Land prices in Khon Kaen and Udon Thani are on the rise, up more than 30 per cent last year as many developers expand into these two strategically-located provinces. As more state funds are likely to be invested in the country’s infrastructure, some of the projects are located in the northeast, such as the double-track railroad connecting the northeast corridor with Bangkok, Laos and Vietnam in readiness for inter-country trade when ASEAN comes into effect.
Khon Kaen is one of the four major cities in Isaan and is a regional centre for education, financial institutions, government offices and transportation. It is located on the Khorat Plateau and is the region’s agricultural hub and known for supplying construction and service industry workers to Bangkok.
Khon Kaen was relatively unknown by foreign buyers until recently and the city of only 100,000 people has seen a sharp increase in demand for condos after it saw the market come alive around five years ago. It has accelerated ever since and in the period 2011-13, 6,802 condominium units were launched and 3,284 units last year.
Khon Kaen is home to a thriving university, which has seen a surge in enrolments of late. For now, many of the buyers of these condos are students or staff at the university who are full of aspirations for the future as a larger, richer middle class emerges in Thailand.
Strong demand has helped speed up sales of these condos as the province’s strong economic growth accelerated following the trend of investors to invest in the province. These firms include Sansiri, CP Land, Land & Houses and Supalai, which is in the single-family home business in the province.
Central Plaza Hotel Group, which is setting up a new budget hotel chain called COSI Hotels, will open its first in 2015 and plans are in place to have at least thirty operational by 2020. Another example is Supalai, a property developer with its core market in Bangkok, which is busily expanding into the new provincial markets of Ubon Ratchathani and Nakorn this year. The property developer will have the second largest exposure to provincial markets by the end of the year.
All of this expansion has caused land prices to surge and in Udon Thani they jumped by up to 100 per cent last year after the government revealed plans to lay a double-track railroad to the province that will link Bangkok to Laos and Vientiane. Udon Thani is set to become the gateway to Laos because it has the infrastructure to support local and foreign investors and, as a result, land prices have doubled to a million baht per rai.