Rayong residential market to see rebound in 2021

Rayong residential market to see rebound in 2021

Mr Premsorn says 80% of demand in Rayong was from those working in industrial estates.
Mr Premsorn says 80% of demand in Rayong was from those working in industrial estates.

The residential market in Rayong will improve next year, led by low-rise housing segment, while a recovery in Chon Buri is foreseeable in 2022, according to the Real Estate Information Center (REIC).

Vichai Viratkapan, REIC acting director-general, said new residential sales in Rayong in the second half of 2021 would total 2,525 units worth 6.14 billion baht, close to the five-year average for this period at 2,663 units.

The largest number of units being sold will be low-rise houses with 2,338 units worth 5.7 billion baht and the rest will be condo units.

"Our estimate is based on the assumption that there's no political demonstrations," he said. "If the government launches a stimulus package to boost the property market, the number of units sold will be higher."

Premsorn Sriviboonchai, president of the Rayong Real Estate Association, said more than 80% of residential demand in Rayong was from those working in industrial estates.

"In the first half, low-rise housing segment was good but the overall market was not," he said. "So was the industrial sector. Some industries were good but some were not."

He said housing demand from automotive factories was poor due to layoffs, while the petrochemical and energy segment was strong.

But as some workers at petrochemical factories were impacted, they are reluctant to book a unit.

"Low-rise housing market in Ban Chang and U-Tapao remains healthy," said Mr Premsorn. "But it is unpredictable how long it will be. It depends on consumer confidence."

In Chon Buri, new residential sales in the first half this year were quite positive with 7,260 units sold, which was slightly above the five half-year average, worth 25.43 billion baht, according to REIC. It improved from 6,270 units worth 20 billion baht in the second half last year.

However, REIC forecast a drop to 4,208 units worth 15.53 billion baht in the second half of 2020 due to the strong impact of the virus spread.

Although the number is expected to rise to 5,064 units and 5,702 units worth 17.35 and 19.54 billion baht in the first half and second half of 2021, respectively, those numbers are still much lower than five half-year average of 7,084 units.

"A sharp decline in the second half this year to the bottom is attributed to the economic slowdown," said Mr Vichai. "It will gradually improve next year but likely return to normal level in 2022."

Jugkarut Ruangratanakorn, managing director of Chon Buri-based property developer Ratanakorn Asset Co, Ltd, said property purchase among Thai people in tourist destinations like Pattaya had changed since Covid-19 hit the globe.

"Purchasing power of people working in the tourism sector in major destinations has shrunk. Hotel staff were either unemployed or must take leave without pay," he said.

"Many of them now receive an income on an hourly-basis as hotels do not open daily."

During three months of the lockdown, many hotel staff used up their savings or borrowed to survive.

After the restrictions were eased, their earning will focus on consumption and daily life, while postponing home purchase and opting to rent instead.

Meesak Chunharuckchot, president of the Chonburi Real Estate Association, said the Eastern Economic Corridor (EEC) can boost property market in Chon Buri, the same as the Eastern Seaboard did in the past.

"The impact from the trade war and the pandemic has affected exports of many industrial sectors. Those facing a heavy burden were blue collar, as seen from the slowdown in sales of townhouses priced between 1.5 and two million baht a unit."

Transportation networks and smart city development initiated by the EEC will also be able to drive the property market in Chon Buri, Rayong and Chachoengsao, he added.

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