Rental rates of condominiums in Bangkok are facing continued pressure this year, as a greater number of newer units appear on the scene.
Research conducted by DTZ showed that in the final quarter of 2009, six projects with a total of 1,408 units were launched within Thailand’s Central Business District. The total number of project launches in 2009 reached to 5,726 – a 196 percent increase compared to the 1,938 units launched in 2008. Most of the new launches during the period were in the mid-tier range.
DTZ also reported an increase in demand among the newly launched projects, with average take-up rents reaching 60 to 70 percent.
The average capital values for condominiums also climbed 0.2 percent to THB 82,680 per square metre at the end of Q4 2009, and this up-trend is predicted to continue this year.
The average quarter-on-quarter rental rates for Grade A condominiums remained unchanged, at THB 457 per square metre a month during Q4, but incurred a 10.4 percent decline year-on-year.
Thailand Residential Associate Director Wilailak Kraisuwannasarn said, “Condominium rents will continue to face pressure from completed units being put onto the rental market. More than 2,000 condominium units are expected to be completed during the forthcoming quarter. This is on top of the competition from the apartment and serviced apartment sectors.”
She added that if the political situation in the country remains stable, coupled with greater economic certainty, Bangkok could also be an attractive alternative location for residential investors, who priced out the faster-rising markets in the region.