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The EEC Attractive Due to Demand Being Kicked up by Industrial Estates and University
05 āļ.āļ. 2020
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PLUS Finds Sriracha Area inside the EEC Attractive Due to Demand Being Kicked up by Industrial Estates and University
Plus Property, the full-service professional property and facility management agency, indicates residential properties within the EEC area were starting to look attractive, based on the findings from its survey of the property market in the area. The governmentâs laying down of policies for comprehensive development of the area and the involvement of the private sector in the promotion of âcommunity economiesâ are expected to positively contribute to growth in demand for residential properties.
The Sriracha area has been noted as being the most attractive; the area has good prospects owing to a dense population of some 8,000 Japanese expats, its proximity to industrial estates and its role as a congregation point for foreign personnel and executives. Demand in the area is also popped up by a famous university; condos priced between 3 and 6 million baht are now selling out.
Ms. Suwannee Mahanarongchai, Deputy Managing Director, Business Strategies and Asset Management, Plus Property Company Limited, the full-service professional property and facility management agency, revealed that the Eastern Economic Corridor (EEC) special economic zone is worth keeping an eye on, due to the abundance of industrial plants, tourist attractions and leading university in the area.
The EEC has a total population of 3.4 million people. The number of industrial plants has increased over the 5 years after the launch of the EEC. The inflow of Thai as well as foreign labour into the EEC has increase and this group of people has also taken up residency within the EEC area.
At the start of 2020, the government designated a âcommunity economiesâ policy that aims to reduce the number of low-income earners to zero within a span of 3 years. Said policy calls for effective and coordinated investment, disbursement of investment budgets and the immersive participation of the private sector. This means the EEC has the opportunity to become a highly potent market for residential properties, which will grow in tandem with the governmentâs economic push.
Based on surveying by Plus Propertyâs research and development division, the property market within the EEC area encompasses Chachoengsao, Bang Saen, Srii Racha, Pattaya, Sattahip and Rayong. This area can be subdivided into two groups.
The first group is categorised together due to relevance to universities and tourism, and includes Bang Saen, Sriracha, and Pattaya. The second group is categorised together owing to them possessing clusters of industrial plants, and includes Chachoengsao, Sattahip and Rayong.
PLUS found from the survey that the universiites and tourism groups were experiencing attractive growth, and this was especially true for Sriracha. Srirachaâs growth can be attributed to the fact that it possesses a high density of foreign residents, notably as many as 8,000 Japanese residents.
Sriracha is also situated relatively close to several industrial estates, and a hosted to Kasetsart Univeristy campus which generates number of new students every year. All these factors contribute to make the property market in Sriracha to stand out.
Based on PLUSâs survey, there were 7,072 units of residences inside the Sriracha zone at the start of 2019. Taken together, the properties were worth a combined 17,721 million baht. Condominiums make up the brunt of the said value; there were 3,470 units of condominiums on offer at the time, which were worth a combined 10,059 million baht.
This value has been decreasing as developers have been releasing units in their stock at existing projects. On average, the number of condominium units sold per month for the Sriracha zone is 2.97 units per project per month.
Existing units are expected to be sold off within about 16 months. The prices on offer generally falls into the range of 3.5 and 6 million baht, and the range of 6 to 15 million baht. These prices cater to the demands of foreign businesspersons who were being stationed at the industrial plants inside the EEC, as well as to Thai employees inside the EEC. Parents were also buying the condos to house their children who were studying at the Kasetsart campus.
There exist factors that will continue to support the growth of the condominium market in Sriracha. With regard to industrial plants, it has been noted that Sriracha is situated near Amata Nakorn industrial estate and Pinthong industrial park. Both of the two industrial estates had a large number of Japanese workers. Amata Nakorn had 514 industrial plants, 60.46% of which were Japanese operations. Pinthong park had 307 industrial plants, 74% of which were Japanese operations. The number of Japanese nationals residing in Sriracha has reached the point that the nickname âLittle Osakaâ has arisen to refer to the area.
Sriracha also stands to benefit from the policy to develop phases 3 and 4 of Laem Chabang Port, as well as Thai Oil Plc.âs 30-year extension of a land lease contract for the purpose of investment into clean energy projects. Thai Oil has 1,200 staff, who invariably possessed high purchasing power.
The aspect of education is also lending a support factor towards continued growth in Sriracha. In 2018, the number of new students at Kasetsart Universityâs Sriracha campus increased by 7.5% over 2017âs figure. All of the aforementioned factors present opportunities for a growth in demand over residential properties, especially condominiums.
Condo buyers in Sriracha have been found to focus their attention on projects situated along Sukhumvit Rd. and projects near Kasetsart University Sriracha Campus, as well as projects near the Thai Oil complex. There were more than 10 projects at these locations, and a multitude of prices were available.
The Bank of Thailand recently announced it was revising the criteria employed to regulate mortgages, specifically the part concerned with the Loan to Value (LTV) ratio. Plus Property views that the revision directly benefits home buyers, especially those who were buying their first property.
First home buyers would be able to secure a loan for the entire value of the property, plus an additional 10% for expenses deemed as being related to moving in or taking up residency at the property. This revision to the LTV rules is expected to spur buyers to make their purchase decision.
At the same time, the down payment percentage required for a first home that exceeded 10 million baht in value has been slashed to 10%, from 20% previously, and this is expected to provide a stimulation for the higher scale property market.
In regard to a relaxation of mortgaging rules for a buyerâs second home, PLUS views that there is currently a sizeable composition of real demand mixed in among the buyers of second homes. PLUS believes that a significant âunlockingâ of mortgages would come about if rules for the second home are revised in the same manner as those for the first home.
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Plus Property is a full-service professional real estate agency that provides comprehensive assistance in reselling/letting properties and the purchasing of second-hand condominium units. With more than 20 years of experience, PLUSâs team of quality professionals manages residential and commercial properties and also manages projectsâ sales and marketing, heeding to all types of demand. For additional information about our services, call 02 688 7555, or click here.
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