Feb 26, 2013 | Comments 3
The provincial property market in Thailand is expected to expand by 20 to 30 percent annually over the next few years, reported the Bangkok Post. This rate is much higher than the estimate for Greater Bangkok, according to Kiatnakin Bank Plc (KK).
The four factors driving property growth in the provinces are regionalism, urbanisation, macroeconomic policy and infrastructure policy, according to Piyasak Manason, the vice president for economic and industrial research, strategy and organisation development at KK.
“Regionalism is within not only Thailand but all ASEAN (Association of Southeast Asian Nations) countries,” he said.
Many people are migrating to their province’s Muang district as a result of higher income and purchasing power, thanks to increased wages, according to Piyasak.
Government plans for high speed rail links in provincial areas is also fuelling growth in the property market.
The majority of the government’s THB2 trillion (US$66.9 billion) budget for infrastructure over the next seven years will be injected into Thailand’s rail network.
Provinces with high potential include Chiang Rai, Nong Khai, Mukdahan and Phitsanulok, according to Piyasak.
Udon Thani enjoyed the highest property growth in 2012, up by 50 percent from 2011, driven by local and Laotian demand.
The overall provincial market expanded by over 30 percent in 2012.
Provincial property market growth is driven by all housing sectors, including condominiums, low-rise houses, community malls and hotels, according to property expert Manop Bongsadadt.
“The provincial market has housing demand, as most people have cash on hand and are shifting to buy housing instead of land,” he said.
The provincial take-up rate for new city condominium units that will be completed from now until 2015 is very healthy, according to Surachet Kongcheep, a senior manager at Colliers International Thailand.
“Some people who own petrol stations or rubber plantations have cash and don’t want to invest outside their home towns, so they invest in condos in their provinces,” said Surachet.
As of January 31 2013, the highest take-up rate for new condos in Muang districts was in Khon Kaen (75 percent), followed by Chiang Mai (74 percent), Hat Yai in Songkhla (73 percent), Phuket (70 percent), Bang Saen in Chon Buri (64 percent), Rayong (55 percent) and Udon Thani (25 percent).
Housing demand and supply in Greater Bangkok will grow by 5.2 percent and 16.5 percent this year respectively, according to the Bangkok Post.