Rents for apartments and condominiums aimed at high-earning expatriates are likely to rise significantly for the first time in more than 20 years, according to international property consultant CBRE Thailand.
The number of expatriates sent to work in Thailand is growing, but the number of two- and three-bedroom high-end condominium and apartment units has not increased significantly, risking a possible shortage in supply, the consultancy claimed, arguing that many expats are posted to Bangkok with their families, so need larger units.
According to CBRE, such expats generally want to stay in a limited number of locations including Sukhumvit Soi's one to 63 and two to 42, Lumpini and parts of Silom and Sathorn. Condominium stock in those areas has increased by almost 80 per cent over the last five years, but the majority of that new supply has been one-bedroom units.
The consultancy is warning that the market is almost at the stage where there is a shortage or at least a "limited choice" of high-end apartments and condominiums in those locations, especially in relation to two- and three-bedroom units, which could start to push up rents.
The current occupancy of apartments in the most popular expatriate areas is more than 90%, and more than 70% for condominiums.
The company estimates that there are about 22,000 condominium units under construction in these areas, but only about 30% of these will be two- or three-bedroom units with the rest being studios and one-bedroom units.
"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 James Pitchon, executive director of CBRE Thailand.
There were around 65,000 expats with work permits in Bangkok in the second quarter of 2013, according to the Alien Occupational Control Division of the Department of Employment. This represents a 10% year-on-year increase and does not include diplomats or people with work permits for locations outside of Bangkok but living in Bangkok.