Hi there. I have been working as a real estate agent in Bangkok since 2006. In that time I have seen some changes, but surprisingly very little has changed. Let me explain.

Bangkok Apartment Rental Prices 2008-2018

The rental prices of most apartment buildings have increased very marginally over the last 10 years. While a spacious 3-bedroom apartment in the Sukhumvit area would have cost 70,000 baht 10 years ago, today it can cost you 85,000 baht. That’s just a 20% increase in 10 years, actually much less than inflation, and in many ways an apartment is cheaper now than it was 10 years ago.

Why? Hard to say, but I guess ongoing political troubles, 2 coups, and a fairly stagnant economy that barely recovers around 3% GDP growth each year are the reasons. This level of growth may be acceptable for a world-leading developed nation, but for Thailand, which (let’s face it) still has a long way to go in terms of development, it’s not very good.

The apartment rental market in Bangkok is mainly governed by expats. Thais do not rent at these prices, or they do not earn enough, or they are sensitive enough to buy property in the suburbs, or they are part of the immensely wealthy elite and already own several blocks in the center of Bangkok. As the number of expats has remained fairly constant, so have rental prices.

Newly constructed condo buildings have seen an increase in rental prices, and there will always be a small percentage of people who have a sufficient budget and just want to live in a very new place, something is particularly true in the case of Japanese tenants. , but new buildings will get old. And once they have been built and a rental price has been set, you will notice that the price will remain relatively stagnant from then on.

This is the same with condos for sale. Once a building has finished construction, a selling price and a rental price are set, and it will remain stagnant at this level for years to come.

But the prices have been increasing in Bangkok, everyone knows it! So am I wrong?

Bangkok condo sales prices 2008-2018

I don’t think I was wrong. There are some condo buildings that have experienced a very good level of capital appreciation in recent years, but “on average” they have not.

Yes, prices have risen significantly in Bangkok, and this is something that all developers will gladly promote to you when they sell you their new project. They will show you charts with an upward trend in prices and show you that prices are increasing by at least 5-10% year over year.

Prices for new buildings have increased 5-10% year-on-year, but not finished buildings.

This is mainly due to increases in land prices. As land prices (and to some extent construction costs) rise, so do the costs of new buildings. So new buildings are getting more and more expensive, but are finished buildings following suit?

No. And that’s why I’m not wrong. A building that cost 150,000 baht / m2. 5 years ago, now there can only be 160,000 square baht – in this example, about 1.5% compound growth. This building was new 5 years ago, and a new building today still under construction could cost you 200,000 baht / m2. which is 33% more than what the new building was 5 years ago, hence the compound growth of 5% ++.

But the fact is, the building YOU bought 5 years ago may have increased by only 1.5% of composite per year.

This is the current trend with Bangkok properties. New buildings constantly set new price benchmarks and then remain the same. With even newer buildings adding a layer on top, setting new benchmarks and then staying on the same level. Even newer buildings, just keep adding another layer on top.

That is why you will find such a large price discrepancy between the buildings, even if they are located next to each other. An example would be Lumpini 24, a new condominium located on Sukhumvit Soi 24, where prices will reach 250,000 baht / m2. So a small 60 square meter 2 bedroom unit will cost around 15,000,000 baht.

Immediately next door is an older condo called President Park, where prices have been stagnant at around 60,000 baht / m2. So a very spacious 260 square meter 3 bedroom unit will cost you around 15,000,000 baht.

Four times bigger, located immediately next door, but at the same price! So the old adage “Location, location, location” doesn’t apply here. It is ONLY based on the age of the building.

Below is an example of a newer building for sale, 275 m2. asking for 80,000,000 baht: http://www.property-bangkok.com/viewproperty.asp?id=587

Below is an example of an old building for sale in a similar location, 366 m2. asking for 21,000,000 baht: http://www.bangkokcondo.org/viewproperty.asp?id=614

Yes, the new condo is much nicer, has a better design and a newer lobby and gleaming facilities. But is the price variation fully justified? I mean, 4 times the price!

Considering that the interior of the new condo will age and need to be replaced, and if you bought in the older building, you can update the interior to have it all new.

In any case, whether you buy in the new condo or in an old building, you are not here or there, the main problem that arises in this article is that the prices of the new projects may have increased considerably, but once have invested in your condo unit, it may not achieve the same level of growth that the developer directed you to achieve.

The only people who are really experiencing great capital growth are landowners. And these are mostly Thais already very wealthy as non-Thais cannot own land. It does not help the majority of non-wealthy Thais who are still struggling financially.

Office rental prices have also remained fairly static. Over the past 10 years, office rental prices have increased marginally, similar to apartment buildings. However, as most investors (both Thai and foreign) seem obsessed with condominium buildings, the price of office space for sale has also remained fairly static, with office units for sale arguably offering the best option for rental profitability, since office leases are normally a minimum of 3 years, and you don’t need to renovate the office space like you would a condo, since the first requires a coat of whitewashed paint, the second furniture new, new bathrooms, new kitchen, etc.

This is not to say that it is a bad idea to invest in real estate in Bangkok. But you need to consider office space and commercial properties as well as residential ones, and you need to consider the building very carefully, as I mentioned earlier, some condo buildings have seen good growth in the last 10 years, while most have not. .

You need to have a good eye. Best of luck!