Bangkok’s expat rental trends changing
The number of Japanese expats in Thailand dropped to lower than 20% of the total expats in Thailand for the first time, dropping to 34,133 as of April 2019, a 4% decline year on year, according to CBRE.
CBRE are reporting a change in demand and an impact on the rental apartment sector in Bangkok, despite a healthy performance. Typically, they report, when expats move with their family members to work in Thailand, the companies will cover accommodation for the whole family, the children’s tuition fees and sometimes allowance for the housewives.
This year, CBRE report seeing more expats moving here individually rather than the whole family as companies look to lower their operating expenses.
Now, many apartments are fully occupied for their one-bedroom units and the demand is still increasing,” according to Theerathorn Prapunpong, Director of Advisory and Transaction Services – Residential Leasing, CBRE Thailand.
Another constraint on the rental apartment market is the accommodation allowance from corporates which has not increased in many years. This is putting pressure on landlords as they could not ask for higher monthly rental as that will risk giving away their tenants to landlords of other properties.
But the decrease in the number of Japanese expats is being compensated by the rise in the second biggest feeder market, the Chinese expats.
However, CBRE believes that this increase will not become a new wave of demand for Bangkok rental apartments as Chinese expats prefer to rent condominium units in the Huai Khwang and the Sutthisan areas where the costs are lower and the Chinese community is more prominent.
With increasing competition from condominium units for rent in the market, budget control for expats’ accommodation and the new land and building tax, the biggest hit will be felt by landlords of older apartment buildings who will be forced to up their game to compete in the market.
Rathawat Kuvijitrsuwan, Associate Director at Research and Consulting, CBRE Thailand
SOURCE: CBRE
