The reputation has been told for a long time that Sriracha is the Little Osaka. Most recently, “Suwannee Mahanarongchai”, executive of Plus Property Company Limited, a subsidiary of Sansiri, revealed that this is because Japanese people have come to work in factories in various industrial estates
in mid-to-senior management positions, staying on a temporary basis according to their work rotations, which means strong purchasing power, with a dense population of more than 8,000 people
Rapidly covering the fundamentals: Sriracha is a location in the EEC zone, the Eastern Economic Corridor, comprising 3 provinces: “Chonburi-Rayong-Chachoengsao”, with a resident population of 3.4 million
Dense with employment sources, namely industrial estates and related factories, educational institutions both Thai and international, and world-class tourist destinations with Pattaya as the main magnet
The Thai government's EEC promotion policy remains a hope for enormous budgets to be invested in infrastructure across air-sea-rail-road systems and to stimulate the economy in 2020
Plus focuses on locations in fine detail. The real estate market can be divided into 2 main groups: 1. University and tourism locations “Bangsaen-Sriracha-Pattaya” 2. Factory locations “Chachoengsao-Sattahip-Rayong”
Focusing specifically on the Sriracha market, at the beginning of 2019 there were 7,072 residential units in total, worth 17,721 million baht, with condominiums making up the largest share at 49%, offering 3,470 units for sale, worth 10,059 million baht
In terms of sales velocity, some agencies call it the absorption rate in this zone, standing at 2.97 units/project/month, and it is expected to sell out within 16 months
Selling prices come in two ranges: 3.5-6 million baht and 6-15 million baht, meeting the needs of foreign businesspeople working in factories or expats, Thai customers, and parents buying for their school-age children
Sriracha has geographical advantages, located near the Amata City-Pinthong industrial estates. “Amata City” has 514 factories, of which 60.46% are Japanese factories, while “Pinthong” has 307 factories, of which 74% are Japanese
Turning back to Thai purchasing power, it was found that Thai Oil Public Company Limited has just extended a land lease agreement to invest in clean energy for the next 30 years, with 1,200 employees. The purchasing power of the energy business must be said to be truly impressive
In addition, the campus of Kasetsart University Sriracha is also located here. The number of students and university workers increases every year.
In conclusion, we see the purchasing power of foreign and Thai customers in Sriracha. We also see the LTV (loan-to-value) criteria, the Bank of Thailand’s measure requiring a higher down payment for loans to purchase a second residential property.
Most recently, the Bank of Thailand has just relaxed the LTV rules: loans for a first home can now be up to 110%, and homes priced over 10 million baht, which previously required a 20% down payment, now only require 10%.
But “Suwanee” said that purchasing a second residential property has become buying behavior of real demand, because people who own a first home have relocated for work or study and therefore need to purchase an additional residence.
Therefore, if the LTV conditions can be adjusted so that loans can be applied for just like a first home, it would significantly unlock purchasing power.
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