Bangkok land prices expected to head upwards
Date：2016/12/26
Published: 22 Dec 2016 at 06:30
NEWSPAPER SECTION: Business | WRITER: Kanana Katharangsiporn
[Bangkok Post] Despite the postponement of the land and buildings tax for one year, Bangkok's overall land prices are expected to rise by 10-30% in 2017, driving the average prices of condos in Greater Bangkok to increase by 6-7%, with the highest growth anticipated in inner-city areas.
Nalinrat Chareonsuphong, managing director of property consultant Nexus Property Marketing Co, said the average rise in land prices in 2017 would be higher than that between 2015-2016 when they rose 5-10%.
"The average rise in land prices this year has cooled down compared to the incredible rises in 2015," she said. "There were no new record highs in Bangkok land prices this year after they hit 1.91 million baht per square wah last year."
A new high record is likely to be made next year if a plot on Wireless Road owned by the British embassy is sold. It is not far from the highest-priced-per-square-wah plot located on Chidlom Road, bought by SC Asset Corporation Plc.
Scarcity of land and rising land prices will result in the inner city area seeing the highest increase in condo prices next year at 9-10%, Mrs Nalinrat said.
"Average prices of new condo supply launched in Bangkok this year have soared quite high as they were driven by 2015 land costs," she said.
Average prices of the condo this year rose 14% to 121,000 baht per square metre from 106,000 baht per sq m in 2015. This rise was higher than an average increase of 8% per year during the past five years.
Developers should be careful when investing in land plots in outer Bangkok to develop condo project as target buyers may not be able to not afford the prices. The selling price of the condo in outer Bangkok should not be higher than 100,000 baht per sq m.
According to the company's research, the new condo supply launched in Bangkok this year totalled around 40,000 units from 94 projects, a 25% decrease from 53,000 units launched last year.
There were around 5,000 units that some developers earlier planned to launch in the fourth quarter this year but postponed to launch in the first quarter next year due to the mourning period.
Despite the postponed launches, 70% of the new supply was launched in the second half, showing developers' confidence in property market growth in Bangkok, she added.
The locations for the greatest number of new condo launches were Phra Khanong and Suan Luang with 10,700 units, Phaya Thai and Ratchadaphisek with 9,200 units and Ngamwongwan and Tiwanon with 6,900 units.
The outstanding condo supply in Greater Bangkok was 487,000 units. Of this amount, 438,000 units were sold which accounted for 90%.
The number of unsold units totalled around 48,000, down from 54,000 units as of last year.
Property consultant CBRE yesterday reported an increase of 4.7% in asking prices of off-plan high-end condos in downtown Bangkok this year to 219,000 baht per sq m on average.
CBRE sees a continued appetite for projects located in Bangkok's prime residential areas with affluent buyers focused on Sukhumvit, Sathorn and Central Lumpini.
CBRE expects both luxury condo and luxury low-rise housing sectors in Bangkok to outperform mid- to lower-end projects over 2017, with buyers less affected by difficulties in obtaining mortgages cooling wider residential market.