Downtown Bangkok rents for apartments, defined as being single ownership, multi-family buildings, rose by just 1 percent in the year ending September 2017.
Despite this, demand in the sector remained strong with occupancy standing at a reported 96.2 percent.
This news, from the latest research report published by real estate agency CBRE, will not come as welcome news for buy-to-let investors in the downtown Bangkok property market.
According to the real estate firm, the supply of apartments was 10,600 units, a drop of 5 percent year-on-year due to the firm’s revision of the downtown Bangkok area, as well as the removal of some apartments that are under renovation or have closed.
The Sukhumvit area remained the most popular location for expatriates, and apartment units in this area accounted for almost 80 percent of the total downtown Bangkok supply basket.
Future supply of expatriate apartments is very limited, CBRE said. There are just 400 future apartment units under construction and being planned.
The number of expatriates holding work permits in Bangkok increased by 0.3 percent quarter-on-quarter and 1.3 percent year-on-year.
The number stood at 85,832 at the end Q3 2017, with Chinese nationals accounting for 14 percent (the second largest nationality in terms of number of work permits).
Japanese nationals remained the largest, accounting for 22 percent.
According to CBRE, Chinese nationals typically have much lower housing budgets and do not form a significant level of demand in the traditional expatriate areas.
The average asking rental rates for Grade ‘A’ apartments in downtown Bangkok was THB 456 per sqm per month at the end of Q3, an increase of 1 percent year-on-year.
Central Lumpini and Siam area continued to have the highest achieved average rental rates, with Grade ‘A’ rents of THB 481 per sqm per month.
CBRE concluded by saying: “There is growing competition from units for rent in multi-ownership condominium buildings in the most popular expatriate areas.”