Demand for lower-end rental condos sees big jump
Rental condos priced at under Bt15,000 a month are seeing over 20 per cent growth while there is a big drop in demand for rental units priced at above Bt25,000, an industry executive said.
Wathayut Thongphorm, managing director at Primo Service Solution, a subsidiary of Origin Property, said that the rental condominium market is growing in the price range of Bt10,000-Bt15,000 per month while condos in the range of Bt25,000 to Bt150,000 per month are seeing significant drop in customers.
“Rental condos priced lower than Bt15,000 per month are growing at over 20 per cent, especially in the BTS-MRT zones,” he said. “The reason behind this is financial institutions' loan-to-value regulations, which limit the loans granted to each buyer. When people cannot get loan to buy property, they go for rental options instead.”
“In contrast, luxury rental condos in the range of Bt25,000 to Bt150,000 per month are suffering from a drop in customers, as their main target groups are foreign travellers and executives of multinational companies, who are not able to enter Thailand at the moment due to the Covid-19 lockdown measures,” Wathayut added. “Sales of units in this sector have plummeted by more than 50 per cent, prompting some property owners to drop their prices by 20 to 30 per cent to attract other groups of customers.”
Wathayut said that an estimate of 40 condominium projects under its management showed that the return on investment (ROI) on condos in the range of Bt10,000-Bt15,000 per month could rise to 4-5 per cent in the second half of 2020, while the ROI of luxury condos could fall from 5 per cent to 3 per cent in the same period.
“It could be the second quarter of 2021 before foreigners are allowed into the country and this segment jumps back up again,” he said.
