Chiang Rai to Experience More Condo Development

 

CHIANG RAI – Poomipak Julmanichoto, Managing Director of Plus Property Company Limited, has reported that Thailand’s border regions have have an influx of property developers keen to invest in condominiums and hotels. The real estate boom in the border towns has been led by the increasing trade and investment activity, in anticipation of the forthcoming Asean Economic Community (AEC).

After Thailand set up special economic zones (SEZs) to promote trade and investment on the border, the value of trade cross- border trade with neighboring countries (Cambodia, Myanmar, Laos and Malaysia) has gone up to around 900 billion baht in 2014. It is expected to grow to more than 1 trillion baht this year.

Poomipak Julmanichoto, said that the company had conducted a survey during 2013-14 and found that the border property market has expanded aggressively especially in the segments of condominiums.

“Local people have more income due to government’s promotion and their lifestyle has become more urban. Some of them look for small rooms to rent to save their money, and the others buy condominium units for investment,” he said.

According to his company’s survey, there is a high demand for condominiums in Chiang Rai, then Pisanulok, Udon Thani and Hat Yai. The lesser known property developers can sell around 20 units per month, while the well-known ones can sell 40-50 units per month. The projects, which are priced lower than 60,000 baht per square metre tend to sell out quickly.

Anupong Asavabhokin, chief executive officer at Asian Property Development (AP), said that the property in the border provinces would see a huge growth this year, particularly Khon Kaen, Udon Thani and Nakhon Ratchasima in the Northeast region because of investment from the large property developers such as Land and Houses, Prueksa Real Estate, Sansiri, AP and Quality House.

“Condominium has become a flagship segment to penetrate the market in these provinces, mainly due to the changing consumers’ lifestyles. Demand in each province has come from different groups such as we target at university students in Khon Kaen but target at investors from Laos in Udon Thani,” he said.

A surge of land price in each region

The land price has risen by 20-40 per cent in Tak province, which is a gateway to Myanmar. It is also near Chiang Rai Province, which has a cross border bridge to Laos and Southern China. The land price went up after the government announced setting up of a special economic zone in this area.

Therdsak Chinsoranan, mayor of Mae Sod district, Tak province, said that the special economic zone would create an economic activity of more than 10 billion baht for local people and would also attract property developers to invest.

“In Mae Sod, there are currently around 20-30 hotel projects under the construction. Retail giant like Tesco Lotus are also opening branch here,” he said.

The land in Amphoe Chiang San and Amphoe Chiang Kong, the gateway from the north of Thailand to Laos, has surged by 10-20 per cent to 3-5 million baht per rai. Most investors have bought the land in this area for hotels, resorts and guesthouses business.

In the northeastern region, Nakhon Panom is the main destination for cross border traders and investors. After the Thailand-Laos Friendship Bridge was inaugurated, the province’s economy has grown from 5 billion baht to 10-15 billion baht; the land price has doubled.

Nakhon Panom aims to be a gateway for traders, so it has allocated the budget of 60 million baht to set up a warehouse and distribution hub for transferring goods between Thailand and Laos.

Similarly, the Amphoe Hat Yai, Songkla province is emerging as a gateway to Malaysia. Land price in Hat Yai has risen 30 per cent over the last two years due to high demand from property developers. Currently, the price of some land in the centre of Hat Yai is about 160 million baht per rai.

Surachai Jitpakdibodin, chairman of Songkla’s Chamber of Commerce, said that the government is planning to build a new Thailand-Malaysia border crossing point, motorway from Sadao to Hat Yai, double track railway and express electric train from Bangkok to Padang Besar.

However, the report from Real Estate Information Centre stated that the property in the cross border provinces has rapidly grown and it resulted in an incredible surge of the land price. It gave the notice that this could lead to the land price’s speculation and the bubble economy in the end.