Thailand
Thailand: Land price surge slows for inner city
The rise in land prices eased in the second quarter after rising for nine consecutive quarters as developers have slowed purchasing in inner-city locations.
Surachet Kongcheep, managing director of Phoenix Property Development and Consultancy Co, said developers’ land purchases shifted to outer-city locations where land prices were lower.
“Developers are focusing on condo development in locations where land prices are not high to develop affordable units,” he said.
Mr Surachet said demand for affordable condos exceeds that for higher-priced units. Developers find selling condo units in the lower to mid-priced segment easier.
Affordable condos in outer-city areas are priced no higher than 3.5 million baht a unit or lower than 100,000 baht per square metre. In inner-city locations, new condo supply will be priced higher than 180,000 baht per sq m or above 6 million baht a unit, he said.
On Tuesday, the Real Estate Information Center (REIC) reported the price index of vacant land in Greater Bangkok in the second quarter of 2019 rose by 8.8% from the same period last year, the slowest growth since the fourth quarter of 2016.
The two fastest-growing locations remained Nakhon Pathom and Samut Sakhon, with year-on-year rises of 62.6% and 47.3%, respectively, the same rankings as the first quarter this year at 67.4% and 52.1%, respectively.
Vichai Viratkapan, REIC’s acting director-general, said the land price increase in Nakhon Pathom was mostly in Sam Phran, Phuttamonthon and Muang districts, where the Blue Line extension is planned.
In Samut Sakhon, the land price increase was mostly in Muang and Krathumban districts, where construction of a motorway from Bangkok to Wang Manow in Phetchaburi is planned.
Coming in third for highest year-on-year increase in the land price index in the second quarter were Bang Kruay, Bang Yai, Bang Bua Thong and Sai Noi districts in Nonthaburi, each with a rise of 45.8%.
They were followed by Bang Khen, Sai Mai, Don Muang and Lak Si districts, where the land price index rose by 40.5%.
The fifth highest increase was in Muang, Phra Pradaeng and Phra Samut Chedi districts in Samut Prakan, with a rise of 29.3%.
“The key driver for the increase in land prices in Samut Prakan was the opening of the Green Line’s extension from Bearing to Samut Prakan late last year,” said Mr Vichai.
He said the top five locations with the highest increase in the land price index last quarter suggest new residential developments expand to outer-city locations where land prices remain low.
Source: https://www.bangkokpost.com/business/1717611/land-price-surge-slows-for-inner-city