THE outlook for the single-ownership apartment market that caters to expatriates in Bangkok remains positive, despite increased competition from rental units in condominiums, a consultant said.
The consultant, CBRE group pointed out that most expatriates in the country preferred to rent rather than buy property.
According to the Bangkok Post, the rental market is competitive for developers as the number of expats working in Bangkok is not growing, except for the Chinese.
However, most Chinese expats have smaller budgets compared to the Japanese, American and European tenants who have long been the source of demand for residential property in the city.
“Although expat tenant numbers and their rental budgets are not growing, there are still profitable opportunities for apartment developers despite increased competition from rental units in condos,” said Threerathorn Prapunpong, CBRE Thailand’s head of advisory and transaction services (residential leasing).
The firm pointed out that most expats preferred to live in locations between Asok and Thong Lor on Sukhumvit Road, Lumpini and part of Sathon.
The expats also preferred to rent in an apartment where one entity owns the whole building instead of a buy-to-rent investor and a condominium building with multiple owners.
In a condominium, the building’s property manager is responsible only for the management of the common areas and not for maintenance inside the units.
CBRE’s latest research revealed only 10,000 units of “expatriate standard” apartment buildings in downtown Bangkok while 80,000 multiple-ownership condominium units were in the preferred rental locations.
The firm estimates that 35 to 40 percent of the units are owned by buy-to-rent investors.
While the supply of condominiums continues to grow, the supply of new apartments was limited.
For landlords, the firm advises the optimisation of units by maximising the utility of space, high finishing standards and furnishing among others.
Theerathorn says there will not likely be a big increase in expat tenants or their housing budgets this year, but quality apartments can expect high rentals and occupancy.