The provincial property market will expand by 20-30% annually over the next few years, much higher than the estimate for Greater Bangkok, says Kiatnakin Bank Plc (KK).
Piyasak Manason, the vice-president for economic and industrial research, strategy and organisation development, said the four factors driving property growth upcountry are regionalism, urbanisation, macroeconomic policy and infrastructure policy.
"Regionalism is within not only Thailand but all Asean countries," he told KK's annual seminar yesterday.
People are tending to shift to live in their province's Muang district, while their incomes and purchasing power are higher thanks to increased wages and rising prices of farm products.
The government's plan for high-speed train routes is also triggering property market growth upcountry.
Most of its infrastructure investment budget of 2 trillion baht over seven years will be put into the rail system.
Mr Piyasak said provinces with high potential include Chiang Rai, Nong Khai, Mukdahan and Phitsanulok.
Last year, Udon Thani enjoyed the highest property growth, up by 50% from 2011, driven by local and Laotian demand.
The overall provincial market grew by more than 30% last year.
The growth of upcountry markets is estimated from housing and project loans, Mr Piyasak said.
Property expert Prof Manop Bongsadadt of Chulalongkorn University said upcountry property market growth is driven by all sectors including condomoniums, low-rise houses, community malls and hotels.
"The provincial market has housing demand, as most people have cash on hand and are shifting to buy housing instead of land," he said.
Surachet Kongcheep, senior manager at the property consultant Colliers International Thailand, said the provincial take-up rate for new city condos that will be completed from this year to 2015 is very healthy
As of Jan 31, the highest take-up rate for new condos in Muang districts was in Khon Kaen (75%), followed by Chiang Mai (74%), Hat Yai in Songkhla (73%), Phuket (70%), Bang Saen in Chon Buri (64%), Rayong (55%) and Udon Thani (25%).
"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 Mr Surachet.
KK said in Greater Bangkok, housing demand and supply will grow by 5.2% and 16.5%, respectively.
It expects its project loans to grow by 19% this year.
Last year, outstanding loans for property projects totalled 20 billion baht or 11.8% of KK's total outstanding loans.
About 60% of these loans were for Greater Bangkok projects.
The average credit line was 300 million baht for a project value of 500 million.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter