 23 December 2008 at 9:09 am

    Commercial property ? In Thailand I don’t know. I don’t think the country is “over stored”.

    But in the US… it’s written on the walls… I mean the malls… 😉
    http://globaleconomicanalysis.blogspot.com/2008/12/consumer-demand-for-nearly-everything.html

  5. 5 chinesethai 23 December 2008 at 9:51 am

    Yesterday Corporate A laid off XXX workers. Today Corporate B filed for bankruptcy protection. Last week Corporate C took big hit from a ponzi scheme. Tomorrow Corporate X will get bailed out from the government. Corporate Y has huge inventory of XXX unsold. Imports were down sharply in XXX month. Prices of ABC fell sharply…..

    Can our brains tell the difference among all these news of similar tone that arrive everyday? Frankly, mine can’t. I just know that my family and I have no luxury condos and junk stocks hoarded in my portfolio. I am shouldering no debts. My savings are safe. I can help my peasant friends in China and Thailand to catch fishes. I can still give some of my excess to those in need. They are happy. I can still eat healthy food and work out every morning. That’s enough to get me sleep tight in the crisis. “Sufficiency Economy” 😀

  6. 6 Insanity 23 December 2008 at 10:14 am

    ThaiCrisis,
    Commercial property: such as demand for Grade A and Grade B office and Industrial space and associated rents. Such information would be a good indicator of businesses postponing expansion as they don’t know what will happen in Thailand or, downsizing.

  7. 7 InPhuket 23 December 2008 at 11:59 am

    Thailand only has 1 recourse… The Baht Must Fall!

  8. 8 antipadshist 24 December 2008 at 5:48 pm

    latest on Korn’s plans

    http://nationmultimedia.com/2008/12/24/business/business_30091798.php
    http://nationmultimedia.com/2008/12/25/business/business_30091832.php

    “the plan to raise home buyers’ tax allowance to 100 per cent, as a temporary measure to boost the sagging economy…”
    “… raising tax allowance for home-buyers to more than Bt200,000 in 2009 …”

    also here:

    NEW FINANCE MINISTER
    Bt180-bn spending boost
    http://nationmultimedia.com/2008/12/24/business/business_30091745.php

    “We will spend at least Bt100 billion more under the supplementary state budget…”
    The supplementary bud-get for fiscal 2009 plus the current Bt1.8-trillion budget will go to Parliament for approval next month…

    On the proposed corporate income tax cut, he said government spending was a more effective way to stimulate the economy than cutting the tax rate.
    The government will also consider capital increases for state-owned banks.

    I am sure all the Dems are very happy, especially those who were able to get ministerial seats. 🙂

    “Poseidon girl” is so overwhelmed that she decided to surround herself by 10 “advisers” – reportedly a record number for any minister so far !

  9. 9 antipadshist 25 December 2008 at 12:27 am

    while Korn hurries the big SPENDING as a supposed remedy for Thai economy, at the same time other specialists say:

    you can’t increase consumption while discouraging savings and expect the economy to survive …

    We’re talking about the bailout… the fix… the save… the plan to revive the world economy by giving it more of what it least needs – more debt. The idea is to make the pain of the correction go away by encouraging people to act as though they had nothing to correct. They’ve borrowed too much. And they’ve spent too much. But the feds aim to make them borrow more – by bringing the cost of borrowing down to an all-time low – and make them spend more… by causing prices to rise. (When money loses its value… they’ll be glad to get rid of it.)

    It’s a consumer economy, they say; all we’ve got to do is to lure people to consume…

    a consumer economy requires consumption, but that’s not all it requires… [it] requires saving…and investment. Otherwise, increasing consumption isn’t possible…

    every fool also believes that if you mix in a little macro-economic mumbo jumbo that, somehow, central bankers can increase consumption by discouraging saving…
    ( from : Faith in Humbug
    [Humbug: “hoax”, “jest”, “nonsense”, “gibberish”; as a noun, a humbug refers to a fraud or impostor, implying an element of unjustified publicity and spectacle] )

    so, that’s precisely what Korn & Abhisit wanna do :
    SPEND MORE money, ASAP, add more to budget to spend even more!

    well, after all, Korn is an investor banker trained in the “best traditions” of JPMorgan [= Rockefellers].

    it is a dangerous time for Thailand ! once again it has fallen into iron grip of elite (bankers, corporations, bureaucracy/ judiciary and military). whatever Thaksin has allegedly done – pales in comparison to what Korn & Abhisit (and corporations as CPG) will do to this country – rip it apart, suck it dry of its wealth …

    that is why they were so desperate and in such a hurry to get in power that they employed PAD and “sacrificed” the tourism industry (airports hijacking). because in the end their reward (profits) is much bigger ! 😉

  10. 10 Alice Spencer 8 January 2009 at 6:17 am

    I agree the Baht is holding so strong that prices have gone up by30% to many of the traditional buyers ie: British pond & Aussie Dollar.


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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