The future of the Bangkok Condo Rental market

I have been living and working in Thailand since 1998, many of those years working in the Bangkok condo rental and sales market for a great many of them. In those years I have seen a very clear downturn in rental values, or perhaps I should say in market demographics. No longer are the mid-range properties renting as they used to be. But why?

Ten years ago when I moved back to Bangkok after some time away, things had not changed much in the condo rental & sales market. Overseas buyers were still buying condos and renting them out and the norm of this was that they were buying condos for between 6 - 9 million Baht and then renting them at 35-50K per month. These were fairly easy to rent out back then as there was still a very healthy number of expats in well paid employment positions.

Today however there are less and less expats here in those high paid positions. As Thailand has developed, more and more Thai people are able to do the jobs themselves now, and normally they will be on lower salaries than the expats used to be. This of course means the market place of people looking to rent a condo for 35-50K a month has shrunk significantly.

In the more recent years this has shrunk again and now it is much less common to find many people looking over even 25K a month at all. This is not going to change any time soon, indeed it may never change as more and more Thai people become the rental clients for agents with budgets of between 6 and 15K a month in general. There are some occasions where people are indeed looking up to 25K as a working couple or family, but again this is becoming less and less common.

So looking to the future, this is going to be a continuing trend and until the average wage here reaches the needed levels, many of those 35-50K a month executive condos will remain empty or very hard to rent at best. As Bangkok continues to grow, as slowly as it is, into more and more significant business hub in SE Asia, the more and more Thai people will leave the countryside and move to city jobs.

With this influx of new clients comes a new influx of tenants to let your property to. But those clients will be the lower paid office workers, secretaries and similar perhaps on salaries of 15 – 25K a month and thus unlikely to be considering condos at much more and 8 or 9K per month.

The conclusion is that with this shift away from overpaid expats to the much lower paid indigenous population will come investors being well advised to buy the very small new condos now being built and sold at around 1.2m Baht. If previously you were thinking to buy a condo for 8 million and rent it for 45K a month, you would now be well advised to buy 7 condos at 1.2m Baht, each renting for around 7K per month. The income will be similar but more crucially your chances of having regular tenancy will have just increased many times over.