The number of two- and three-bedroom units suitable for expatriate rentals in Bangkok is decreasing, according the new research.
CBRE Thailand, in its Bangkok Residential Marketview Q1 report revealed that more than 95 percent of tenants who rent residential properties in Bangkok with rents of more than THB 20,000 per month are expatriates. Most expatriates who come to work in Thailand prefer to rent a home for a limited number of years rather than purchase a property.
The real estate firm noted that the supply of standard expatriate apartments has only grown slightly over the past ten years. Only a few developers have built new apartments (single-ownership) over the past ten years because of low yields.
CBRE estimated that between 30-40 percent of condominiums in the most popular expatriate areas have been bought by investors who want to rent them out. Some 60 percent of multi-ownership condominiums under construction are one-bedroom units while many expatriate tenants require two- or three-bedroom units. A total of 72 percent of CBRE’s residential leasing transactions over the last two years have been for two- and three- bedroom units.
“CBRE believes that the stock of standard expatriate rental two- and three-bedroom 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 report said.
The number of expatriates holding work permits in Bangkok increased by 15 percent year-on-year, with 74,000 work permits issued at the end of Q4 2013. This number excludes diplomats and expatriates holding work permits in other provinces but actually living in Bangkok.
According to CBRE, expats 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- and three-bedroom units in apartments and condominiums available for rent in popular expatriate areas, rents for two- and three-bedroom units have started to rise for the first time in twenty years.” CBRE concluded.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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