Surprisingly perhaps, more than 90 percent of Bangkok tenants renting residential property in the THB 20,000 per month price bracket and above are expatritaes.
It its latest market research, CBRE Thailand said the reason for this is because most expats working in Thailand prefer to rent as opposed to buying property, with the main reasons being the fact they are usually only here for a short time, and obtaining finance for an outright purchase is difficult to say the least.
This, the agency said, makes buying less attractive for this demographic.
The number of expatriates holding work permits in the Bangkok Metropolitan area saw another quarter-on-quarter increase and now stands at 79,395 at the end of the second quarter, according to government statistics. This number was up 10 percent on the previous quarter, but excludes diplomats and expats with work permits elsewhere in Thailand but physically living in Bangkok.
CBRE said that typically, expats prefer to live in just a limited number of locations in Bangkok. It said the majority choose to live on Sukhumvit between Soi 1 and 63, and between 2 and 42. Sathorn and the central Lumpini areas are also popular with expats in Bangkok is said.
The supply of standard expat apartments (single ownership buildings) has grown marginally over the last 10-years of low yields that makes it a less attractive for developers to build new apartments in this sector.
Condominium units (multi-ownership) where individual owners are buy-to-rent investors and are in direct competition with apartment for expatriate rental business.
CBRE’s research found that 70 percent of condominium units under construction in the downtown areas are either one-bedroom units or smaller, yet it said there is strong rental demand for two- and three-bedroom units which account for 75 percent of CBRE’s leasing deals.
The real estate firm said it had seen rental asking prices per sqm increase across all of the most preferred areas, and that was mainly due to refurbishment of older buildings, However it added that lump sum rents have increased very little for almost 25 years
To read the full CBRE Bangkok Marketview Q2 2015 Residential research report click here.