Condominium prices in the Silom, Sathorn and Rama 3 areas of Bangkok are seeing annual growth of 7.8 percent, proving investors with yields of as much as 7.7 percent per annum.
Frank Khan (pictured), Executive Director, Head of Residential for Knight Frank Chartered (Thailand), said the area accounts up to 8 percent of total condominium supply in the Thai capital. He also expressed his view that limited supply of land will see prices continue to grow.
He explained that a tenant will typically enter into a one-year lease agreement for residential property in Bangkok. Usually, the shorter the term requested by the lessee, the higher the rental rate. Although one-bedroom units yielded higher average rental returns than two-bedroom units, the higher supply of one-bedrooms in the market causes more competition to lease out the residence.
A one-bedroom unit provides between 6.1 and 7.7 percent rental yields for investors, or rent of between THB18,000 and THB35,000 per month. Two-bedroom units provide a rental yield of between 6.3 and 6.8 percent, or rents between THB25,000 and THB50,000 per month. These yields are higher than those on offer in Malaysia and Singapore, Khan noted.
Khan added that he expects the emergence of the ASEAN Economic Community (AEC) will drive demand for business expansion and residences. Thanks to Thailand’s infrastructural readiness and strategic location, foreign investments from multinational companies are expected to grow. Economic activity from the potential flow of other AEC citizens will effectively boost economies around the region. With its many advantages, Thailand should see demand for residential property increase as a consequence of such business growth.
Recently Knight Frank Thailand held a private exhibition featuring Thailand property in Kuala Lumpur, with what the real estate firm described as a good response from foreign investors.
 |
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
Catch up on news you need to know from last week.
Overseas interest in Thailand property up in May
Call for property tax cuts
Record year for Khao Yai property
Stress test for Bangkok’s suburban property markets
If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg