Thailand Property Report by Dawn Ferguson With housing allowances in the range of Bt70,000
Thailand Property Report by Dawn Ferguson
With housing allowances in the range of Bt70,000
to Bt100,000 a month, Bangkoks high-paid
expatriates have money to burn - and they want
homes with all the Western-amenities theyre
accustomed too.
For condominium and apartment owners, this
segment of the market is a potential gold mine,
particularly given most of these expects are here
on a short-term basis. The statistics certainly
are promising, but as competition grows, its not
an easy market to enter.
CB Richard Ellis Thailand executive director
James Pitchon told Property Report Thailand that
demand for high-end rentals increased in 2006 and
the number of expatriates in Bangkok with work
permits grew to 67,412 in 2006, a 12.5 - as the so-called land of the
rising sun is the largest foreign direct
investor in Thailand.
Pitchon noted that the rental market is in
actuality even higher, as those numbers exclude
diplomats and agencies such as the United Natio .
They also exclude foreigners without work
permits, but Pitchon says they co ider most of
these to be part of the retiree market, who
traditionally buy their units.
The good news is that demand increased. Last
year there was only a limited amount of new
su ly in apartments, and there were only about
330 units completed last year. But the number of
condominium units grew by over 4,000 units. That
will continue to be the case in the next two to
three years, he said, but added this figure
excluded serviced apartments, which are
co idered a very different product somewhere
in between a hotel and an apartment. Many now
have a hotel lice e, so theyre operating on a
more short-term basis.
From a su ly point of view, the big question is,
how many of these apartments are expat quality,
and how many owners of these new condominiums
will want to lease them out? asks Pitchon.
Recently a new su ly has a eared in the
downtown area, and theres been a greater focus
on small sized units, many of them aimed at the
Thai market, so not all the new condo su ly will
be of a standard that a eals to expats, but
there are a lot of condo units.
Pitchon says the proportion of owner occupation
and units purchased by people on a buy-to-lease
basis varies from building to building: Of the
developments that are just coming up to
completion, the number that will be available for
rent ranges between 30-50% at the moment. So,
although demand has risen, there will be quite a
lot of condominium su ly coming on.
This mea that competition is going to be tight
in the coming year. Generally, expats given the
choice would prefer a single ownership apartment,
says Pitchon, because the owner is able to
service all their requirements whereas in a condo
the owner might not even be in Thailand. And in
many cases the owner has not put in place a local
manager to look after his apartment. So the
challenge for condominium owners who have bought
to lease out is how to manage their units because
tenants will have questio .
So if the air conditioner breaks down, whos
going to fix it? It will not be the staff looking
after the common areas of the condominium,
because their re o ibility is not private
property. So owners must think about how they
will manage and maintain the units.
This includes implementing pest control contracts,
regular A/C maintenance contracts, and, most
importantly, there has to be a clear
understanding between the owner and the tenant of
whos re o ible for doing what.
The most popular area for expats is still
Sukhumvit, followed by Central Lumpini and the
Sathorn area. There are two satellites, one being
around the International School of Bangkok and
there is also a smaller cluster around Bangkok
Pattana School. As for the up-and-coming
riverside, currently there is limited demand from
expatriate tenants, generally because of acce
i ues. A small segment of expats are heading to
other areas, such as Thonglor. Again youve got
acce to the skytrain but in a slightly lower
de ity environment, said Pitchon.
The expat rental market is driven generally by
housing allowances granted to employees and
employees generally end all of their allowances,
but not put their own money in. The biggest
change in the market has been that Japanese with
families now receive higher allowances than they
did previously, says Pitchon. Some will give
Bt70,000 or Bt75,000 for a three-bedroom
apartment. The Japanese tend to be at the lower
end of the market but they are a significant
level of demand.
Whats ha ened is that much of the existing
stock is over 10 years old. Weve seen very few
apartments built since the financial crisis over
the last 10 years, more condominiums, and what
has been ha ening is that new su ly, with
smaller units, is actually getting higher rents
because it looks better. Modern design.
As for housing rentals, Pitchon says the market
is small because there a limited su ly of homes
in central areas, including in the Sukhumvit area.
Sa iri on 67 had rented well, but there is a
limited market for people with over Bt100,000 a
month to end, he said. There are few
companies that pay that kind of housing allowance.
As for two-tiered pricing for Thais and
Foreigners, there really i t a Thai rental
market. Given that Thais have the freedom to buy
and sell what they choose, unlike foreigners,
those with high salaries and incomes just wont
go out and rent 75,000 a month apartments. So
there is no Thai market above Bt15,000 a month.
The rental market is efficient in terms of
tra arent pricing, information on products and
a regular turnover, said Pitchon. So if a
building doe t maintain its standards, then new
expats will not move in.
