Vichai Viratkapan, acting director-general of the Real Estate Information Center. (Photo supplied)

Chinese investor demand for industrial land propelled Rayong's vacant land price index to the highest growth rate among the Eastern Economic Corridor (EEC) provinces in the second quarter of 2024.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said many Chinese investors acquired land in Rayong's industrial zones to build electric vehicle plants and related industries such as battery production.

"Major Chinese manufacturers such as BYD and Changan have invested in Rayong's industrial estates, particularly in the Nikhom Pattana and Pluak Daeng areas, causing land prices to surge 2.3 times compared with the base year of 2015," he said.

In the second quarter of 2024, the price index of vacant land in Rayong reached 230.8, marking a 22.9% year-on-year increase and a 31.6% quarter-on-quarter uptick.

Rayong dominated the top five districts in the EEC with the largest year-on-year land price increases. Ban Chang led with a 52.5% growth, followed by Klang at 34.5% and Nikhom Pattana at 17.3%, ranking first, second and fifth, respectively.

Mr Vichai said Ban Chang boasts various transport systems, including highways, eastern railways and U-tapao airport, making it suitable for residential development.

This has attracted both local and Bangkok-based developers to construct residential units in the area, capitalising on the demand from those working in industrial estates and the tourism sector.

The rise in Rayong's index contributed to an 8.3% growth in the overall EEC provinces' index, bringing it to 281.5. This marks the second consecutive increase since the first quarter, following a decline in the fourth quarter of last year.

The year-on-year land price index growth rates in the EEC over the past seven quarters have either been in single digits or negative, in contrast to the average quarterly increase of 14% seen during 2015-2019.

"The slowdown was likely due to developers reducing land purchases and development activity following the sluggish economy, lending restrictions, rising interest rates and high household debt, all of which have impacted housing demand," said Mr Vichai.

Buying land also incurs holding costs based on the land and building tax that took effect a few years ago.

The majority of land in the EEC is also zoned for agriculture, making it unsuitable for residential development, with some areas designated for industrial estates.

Among the EEC provinces, Chon Buri had the highest land price index at 332.0 in the second quarter of 2024, reflecting a 5% increase from the second quarter of 2023 but a 2.5% decline from the first quarter of 2024.

Chachoengsao's land price index stood at 203.5, representing a year-on-year decrease of 2.7% but an increase of 12.7% compared to the previous quarter.

The province's Bang Pakong district ranked third in the EEC for the largest year-on-year land price increases, at 31%. Its proximity to Samut Prakan attracted Bangkok-based developers to invest in the area, Mr Vichai added.