Real estate agencies sell property so when one publishes research that raises questions about the strength of the market you need to take notice.
One Bangkok real estate firm, in its latest residential market report, has raised some significant questions about the future of the Bangkok property market, and especially regarding the actions of foreign buyers.
CBRE Thailand, in its MarketView report published today, noted the increasing number of Bangkok condominium sales to foreign buyers, especially Chinese buyers, during the second quarter.
It also reported that several projects have reached the foreign ownership quota – equal to 49 percent of sellable space – even prior to official launches.
ThailandProperty.News suspects these are “sales” to overseas real estate agencies who have guaranteed they will achieve a certain number of transactions.
For Bangkok condo market watchers, what CBRE said next is worth noting.
“The big question remains – will these foreign buyers transfer title of their purchased units, and who will live in them once construction finishes.”
The real estate firm said that most foreign buyers of Bangkok condos are investors, and it doubts they will live in the units they have purchased.
“The downtown expatriate rental market is not growing and the local rental market in the midtown/suburban areas is also quite flat.”
CBRE admitted the number of Thais paying more than THB 10,000 per month rental is minimal, and that the downtown rental market relies on demand from expatriates.
A lack of growth in expat rental demand combined with increasing supply means there will be little opportunity for rental growth, the real estate firm predicted.
With extensive experience of reporting Thailand’s property sector for more than 10 years, we believe CBRE is one of the more realistic agencies in terms of its research and reporting.