How EEC Affecting Pattaya Real Estate in 2023 - 2024

The Eastern Economic Corridor (EEC) will have a significant impact on Pattaya's real estate market from 2023 to 2024 as part of Thailand's economic development plan and has attracted a significant investment of 650 billion Thai baht. Pattaya is transitioning from a tourist destination to an industrial and residential real estate hub. Supported by reliable data, projections show an increase in property values, a surge in foreign investments, and upgrades in infrastructure. The investment community is becoming more diverse including both local business owners and international corporations. The Pattaya real estate market is expected to undergo a transformation during the period of 2023 and 2024, following the strategic direction of the EEC.

What is the Eastern Economic Corridor

The EEC is an initiative aimed at promoting economic expansion, fostering creativity and facilitating inclusive progress in the Eastern region of Thailand. Covering 3 provinces—Chonburi, Rayong and Chachoengsao—it primarily seeks to draw industries, promote tech progress and stimulate investments. The Eastern Special Development Zone Act is established to provide strong legal support to ensure the successful implementation of EEC. The execution of this initiative is overseen by two key bodies: the Eastern Economic Corridor Policy Committee, chaired by the Prime Minister and consisting of 14 relevant ministers; and the Eastern Economic Corridor Policy Office.

The EEC's primary goal is modernizing and fostering competition in manufacturing, smart tech, tourism, healthcare and farming. These efforts aim to establish Thailand as a global economic hub through enhanced infrastructure, efficient business and innovation. The core EEC infrastructure includes a high-speed train connecting 3 airports, U-Tapao International Airport Development Project, Eastern Aviation City, Map Ta Phut Industrial Port Development Project Phase 3, Laem Chabang Port Development Project Phase 3 and U-Tapao Aircraft Maintenance Center Project, as depicted in the following picture.

Financial Allocation for the EEC

With the aim of promoting economic growth and enhancing Thailand's infrastructure the Eastern Economic Corridor (EEC) has attracted a significant investment of 650 billion Thai baht. This capital injection operates under the purview of a government-private sector partnership (PPP), structured with a distribution ratio of 32:68. In this structure, the government invests 200 billion Thai baht, and the private sector contributes 450 billion Thai baht. As a result, the government anticipates a substantial return of 450 billion Thai baht.

The S-Curve Approach: Targeting 12 Industries

The EEC adopts the 'S-Curve' approach to advance twelve targeted industries, thus fostering long-term economic resilience and growth. These industries can be categorized into two segments:

• First S-Curve: Automotive, smart electronics, affluent medical & wellness tourism, agriculture & biotechnology, and food processing.
• New S-Curve: Robotics, aerospace & advanced logistics, biofuels & bio-chemicals, digital technology, national defense, medical hub, and personnel development & education.

The 7 Aspects of New Smart City Development Guidelines

The Eastern Economic Corridor (EEC) of Thailand has outlined New Smart City Development Guidelines centered around seven key pillars:

1. Smart Environment - Prioritizing clean air, water management and green spaces for balanced urban living.

2. Smart Economy - Nurturing growth through innovation, entrepreneurship and digital industries.

3. Smart Energy - Advancing sustainability via renewable sources, energy efficiency and smart grids.

4. Smart Governance - Enhancing transparency, efficiency and citizen engagement through technology.

5. Smart Living - Elevating well-being with healthcare, housing and digital services.

6. Smart Mobility - Building efficient, eco-friendly urban transportation systems.

7. Smart Citizens - Empowering through education, digital literacy and civic involvement.

International Collaborations and Investments

When it comes to public-private joint venture (PPP) projects, the EEC is open to international principles, specifically the concept of international bidding. This approach involves the issuance of a regulation (TOR) that is accessible to both domestic and foreign private entities for participation in the bidding process. For instance, the high-speed rail project is conducted as an international competition. Various foreign private companies, including those from China, Japan, France, Malaysia, Italy and South Korea have expressed interest in our transparent project. These companies have obtained joint venture documents. The stipulations of the joint venture contract are explicit: the partnership extends for 50 years following the contract's expiration. Afterward, all ownership reverts to the State Railway of Thailand (SRT).

Thailand's Investment Promotion and EEC laws establish equal opportunities for both Thai and foreign investors, striving to align with global standards.

1. The Investment Promotion and EEC laws ensure equitable advantages for both Thai and foreign investors.
2. Historically, Thailand's investment incentives were not as favorable as those offered by other nations. However, for the EEC initiative, our aim is to match global standards.
3. Investment benefits are guided by the principle of promoting new activities that contribute to national progress, without burdening taxpayers.
4. Reduction of personal income tax is a key strategy. A 17% personal income tax rate is introduced to attract skilled workers and professionals to choose Thailand as their preferred location.
5. A new type of visa for 10 years for foreign professionals.

Economic Reverberations: Job Creation and GDP Growth

The EEC's emphasis on attracting foreign direct investments will naturally lead to a greater expats  presence in Chon Buri, Rayong and Chacheongsao. Foreigners moving in will boost the real estate industry and local businesses and also create job opportunities with estimates over 500,000 employment positions will be available by 2025 primarily in advanced fields. And will boost Thailand's GDP and progress toward becoming a global economic hub in the future.

Pattaya Real Estate With EEC

The EEC's vision to transform into a global investment hub fuels an influx of expatriates and substantial foreign direct investments (FDIs) into Pattaya, elevating it as a sought-after destination for both top talent and investors, driving demand in both residential and commercial real estate.

Pattaya is often called the "Detroit of the East." Due to the EEC's emphasis on advanced automotive technologies and also drawing significant investments in this sector. This industrial growth is having a reciprocal effect on the real estate market, with a surge in demand for both residential accommodation for factory workers and commercial spaces for offices and suppliers.

Expansion of Commercial and Residential Infrastructure

As a response to the development momentum generated by the EEC, Pattaya is currently experiencing a surge in its infrastructure, notably marked by the emergence of shopping malls and condominium complexes. The presence of Terminal 21 in North Pattaya serves as a prime example of this commercial expansion, catering to both the expatriate community and the growing influx of tourists. In alignment with the robust demand from expatriate investors and professionals associated with the EEC; the real estate sector's developers are proactively constructing new condominiums and luxury properties. This proactive approach includes the growth of fresh residential zones featuring smart homes and essential amenities, thereby enhancing our ability to effectively cater to the requirements of our expatriate clientele.

How EEC Affects Property Prices in Pattaya 2023 - 2024

The EEC is influencing Pattaya's real estate landscape and causing property prices to shift due to an influx of skilled professionals, expats and investors. Pattaya, bringing about discernible shifts in property prices. The dynamics of the residential market depend on a number of factors. This includes the influx of foreigners as well. Both those who want to buy for living or buying for investment. Of course, these key players are very important in driving the market direction and driving the market towards change.

As we look into the future, the property prices between 2024 to 2026 seem to follow a clear upward trend. This is due to the completion of EEC development projects which are expected to boost the property valuations. The convergence of real estate and markets indicates a significant shift in Pattaya's property price dynamics.

Between 2020 and 2023, there has been a noticeable increase in property prices, especially in the median prices of condominiums and commercial property values. This trend suggests that the market is changing and is likely to continue transforming after the completion of EEC's upcoming projects.

For investors, this dynamic presents a strategic window of opportunity. The current valuation landscape offers an optimal moment for those keen on real estate investment aligning with the classic investment adage of 'buy low, sell high'. As the EEC's initiatives mature and its impact deepens projected escalations in property prices post-EEC completion further underline the potential for lucrative returns.

Pattaya's Job Growth and Real Estate Investment Potential Await!

The Eastern Economic Corridor (EEC) bears a few promises of generating more than 100,000 job opportunities in the smart automation, digital infrastructure, and health sectors. This moment is opportune for investors with the promise of steady rental earnings and the possibility of benefiting from increasing property prices. Last but not least, the EEC initiative goes beyond just increasing employment. It can determine the direction of the Pattaya real estate market through the collection of economic expansion and investment opportunities as well.

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