Rents for expatriate standard apartments and condominiums are likely to rise for the first time in over 20 years, according to international property consultant CBRE Thailand.
“Since the early 1990’s, there has been very little increase in total amounts of rent paid by expatriates for their residential accommodation, but this looks like it is about to change,” said Mr. James Pitchon, Executive Director of CBRE Thailand who has covered the Bangkok residential leasing market for over 20 years. The number of expatriates has been growing, but the number of two- and three-bedroom condominium and apartment units has not been growing significantly.
Many expatriates are posted to Bangkok with their families.
They generally want to stay in a limited number of locations; Sukhumvit Soi’s 1-63/2-42, Lumpini and parts of Silom and Sathorn. These tenants need two or three bedroom units.
There have been very few new apartments single-ownership buildings built and although the condominium multi-ownership stock in the main areas preferred by expatriates has increased by almost 80% over the last five years, the majority of that new supply has been one-bedroom units.
CBRE believes the market is almost at the stage where there is becoming a shortage or at least a limited choice of expatriate standard apartments and condominiums in the preferred locations especially two- and three-bedroom units.
This means that for the first time in almost 20 years CBRE expects that expatriates are going to need larger lump sum housing allowances for their accommodation. The current occupancy in the most popular expatriate areas of apartments is over 90% and 70% for condominiums from owner occupiers and tenants.
There were around 65,000 expatriates with work permits in Bangkok
CBRE estimates that there are about 22,000 condominium units under construction in expatriate areas, but only about 30% of these will be two- or three-bedroom units with the rest being studios and one-bedroom units.
There were around 65,000 expatriates with work permits in Bangkok in Q2 2013, according to the Alien Occupational Control Division of the Department of Employment. This was an increase of 10% Y-o-Y and does not include diplomats or people with work permits for locations outside of Bangkok but living in Bangkok.