Strong prospects for Bangkok apartments despite expat decline

As expatriates’ housing budgets sink, opportunities stand solid for single-ownership apartment developers in the Thai capital

High-rise apartments in Bangkok. WitthayuP

The outlook for the single-ownership apartment rental market in the prime areas of Bangkok remains positive, CBRE Thailand reported in a note issued yesterday.

Apartment buildings owned by one entity still enjoy sanguine prospects amid rising competition between such properties and multi-ownership condominium buildings. Compounding the problem, expatriate housing budgets are decreasing in the Thai capital.

“Although expatriate tenant numbers and their rental budgets are not growing, there are still profitable opportunities for apartment developers despite increased competition from rental units in condominiums,” said Theerathorn Prapunpong, head of advisory and transaction services – residential leasing at CBRE Thailand.

The number of expatriates working in Bangkok is stagnating, CBRE research revealed. The only exceptions are the Chinese whose housing budgets are reportedly lower than the city’s traditional international tenants: Japanese, Americans and Europeans.

Housing budgets have not kept pace with the median monthly residential rental price, which has risen to THB90,000 (USD2,800) for a three-bedroom unit and THB80,000 for a two-bedroom unit. This is based on an analysis of over 3,000 upscale rental transactions over the last 10 years conducted by CBRE Thailand.

While the populace of expat tenants and their housing budgets are not expected to rebound soon, top-quality apartment developments are still expected to fetch high rental prices and occupancy rates going into 2019, said Theerathorn.

New apartment supply is currently limited in Bangkok. Around 10,000 units are available in single-ownership apartment buildings located in downtown areas preferred by expatriates, versus 80,000 condominium units, of which up to 40 percent are owned by buy-to-rent investors.

These expat-preferred locations cover the stretch between Asoke and Thonglor along Sukhumvit Road, the Lumpini area, and parts of Sathorn.