Chinese capital rushes to buy land to build factories, electric cars, batteries, charging stations, causing land prices to rise 2.3 times. Real estate groups recommend that the Bank of Thailand reduce interest rates and propose that the government issue real estate support measures to stimulate purchasing power.
Dr. Wichai Wiratkaphan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center, revealed that the change in the price of vacant land before development in the EEC area, consisting of Chonburi, Rayong, and Chachoengsao provinces, the index of vacant land price before development in the EEC area in the second quarter of 2024 had an index value of 281.5 points, an increase of 8.3 percent compared to the previous year. The growth of vacant land price before development continued to adjust upwards, but at a slower pace compared to the average increase of 5 years before the COVID-19 crisis because the private sector used less land due to the slow recovery of the
economy and investment.
In addition, negative factors such as the cancellation of the LTV relaxation measures, household debt exceeding 90 percent of GDP, the policy interest rate remaining at a high level of 2.50 percent, those who want to buy a house have more expenses but their ability to buy a house has decreased. These factors have caused the real estate sector to slow down significantly in the past. This may cause entrepreneurs to want to buy less land to accumulate because entrepreneurs will have to pay the cost of holding land from paying land and building taxes. In 2024, the government has no measures to reduce land and building taxes, which is another reason why the demand for land in the EEC area has slowed down. Most areas are still agricultural areas that are not suitable for developing into residential projects. While another area is an area that has been developed into an industrial estate.
For the index of vacant land prices before development in the EEC area in the second quarter of 2024, i
t increased because the price of vacant land in Rayong Province had an index value of 230.8 points, an increase of the highest at 22.9 percent due to Chinese capital coming in to buy land to build factories related to the electric vehicle industry, such as batteries, chargers in industrial estates in Rayong Province in large numbers, and there were groups of large electric vehicle manufacturers from China, such as BYD and Changan, who came to invest in the Rayong industrial estate, especially the Plaeng Daeng development estate, resulting in land prices increasing by approximately 2.3 times compared to 2015, which was the base year (100.0 points).
Investors prefer to invest in Rayong province more than Chonburi province because the land price in Rayong province is still around 30-40% lower than Chonburi province. Chonburi province has an index value of 332.0 points. The top 5 land prices with the highest increase are: 1.
Land in Ban Chang district in Rayong province, land price increased by 52.5%,
2. Land
in Klaeng district in Rayong province, land price increased
by 34.5% to develop housing projects,
3. Land in Bang Pakong district in Chachoengsao province, land price increased by 31.0%, people from Bangkok are more interested,
4. Land in Sattahip district in Chonburi province, land price increased by 26.8%,
5. Land in Nikhom Phatthana district in Rayong province, land price increased by 17.3%.
The top 5 land areas have received additional benefits from land use plans, which allow more land to be used in the area, which in turn increases the value of the land.
Dr. Wichai Wiratkaphan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center, Mr. Anawat Nawintham, Vice President of the Thai Condominium Association, and Mr. Premsorn Srivibulchai, Managing Director of VP Reap Estate Property Development, proposed that the BOT reduce the policy interest rate to reduce the burden of borrowing costs for both entrepreneurs and home buyers, find a way for financial insti
tutions to relax lending conditions to allow retail borrowers to borrow money to buy houses because the number of loan rejections is still high, extend the LTV period for down payments for buyers, attract home buyers to buy houses not exceeding 1.5 million baht from entrepreneurs who have received investment promotion from the BOI, and propose that the government seriously proceed with developing infrastructure in the EEC to build confidence with foreign investors and local people in the Eastern region.
Source: Thai News Agency