The property market and residential demand in Thailand’s southern provinces could be dependent upon government investment in infrastructure projects, according to experts. This is because rubber prices, the South’s main economic driver, are falling.
The property market in Thailand’s largest southern provinces posted good 1st quarter numbers as the developer sentiment index increased, reports local media. The number of visitors going to residential projects also rose during this time. Both increases were attributed to a growth in export value, but sustaining the market cannot be reliant on only exports.
“The property market is now depending on the government’s megaprojects to boost the provincial economy and purchasing power,” says Sureeratana Luckananit, Senior Director of the Bank of Thailand’s Southern Regional Office, to the Bangkok Post.
As a whole, the property market in the South has been in a slump since 2014 with land allocation permits in the region having declined significantly. In 2014, there were 6,365 permits granted, but this shrank to 1,110 permits last year, shows data from the Real Estate Information Center.
The number of low-rise residential construction permits issued also declined in the past 2 years while housing transfers in Phuket, Songkhla and Surat Thani were all down last year. The only housing segment to show any promise was the condo market in Phuket where transfers increased by 18 per cent in 2016.
However, several planned infrastructure projects set for the region could help turn the market around, according to Siriwan Phongsermsuk, President of the Songkhla Real Estate Association.
The upcoming projects include a motorway between Hat Yai and Dan Nok immigration checkpoint in Sadao near the Thailand-Malaysia border and an A double-track rail from Surat Thani to Padang Besar. Construction on both of these will start in the coming years. In addition to this, there are plans for a new deep-sea port in the Chana district and an expansion of the Hat Yai airport.
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