Luxury condo rentals in Thailand are in high demand for the first time in three years, primarily from long-term international residents and those affected by the Russia-Ukraine war. High-end condominiums in Bangkok are now renting for up to 100,000 baht per month.
If rentals begin to recover as the Covid-19 situation eases and people begin traveling abroad once more, according to Sunchai Kooakachai, director and head of research and consultation at Knight Frank Thailand, it would be a good indication for the condominium market. This is evident in Thailand, where there are more international tourists now than there were at the end of the previous year, along with foreign corporate staff and long-term foreign visitors.
The Russia-Ukraine war, particularly in Bangkok where there has been an influx of Russian tourists, has helped the condominium market rebound in part. The market for condo rentals has been stimulated by the rise in demand. Additionally, Sunchai predicted that as a result of China’s opening, a number of FIT (free independent travelers) would come to Thailand, which would boost the demand for condo rentals.
This is a chance to earn money by renting to foreigners, particularly in high-end condos in the central business district where foreigners are interested in remaining for longer periods of time (long-stay), driving up rental rates. For instance, during the Covid-19 period, the rent of a one-bedroom condo in the Lumpini, Sathon, and Silom regions next to a big department store decreased to 35,000 baht per month; but, the cost has since increased to 50,000 baht per month, on par with before the pandemic, Sunchai added.
Because there are so many hotels in Bangkok that can accommodate tourists, the leasing market for condominiums still has some restrictions. However, there are still groups of visitors that choose to travel independently and rent condos rather than use hotel services due to the higher cost. According to Sunchai, this pattern is intensifying, and the high demand is pushing up rental costs for condominiums.
Demand for condos in the 50,000–70,000–100,000 baht per month to 100,000 baht per month rental range has significantly increased recently. According to Sunchai, this clientele is well-heeled and specializes in leasing luxury condos.
Sunchai claims that there have been some improvements to the corporate employee-dominated rental market in the region between Asoke and Phra Khanong. The majority of the renters in this region are workers who commute into Bangkok, but because of the work-from-home legislation, some of them have left the city, making it challenging to entice them back to rent condos close to BTS stations for 20,000 baht per month.
Since most office workers now spend two days a week working from home and three days at the office, there is less of a need for condo rentals. Even if Covid-19 vanishes, there won’t be the same demand for rentals as there was previously.
Despite the restricted supply, prices for condos in the city center have not much increased. Renters’ purchasing power is still lower than it was prior to the Covid-19 economic crisis, therefore the Asoke-Phrom Phong area’s former 20,000 baht per month rental rate is now only 15,000 baht. However, according to Sunchai, condo rates in Bangkok’s central business district and other desirable districts have stabilized.
The typical rental market for corporate clients will need to draw in tourists to make up for the drop in staff renters, Sunchai noted.
He thinks that the resurgence of Chinese tourists will boost Bangkok’s condo rental market. The transition from renting to buying condos once more, which is anticipated to take 1-2 years, would occur.
The condo rental industry, according to Sunchai, will become a significant rival to Airbnb and 3–4-star hotels that are vying for FIT consumers as well as digital nomads or backpacker groups who can work remotely 90%–95% of the time. The majority of the people in this group are Europeans who enjoy staying for several months at a time.
According to Sunchai, the share of the Thai condo rental market that is currently dominated by nomads and local/foreign corporate employees would change from 70% local/foreign corporate employees to 30% nomad group (visitors who come to stay long-term and rent monthly).
