Land prices surge amid urban growth

ASIA: According to Bangkokpost recently stated Infrastructure, including a new expressway, urbanization driven by mass transit expansion, and market competition pushed Bangkok land prices up by as much as 75% in recent years.

Saenphin Sukhee, chief executive of residential developer Frasers Property Home (Thailand), said land prices in Bangkok continued to grow despite the pandemic with an average increase of 70-75% during 2020-22.

“The new expressway caused land prices to almost double,” he said. “In some locations such as Hathairat Road, the price more than tripled from 2-3 million baht per rai to 10 million baht after the completion of the expressway on Chatu Chot Road.”

According to the company’s land acquisition and business development departments, the new expressway pushed land prices in western Bangkok up by 81% on average, led by Rama 2-Bang Bon with a rise of 98%. Prices in Suksawat-Pracha Uthit grew by 63%.

Construction of infrastructure projects linking Bangkok to western provinces drove land prices in the Pin Klao-Ratchaphruek and Rattanathibet-Chaiyaphruek areas to grow 64-65%.

In Kaset-Ram Intra and Watcharapol-Sai Mai, land prices rose 60% and 44%, respectively, due to urbanization stemming from the expansion of the Pink Line mass transit.

Land prices in eastern Bangkok jumped by 92% on average as the competition among residential developers was high. The highest increase was in Ramkhamhaeng-On Nut which soared by 138%.

It was followed by Bang Na-Ring Road with an increase of 98% and Theparak-Bang Phli with a growth of 39%.

“Actual prices of land have risen beyond appraisal land prices,” Mr. Saenphin said. “Financial institutions cannot catch up with the rise. As a result, we got project loans lower than they should.”

The Real Estate Information Center (REIC) on Friday reported the price index of vacant land in Greater Bangkok in the fourth quarter of last year at 381.4 which was an increase of 34% from 284.7 in the same quarter of 2019.

Compared with the fourth quarter of 2021, it increased by 12.5% and rose by 3.4% from the third quarter of 2022.

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