Land prices to continue to rise in Bangkok

[webfact]

Land prices to continue to rise in Bangkok
The Nation

BANGKOK: -- Despite the current political turmoil, the demand for prime land in Bangkok's central business district for investment remains robust, according to CBRE.

The real-estate services firm does not expect the political problems to have an adverse impact on CBD prices because there is a limited supply of freehold prime land in central Bangkok.

There are few willing sellers and most is held by cash-rich owners who inherited their family land. Landholding expenses are very low as most land was not acquired through debt financing. There is virtually no landholding tax and no inheritance tax. This means most landowners have very little pressure to sell. Transactions normally occur when the potential vendors are sufficiently enticed with a record-breaking offer price.

Over recent years, land prices have been driven upwards by developers buying sites to build condominiums for sale. This is because condo developers have been able to outbid other types of property developers because of the high margins and quick project turnover.

Historically, land investment in Bangkok's CBD has provided one of the highest investment returns, with about 15-per-cent year-on-year increases over recent years. This has enticed wealthy families to buy land and construct income-producing developments despite low initial income yields because they are attracted by the capital gain driven by land values.

Kulwadee Sawangsri, head of investment and land services at CBRE Thailand, said the price for a prime site on Sukhumvit Road had increased by about 480 per cent since 2002 to Bt1.5 million per square wah (Bt375,000 per square metre), the highest percentage increase of all of Bangkok's prime areas. This is followed by the Silom/Sathorn area, with an increase of about 400 per cent to Bt1.4 million per square wah, and the Ploenchit/Lumpini area at about 320 per cent to Bt1.5 million per square wah.

There have been significant land-price increases in some suburban areas where construction of new mass-transit lines has triggered an increase in demand for condominium sites in areas such as Rathanathibet along the Purple Line route. Rathanathibet prices have increased by 30-50 per cent per year since the start of construction on the transit route. CBRE expects that expansion of the mass-transit system will have similar effects on land prices in other suburban areas.

CBRE believes that the centre of Bangkok will continue to be the most sought-after location for the best-quality offices, hotels, shopping centres and residences. This means there will be continued demand in the future for the limited number of prime development sites in the CBD.

"Prime CBD sites in Bangkok remain in high demand. Currently, vendors are asking future prices for their land, as there is no pressure to sell. I believe that the land market will remain active this year if vendors are willing to deal at the current market prices," Kulwadee said.


-- The Nation 2014-02-11

[chiang mai]

Real Estate agent tells us that land prices are rising, I'm surprised they would suggest such a thing!

[noitom]

Real Estate agent tells us that land prices are rising, I'm surprised they would suggest such a thing!

And they are now touting the 15% year on year return.

[noitom]

The only way forward for Bangkok and Thailand is a heavy real estate tax on property, land, condos, buildings..etc, and a large parking fee within a perimeter of Bangkok.

[Ricardo]

Perhaps Bangkok should be renamed Swampy, after the airport, in view of its sinking into the seas ?

And farangs should be permitted to buy the land, before it's gone forever, or wasn't that already the Big Boss's idea, for the land behind his super-barrage ?

[quagmirefg]

Beware of the Land Price Bubble.

Thailand has yet to experience the price bubble that occured in most of the world recently.

With all the present Risk Factors currently facing Thailand, the Bubble may be about to Burst.

High demand inner city prime retail location prices will most likely remain high compared to other areas.

But they too may fall a bit if other areas experience a signifiant collapse of land and housing prices.

Bangkok proper is not as desirable as it was due to overcrowding. Prices to live in Bangkok are getting too expensive for the average Thai and even foreigners to live of visit.

Transportation time and costs have significantly increased.

In a nutshell; Bangkok is not as desirable as it once was.

Other areas of Thailand, near Bangkok or in other areas will continue to grow faster than inner City Bangkok becsause it is more affordable and less congested.

Thus making these new areas more desirable.

just my 2 baht's worth

Edited February 11, 2014 by quagmirefg

[jalansanitwong]

Perhaps Bangkok should be renamed Swampy, after the airport, in view of its sinking into the seas ?

