Property investors and condo buyers from overseas are awaiting clarity on Eastern Economic Corridor (EEC) regulations that will allow 100% foreign property ownership, according to a property consultant.
Phattarachai Taweewong, senior manager at property consultant Colliers International Thailand's research department, said the draft EEC act that was approved earlier this year has boosted not only the industrial estate sector but also the residential market in three eastern provinces since last year.
"Foreign investors were very active in the first half after the EEC came closer to reality," he said. "When they learned that up to 100% foreign ownership in property in Chon Buri, Rayong and Chachoengsao will be allowed, they began seeking plots to develop projects."
During the first half of this year, two foreign investors asked Colliers to do a feasibility study of property development in Chon Buri. Both are waiting for clear EEC regulations that will allow foreign property ownership, as their projects will target foreign buyers.
One of them is a Singaporean developer that bought a 20-rai site in Sri Racha near J-Park, a Japanese-style community mall owned by Sahapattana. It plans to develop high-rise condo buildings with a total of 500 units and retail spaces worth a combined 5 billion baht.
The other is a Chinese developer based in a second-tier province in China. It acquired 50 rai of inland plots at a cost of 2 billion baht in Na Jomtien-Sattahip and plans to develop a residential project worth 5 billion baht, targeting Chinese and foreign buyers.
"It is still unclear whether the 100% foreign ownership will be applied to all areas in the three provinces or in specific locations, as [the ECC Office] is in the process of drafting a new city plan that will be completed within 12 months," Mr Phattarachai said. "As soon as that regulation is clear, investors will start development."
He said total foreign property ownership in EEC areas will also benefit existing condo supply of about 14,000 units in Pattaya that are completed but unsold.
"There are many foreign buyers waiting to buy condo units in Pattaya City, Wongamat, Khao Pratumnak and Naklua, but they have been unable to do so because the foreign quota is full at all projects," he said.
While the Thai buyer market is sluggish, developers in Pattaya can adjust strategy by renting out remaining condo units under the Thai quota to foreigners in long-term leases despite low returns on investment.
Mr Phattarachai said the draft EEC Act boosted land prices in industrial estates by more than 10% in the first half compared with the same period last year. Usual growth in land prices at industrial estates averages 5% a year.
Land prices outside industrial estate projects rose by 15%.