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Supply of apartment and condominium units increase

By on Dec 28, 2009 in Research, Residential

Bangkok Residential Leasing MarketView Q3 09 

Five apartment buildings were completed, with a total of 62 units. The total supply of apartments units was 11,151 increasing by 0.56% Q-o-Q and 4.5% Y-O-Y. The total number of condominium units in downtown Bangkok grew by 1.7% Q-o-Q and 14.1% Y-O-Y to a total of 61,522 units.

Grade A rents rose 1.5% Q-o-Q but were down 5.4% Y-O-Y from 414 THB in Q 2 2009 to 420 THB in Q2 2009.

We expect that around 348 new apartments will be completed by the end of 2009. In the same period we expect there to be around 4,845 new condominium units completed raising the total stock of downtown condominiums to 66,376.

Many purchasers of condominium units are “buy-to-rent” investors and the competition between apartments and condominiums for the expatriate rental market will increase.

Many of the new condominium units are small studio and one bedroom units, competition will be greatest for these unit types.

Tenants prefer new buildings and there is a constant turnover of expatriates. The buildings that will suffer will be older apartment buildings that have not been refurbished and older individual condominium units in buildings with outdated common areas and decoration and interiors that have not been refurbished.

In Q3 the number of expatriates holding work permits dropped to 104,267 from 145,493. This was due to the department of employment revising numbers to adhere to the Working Alien Act of 2008. The system for monitoring expatriate work permits was reviewed once before in 2001 with similar results, however rebounded quickly in 2002. We also contacted a number of local international schools in Bangkok who reported steady numbers of expatriate pupils, with no notable changes since Q2.

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