Despite increased competition from rental units in condominiums, the prospects for the single ownership apartment market in the prime areas of Bangkok are still positive, according to CBRE, an international property consultant company.
Most expatriates working in Bangkok rent rather than buy a property, CBRE said.
The expatriate rental market is competitive because the number of foreign nationals working in Bangkok is not growing.
The only nationality where numbers are growing are Chinese, and generally most Chinese expats have much lower housing budgets than Japanese, American and European tenants who have been the traditional source of demand for central Bangkok residential rental property, the company explained.
Based on more than 3,000 residential rental transactions over the last 10 years completed by CBRE, rental budgets have not grown, with the median monthly rental of around Bt90,000 for a three-bedroom unit and Bt80,000 for two-bedroom units.
CBRE focuses on the upper end of the market, so these numbers are higher than the average achieved rents for the whole of the expatriate rental market.
Most expats only want to live in a limited number of locations, with the preferred areas being between Asoke and Thonglor on Sukhumvit Road, Lumpini and parts of Sathorn.
The choice for most expats is to rent in an apartment where one entity owns the whole building, or from an individual buy-to-rent investor in a multi-ownership condominium building.
Based on the latest survey by CBRE Research, there are only around 10,000 units in expatriate standard single-ownership apartment buildings in downtown Bangkok.
By comparison, there are 80,000 condominiums in the same preferred expat rental locations and CBRE estimates that 35-40 per cent of these units are owned by buy-to-rent investors.
There is limited new apartment supply, but continued growth in condominium supply.