The article is refered from http://www.bbcok.com, http://www.worldloanpro.com, please go to read more.
With housing allowances in the range of Bt70,000
to Bt100,000 a month, Bangkoks high-paid
expatriates have money to burn - and they want
homes with all the Western-amenities theyre
accustomed too.
For condominium and apartment owners, this
segment of the market is a potential gold mine,
particularly given most of these expects are here
on a short-term basis. The statistics certainly
are promising, but as competition grows, its not
an easy market to enter.
CB Richard Ellis Thailand executive director
James Pitchon told Property Report Thailand that
demand for high-end rentals increased in 2006 and
the number of expatriates in Bangkok with work
permits grew to 67,412 in 2006, a 12.5 - as the so-called land of the
rising sun is the largest foreign direct
investor in Thailand.
Pitchon noted that the rental market is in
actuality even higher, as those numbers exclude
diplomats and agencies such as the United Natio .
They also exclude foreigners without work
permits, but Pitchon says they co ider most of
these to be part of the retiree market, who
traditionally buy their units.
The good news is that demand increased. Last
year there was only a limited amount of new
su ly in apartments, and there were only about
330 units completed last year. But the number of
condominium units grew by over 4,000 units. That
will continue to be the case in the next two to
three years, he said, but added this figure
excluded serviced apartments, which are
co idered a very different product somewhere
in between a hotel and an apartment. Many now
have a hotel lice e, so theyre operating on a
more short-term basis.
From a su ly point of view, the big question is,
how many of these apartments are expat quality,
and how many owners of these new condominiums
will want to lease them out? asks Pitchon.
Recently a new su ly has a eared in the
downtown area, and theres been a greater focus
on small sized units, many of them aimed at the
Thai market, so not all the new condo su ly will
be of a standard that a eals to expats, but
there are a lot of condo units.
Pitchon says the proportion of owner occupation
and units purchased by people on a buy-to-lease
basis varies from building to building: Of the
developments that are just coming up to
completion, the number that will be available for
rent ranges between 30-50% at the moment. So,
although demand has risen, there will be quite a
lot of condominium su ly coming on.
This mea that competition is going to be tight
in the coming year. Generally, expats given the
choice would prefer a single ownership apartment,
says Pitchon, because the owner is able to
service all their requirements whereas in a condo
the owner might not even be in Thailand. And in
many cases the owner has not put in place a local
manager to look after his apartment. So the
challenge for condominium owners who have bought
to lease out is how to manage their units because
tenants will have questio .
So if the air conditioner breaks down, whos
going to fix it? It will not be the staff looking
after the common areas of the condominium,
because their re o ibility is not private
property. So owners must think about how they
will manage and maintain the units.
This includes implementing pest control contracts,
regular A/C maintenance contracts, and, most
importantly, there has to be a clear
understanding between the owner and the tenant of
whos re o ible for doing what.
The most popular area for expats is still
Sukhumvit, followed by Central Lumpini and the
Sathorn area. There are two satellites, one being
around the International School of Bangkok and
there is also a smaller cluster around Bangkok
Pattana School. As for the up-and-coming
riverside, currently there is limited demand from
expatriate tenants, generally because of acce
i ues. A small segment of expats are heading to
other areas, such as Thonglor. Again youve got
acce to the skytrain but in a slightly lower
de ity environment, said Pitchon.
The expat rental market is driven generally by
housing allowances granted to employees and
employees generally end all of their allowances,
but not put their own money in. The biggest
change in the market has been that Japanese with
families now receive higher allowances than they
did previously, says Pitchon. Some will give
Bt70,000 or Bt75,000 for a three-bedroom
apartment. The Japanese tend to be at the lower
end of the market but they are a significant
level of demand.
Whats ha ened is that much of the existing
stock is over 10 years old. Weve seen very few
apartments built since the financial crisis over
the last 10 years, more condominiums, and what
has been ha ening is that new su ly, with
smaller units, is actually getting higher rents
because it looks better. Modern design.
As for housing rentals, Pitchon says the market
is small because there a limited su ly of homes
in central areas, including in the Sukhumvit area.
Sa iri on 67 had rented well, but there is a
limited market for people with over Bt100,000 a
month to end, he said. There are few
companies that pay that kind of housing allowance.
As for two-tiered pricing for Thais and
Foreigners, there really i t a Thai rental
market. Given that Thais have the freedom to buy
and sell what they choose, unlike foreigners,
those with high salaries and incomes just wont
go out and rent 75,000 a month apartments. So
there is no Thai market above Bt15,000 a month.
The rental market is efficient in terms of
tra arent pricing, information on products and
a regular turnover, said Pitchon. So if a
building doe t maintain its standards, then new
expats will not move in.
The article is refered from http://www.bbcok.com, http://www.worldloanpro.com, please go to read more.
