Research from CBRE’s Bangkok Residential Report Q3 shows that expatriates continue to dominate the city’s high-end rental market. The report added that more than 90 percent of tenants who rent residential properties in Bangkok that have rents of more than THB20,000 per month are expats, according to CBRE’s report.
Expats continue to prefer to live in a limited number of neighborhoods in Bangkok with areas along Sukhumvit being the most popular place to reside. Lower and middle Sukhumvit Road, Sathorn and Central Lumpini are the top spots for expats as these areas offer easy access to the BTS skytrain as well as a large number of malls and restaurants, CBRE research noted.
Expats in Thailand choose to rent rather than purchase property for a number of reasons and this is a trend that looks set to continue. CBRE stated that expats are turned off by Thailand’s complicated mortgage process and are likely to only be here for a few years which makes buying a property less desirable.
The number of expatriates holding work permits in Bangkok has increased by nearly nine percent year-on-year. However, the supply of apartments has not followed this trend. In the past ten years, the supply of standard expatriate apartments has only grown a little bit as developers are not interested in the low yields these projects often bring, CBRE reported. The biggest competition for apartments in Bangkok come from condominium units, where individual owners are buy-to-rent investors who market their units directly to renters.
CBRE researched showed that the number of new condominiums coming on to the market grew much faster than new apartments with an estimated 30 to 40 percent of units in downtown condominiums having been purchased by investors hoping to rent them out. Several apartments have been renovated recently as they hope to be better able to compete with the rising supply of condominium units.
The average asking rent per sqm. for apartments decreased in the third quarter of this year, according to CBRE. A lot of apartment owners find that it is taking longer to fill the vacant units and having been offering prospective tenants specials prices and packages to help entice renters to move in.
Image: Shama Sukhumvit Bangkok
