Bangkok, in the opinions of many market-watchers, currently offers a potentially lucrative property investment opportunity, although as with all investments buyers should do their due diligence and ensure they are comfortable with their purchase.
What are some of the attractive reasons to buy in Bangkok?
Record prices.
Record-breaking prices were also witnessed in Q3 2014 when CBRE sold a unit at Raimon Land’s 185 Rajdamri development, a project which was completed in Q1 2014, for around THB330,000 per sqm. The firm also sold units at more than THB300,000 per sqm in four other projects.
High numbers of expat tenants.
More than 90 percent of residential tenants in Bangkok with rents in excess of THB20,000 per month are expatriates, and the most recent figures showed that at the end of Q3 2014 there were some 74,000 holders of work permits in Bangkok, a rise of more than 7 percent in the turbulent previous 12 months.
A preference for renting.
The majority of expatriates who work in Thailand prefer to rent rather than purchase property because they are usually only in the city for a few years.
Lack of finance opportunities.
It’s almost impossible for expatriates, even with a solid credit record and work permit, to obtain finance at competitive rates from Thai banks to purchase property in the country. That’s another reason why renting is preferred to buying.
Buy as big as you can.
CBRE predicted that between 30 percent and 40 percent of purchases made at new condominium units in Bangkok during Q3 were made by buy-to-rent investors, with 70 percent of units under construction in downtown Bangkok being one-bedroom units or smaller. Highlighting a significant mismatch in supply and demand, CBRE noted it has seen strong demand for two- and three-bedroom units – with two-bed units are bigger making up a massive 75 percent of its leasing business. It said demand us starting to exceed supply in the bigger-unit.
Join the queue.
For the first time, several agencies have acknowledged the existence of waiting lists at some of the most popular developments in central Bangkok – underlining how the best developments are in demand and are commanding premium prices.
Rates are likely to rise.
Because demand will exceed supply, rental rates that have remained at the same levels for almost 25 years will finally have to rise
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
