EEC housing market crashes: It’s a real estate shake-up

Sales of residential units in the Eastern Economic Corridor (EEC) have taken a nosedive, particularly near industrial estates, following a wave of factory closures.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), pointed the finger at the shuttering of large factories since last year, which has severely impacted housing demand in Chon Buri and Rayong.

“New sales of condos and townhouses in industrial zones have fallen for two consecutive quarters, from the first to the second quarter of this year.”

In the second quarter of 2024, new residential unit sales across Chon Buri, Rayong, and Chachoengsao totalled just 5,132 units, valued at 16.8 billion baht, the lowest figures recorded since REIC began its quarterly surveys in early 2022. This represents a sharp decline from 6,563 units worth 21.7 billion baht in the first quarter, and 7,872 units worth 25.8 billion baht in the fourth quarter of 2023, which was the highest since early 2022.

By category, low-rise housing in Rayong faces the longest sell-out timeframe, projected at 29 months, assuming no new supply hits the market, thanks to a surplus of stock. This trend is particularly pronounced in the 2-3 million baht price range, especially in areas like Nikhom Amata City-Eastern, Nikhom Hemaraj, and Nikhom Map Ta Phut.

Nikhom Amata City-Eastern holds the largest supply of low-rise homes with 1,426 units available, but only 116 units were sold in the second quarter, resulting in a dismal absorption rate of 2.7% and an estimated 33.9 months to sell out.

Similarly, Nikhom Hemaraj and Nikhom Map Ta Phut had supplies of 1,093 and 1,065 units respectively, yet only 93 and 80 units were sold in the same period.

Chon Buri also mirrored this trend, with the largest inventory of low-rise homes priced between 2-3 million baht located near industrial estates. Notably, areas like Nikhom Pan Thong-Phanat Nikhom boasted 1,147 units, while Nikhom Amata Nakorn-Bypass had 1,119 units—but sales were just 129 and 84 units respectively in the second quarter.

The first half of 2024 has seen housing demand in the EEC dwindle, contrasting sharply with year-on-year price index increases of 3.3% and 8.3% for vacant land, fuelled by a surge of Chinese investors entering the electric vehicle sector, said Premsorn Sriviboonchai, managing director of Rayong-based developer VP Real Estate Property Development.

“The arrival of big names like BYD and Changan in Rayong hasn’t sparked a housing demand boost because they rely heavily on automation.”