Bangkok rental business is under threat as consumers buy more condo units

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Rental apartment business at risk

Published: 12 Mar 2013 at 17.02
Online news: Local News

The apartment business is at risk as growing numbers of Thais move away from renting and instead want to buy condominium units, according to a new study released Tuesday by TMB Analytics.

The think tank, basing its study on statistics from the Bank of Thailand, found that the real estate industry is at high risk at present, as the proportion of non-performing loans (NPL) to total outstanding loans ratio at the end of 2012 was 5.4%.

Only the construction industry has a higher ratio than the apartment rental industry, which is about twice the national average for NPLs,

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boons
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Discussion 11 : 14 Mar 2013 at 18.4411
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If you price these apartments in Dollars, Euros or Yen -- they are getting more expensive every day. Not exactly a trend which will increase occupancy.
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Worzel
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Discussion 10 : 13 Mar 2013 at 18.5410
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If interest rates increase many local buyers will be unable to meet their monthly payments. The trend for smaller, cheaper and lower specified condos enabled a new buyer demographic to buy, aided by easy credit.

There does seem to be a risk that unless we experience a huge population growth in highly paid adults and a huge influx of expats then an over supply will develop.
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DonAleman
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Discussion 9 : 13 Mar 2013 at 08.129
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The developers,builders,advertising agencies plus govt. agencies which support "building,building,building" tout,in suspicious of owning a studio. Some years back a 'livable studio condo had 60 Sq.Mtrs. which then shrunk to 50 and now I live in 48 - new ones, in these "luxury" projects, ( not the ones you see on Tv ), are 31 0r even 26 S.M.- 26 is a walk in closet !
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nitnoi
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Discussion 8 : 13 Mar 2013 at 01.058
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Over built condos are problems here too. They target people over 50 then the over 50 move out of the region because they get old and can't stand cold climate. They move south. the condo built for buying turn to rental and when it rental tenants are care less about the place, when they behind in payment they vandalize the place before they leave. The owners might be able to sue them but who make money, lawyers.Head ache for landlords.
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naomi
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Discussion 7 : 13 Mar 2013 at 00.597
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Like my architect friend said to me, many of these apartments and condos are substandard in everyway and are soon-to-be Bangkok ghettos. Does Thailand have land reclaiming plans? It would be nice to bomb these buildings down now and recycle the concrete in the sea to make some land.
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naomi
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Discussion 6 : 13 Mar 2013 at 00.476
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Income disparities from potential buyers and apartment renters are far apart (class disparity).
Western and Asian living arrangements are different. Typically, Thai families "share the wealth" and children stay at parents' home until late 30's. Western families tend to let children fly the coop at 18 or so. Renters in Western countries are singles and working. Thai renters in Thailand are mixed with families and couples and are not full time workers.
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boons
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Discussion 5 : 13 Mar 2013 at 00.165
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I have lived in 4 different rental apartments in Thailand. All of them were built more than 5 years ago. All 4 were brand new. I was the first inhabitant in all 4. In other words, they sat vacant for years before I came along. And after I moved, they were immediately available for rent *again* on local real estate sites -- and years later are still available.

Keep building, Thailand! Nothing keeps my rent lower than an overabundance of desperate landlords.
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Bangon
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Discussion 4 : 12 Mar 2013 at 22.144
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Again a typical 'bubble'... Bangkok, the hub of empty condominions... Why? For the builders: 1 reason: Take advantage of the fools wanting to buy the expensive rabbit cages. For the buyers: 2 reasons: the 'buy now, pay later, make profit first' syndrom, and the unrealistic Chinese (sorry) mental of for sure I'm gonna rent it out for x,000 Baht a month and not '1.-' less or I lose money. And, put alltogether one single reason: plain, simple greed... What did the Lord Buddha say?
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onlyme
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Discussion 3 : 12 Mar 2013 at 20.203
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Worzel - the snakes, rats, burglars, floods, lack of sprinklers non foreign ownership appeals. Okay you have described half of Bangkok except the floods part. jacksprat, along with a larger percentage of the population than you may think just might not live in Bangkok and in turn enjoy much lower rent (costs)and, other than incompetence, few floods. Thank God I'm a country boy (thanks John Denver).
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Worzel
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Discussion 2 : 12 Mar 2013 at 19.232
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Disc 1 Jack, yep, the snakes, rats, burglars, floods, lack of sprinklers non foreign ownership appeals.

Regarding the article, any economic slow down would lead to less job security and more tenants (like London currently for Brits) and consequently the rents for apartments would come down and support a new level of tenant rather than be left vacant. Thai landlords don't get market forces and rents can in fact go down...
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