Bubble economy: Lessons from Japan and the United States

Bubble economy: Lessons from Japan and the United States

Speech on the occasion of the anniversary of 10 years Co., Agency for Real Estate and Home Affairs (April 2544).
          Professor R. de Wolf Gallery, Lincoln Institute of Land Policy. Compiled by Dr. Sophon Pornchokchai Managing Agency Ltd. Real Estate in Indian Affairs.

          Appraisal of teaching experience over 30 years of real estate in Japan, I found a strange one is the rate of return on an investment property is very low (only about 2%, while the other is about 6-8%), but the price. return is very high. High until the last one 15 years ago, has been estimated that Japanese figures are for only 1 / 33 of the United States. Back up to 2.5 times the value of land.
          During the boom of the Japanese 15 years ago, we found that land prices up to 52 million baht per square wah in the current exchange rate. There is no development in any form to reflect the higher market prices this. On the other hand. Value of the land unrelated to it. If property value is determined by the rules of the market value of land in Japan did not comply with the rules of the possibility of the highest and best use of it. It is also inconsistent with the rules of the expectation that. Assets held down by expectations of future benefits at all. This is because land prices in Japan, based on speculation alone.
          The current real estate prices in Japan fell more than 60%, and also expected that. The price is reduced by approximately 50% in the next 2-3 years because the price is still high in many habitats in Japan is 240,000 baht per square meter, while in the city of Los Angeles. J. Ellis. Is only 7700 baht per square meter.
          Japan's experience indicates that The Japanese government also lacked awareness that Tax benefits that are particularly useful in making the land more efficiently. Can be used to develop infrastructure for value added tax of land on the other hand. The exact cause of property tax base. Reducing the land tax or property tax or real estate leads to the problem is not the correct way. (This is to help entrepreneurs who remained only a few).
          For the problem in the United States. Has its roots in financial institutions. Statement by the savings and loans. In normal economic conditions. Savings and loan industry, it's no problem. But when the "boom" of the economy in the late 1970s and early 1980s, circumstances had changed because of movements in interest rates at various financial institutions for short-term loans to finance long-term
          The main point is that the financial problems. Corruption of public officials. (With embezzlement or "Eaahoapna Eaataapare") and the owners or managers of financial institutions. To cause damage, such as loans without collateral. A latency of several overlapping sub-loans. Later on when the federal government to intervene to resolve. I have to lose an enormous amount of money for this purpose. Moreover, the financial industry, politicians in parliament, these can also lead to "buy time" until the issue has been delayed. Damage increases.
          And finally, the U.S. federal government needs to intervene in the year 2532 of the politicians. Government officials. Owners and managers of financial institutions, was arrested and prosecuted. (He asked).
          Moreover, the government also Resolution Trust Corporation (RTC), which is the Thai Asset Management Corporation, the RTC was set up, we're going to have is important. The sale of the property considerably. Fast and best prices on the real estate market and financial impact to a minimum. And to provide housing to low income. (While there is plenty of supply remaining.)
          Another interesting question. The United States is, what AdWords accounts are exhausted. Did not audit the financial institutions to properly account for these "cheat" investors were very corrupt. Answer them. The elegant and functional accounts. To be paid handsomely. It is noted that in the presence of a massive fraud, a professional (which of course would include a property valuation), it is often purchased. But even in the United States. (Land of civilized people) is no exception at all.
          If you look deeply to find that in Japan, the lack of tax efficiency. Spread out to make trouble. Land price rise will not stop. Valuers in Japan. A separate assessment of land and buildings. Information dealing with land prices rising, "blind" without bringing that speculation is not worth the price compared to the hybrid market, "unremittingly" not to convert income into value. Particularly for assets that generate income. A costly point of failure in Japan.
          Prior to this release. The management of the Appraisal Institute in Thailand since February 2544 has shown that speech. In the period before the 2532 crisis in the American Association of Valuers, there are many associations. Lack of quality control and evaluation as they should. In contrast to the professional supervisor is about 10 years ago (not too late for us to begin a serious, professional development).
          Note that the interest is in the market would have a "fool" anyone who does not realize that there is a "fool" in the market, it could become "a fool" their own "fool" these are often bought for a price. unreasonably expensive. And suppose that there is "a fool (over)" purchase price is generally higher.
          The final conclusion of Professor Wolf Gallery is the "greed" is a major source that causes the most trouble. Even with modern tools. Equipped with a good one. If we are greedy, we just might "get lost" has such a wealth of information dealing with a wide and very deep. But in the analysis. Analyzed by greed, not neutral. Opportunity to analyze the distortion and damage to invest, it will happen.
          To solve the problem. We need to create a system to prevent over-expression of the greed that has such a high value assets. It's reasonable estimate by more than 2 of the evaluation if it is to find different ways to analyze why immediately. Elitameli not be released. We have created a system to evaluate its hiring, but to prevent the "Hua" the responsibility to solve the problem. But do not try to solve it as transparent as possible. Transparent, but the basic pattern. Reasonable doubt before that. To solve those problems. It is a scam or fraud (the truth) itself (the composer).