Buying a Condo in Bangkok for Investment

There is a great amount of debate on this subject right now and a great many opinions. Personally, as I will show in the next few articles in the coming week, opinions from any of us are likely as valid as any of those that come from the experts and commentators on this subject.

                             

I guess the first question should be, is the Bangkok condo sales market heading for a period of overheating, overbuilding oversupplying, call it what you will. Potentially yes, this is a danger for any such developing nation’s capital city and I have to say from my first hand experience there are a few red flags out there the could stop this bullish market.

To dive into this any further and in any great detail we would have to take each market sector as a totally separate market entity as from what I see they are all suffering slightly or very different fates. For example, right now the very low end of the market, say under 1.5m baht condos aimed at the indigenous market, seems to be doing very well and I see little evidence of swathes of empty rooms.

Not so for the medium and higher ends of the market. I will name no names, but in recent outings to towers in Thong Lor, Ekamai and Onnut I have found a great many rooms unsold and or unoccupied. In one new tower in Ekamai I have seen a range of condos on sale from around 4 Million to 20 million perhaps 60% sold only. Of the remaining ones sold hardly any had been rented.

And here lies a potential issue. I have found that a great many of these condos have been bought out by single investors who buy 10-20 at a time if not more. These units will often remain empty as the owners have no time not true intention or inclination to let their new condos out to the market, leaving some new towers perhaps 50% occupied or less.

Of course by holding them in this manner, they are falsifying the Bangkok Condo Rental stats as a whole, as perhaps thus encouraging further new developments to crop up and up as we feel there are not enough room available to fill the gap in supply. Should even 50% of these types come onto the rental market we could see an overstocked situation right away.

And here ends the first piece of guidance. Is the future Bangkok Condo rental market secure enough? Will you always be able to rent you condo for say 11 months a year minimum to gain the ROI you bought it for? Or will it as so many do, stay empty for at least a third of the year?

In my next piece I will write in more depth about the best sector of the rental market at present and how I believe it will evolve in the next few years and beyond.