Thailand expatriates will be paying more for their property in Bangkok for the first time in 20 years, according to the latest research from real estate firm CBRE.
The firm reported that more than 90 percent of tenants who rent residential properties in Bangkok with rents of more than THB20,000 per month are expatriates. It revealed that most expatriates who come to work in Thailand prefer to rent a home rather than purchase a property.
The supply of standard expatriate apartments (single ownership buildings) has only grown slightly over the past ten years, according to CBRE, because of low yields.
The units in condominiums (multi-ownership) for rent are direct competitors of the apartments in the Bangkok residential leasing market. The firm estimated that between 30 percent and 40 percent of condominiums in the most popular expatriate areas have been bought by investors who want to rent them out. Some 60 percent of new condominiums (multi-ownership) under construction are one-bedroom units, while many expatriate tenants require two- and three-bedroom units.
More than 70 percent of CBRE’s residential leasing transactions have been for two-, three- and four-bedroom units.
CBRE believes that the stock of expatriate standard two-, three- and four-bedroom rental units is actually decreasing because some of the older condominiums are becoming less attractive to tenants due to poor maintenance and lack of much-needed refurbishment. The common areas and interiors in many old condominiums have not been renovated unlike in many apartments where the owner of the whole block has, in many cases, invested in refurbishing and upgrading the building.
At the same time the number of expatriates holding work permits in Bangkok has increased to 72,000, as at the second quarter of 2014, increasing by more than 10 percent year-on-year. This number excludes diplomats and expatriates possessing work permits in other provinces but actually living in Bangkok.
Typically, expatriates prefer to live in a number of limited areas. The majority choose to live in Sukhumvit between sois 1-63 and 2-42, Sathorn and Central Lumpini.
With the limited supply of two-, three- and four-bedroom units in apartments and condominiums available for rent in popular expatriate areas, rents for two-, three- and four-bedroom units have started to rise for the first time in twenty years, said CBRE.
Andrew Batt, International Group Editor of PropertyGuru Group wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