And farangs should be permitted to buy the land, before it's gone forever, or wasn't that already the Big Boss's idea, for the land behind his super-barrage ?

Bangkok is not going to flood anytime soon. The Chinese are buying up everything overseas including Australia.

The big risk for real-estate in Thailand is a civil war and pollution along coastal areas.

You wouldnt of thought it possible several years ago but now its an option.

[noitom]

Risks of Bangkok. Future tax, floods, security, rising crime, corruption, incompetence, construction defects, fire, political. Why bother? Why do prices keep going up? Next greater fool.

[chiang mai]

Perhaps Bangkok should be renamed Swampy, after the airport, in view of its sinking into the seas ?

And farangs should be permitted to buy the land, before it's gone forever, or wasn't that already the Big Boss's idea, for the land behind his super-barrage ?

Bangkok is not going to flood anytime soon. The Chinese are buying up everything overseas including Australia.

The big risk for real-estate in Thailand is a civil war and pollution along coastal areas.

You wouldnt of thought it possible several years ago but now its an option.

"Bangkok is not going to flood anytime soon". They said the same about London, until yesterday!

As for pollution, it's far worse in the northern region than in the coastal areas, the coast is clear by comparison during burning season (Feb-April).

Finally civil war, not a chance!

[lucjoker]

Nong Palai (10 km from Pattaya center) for 1 rai in 2007 -800 000 bht ,now 2,5 milj to 4 milj .

Maprachan lake (dark side) for 1 rai in 2007 about 1 milj ,now 8 milj up !

So why putting money on a bank ?

[Pib]

Not to imply the CBRE press release is BS, but real estate prices are always rising in an up market and a great buy now in a down market "according to Real Estate Companies." They always put a positive spin on their propaganda press releases. I will add that there is a LOT of home and business construction occurring all over the place over here in western Bangkok/Phuttamathom/Salaya...like the new Central Salaya Mall scheduled to open mid year. Plus with several BTS extensions nearing completion well into western Bangkok and Nonthaburi (basically the west side of the Chao Phraya River) this little part of the world is indeed growing fast.

[rotary]

I predict 1997 will happen again as history repeats

[Pib]

I predict 1997 will happen again as history repeats

No doubt history seems to repeat itself...the problem is you don't know when that repeat will occur....next year or a 100 years from now.

[tingtongteesood]

The only way forward for Bangkok and Thailand is a heavy real estate tax on property, land, condos, buildings..etc, and a large parking fee within a perimeter of Bangkok.

Let me guess, you don't live in Bangkok, right ? How would you like it if YOUR property was heavily taxed and YOU had to pay a large parking fee ? I bet you would complain then...

[khunPer]

Beware of the Land Price Bubble.

Thailand has yet to experience the price bubble that occured in most of the world recently.

With all the present Risk Factors currently facing Thailand, the Bubble may be about to Burst.

High demand inner city prime retail location prices will most likely remain high compared to other areas.

But they too may fall a bit if other areas experience a signifiant collapse of land and housing prices.

Bangkok proper is not as desirable as it was due to overcrowding. Prices to live in Bangkok are getting too expensive for the average Thai and even foreigners to live of visit.

Transportation time and costs have significantly increased.

In a nutshell; Bangkok is not as desirable as it once was.

Other areas of Thailand, near Bangkok or in other areas will continue to grow faster than inner City Bangkok becsause it is more affordable and less congested.

Thus making these new areas more desirable.

just my 2 baht's worth

So many warnings about “bubbles”…

The interesting thing is, what was the average land price per square wah or square meter in Bangkok at 1997 just before the “bubble burst“?

We know the price today, some 16-17 years later, from the article above – but how long time did it take to recover the market after 1997?

[DrTuner]

1.5M for one tw ? A normal 100tw plot for a single house would then be 150M baht, I guess you don't see much of those. Bloody expensive.

Just for comparison, 100tw would probably cost you around 3M in the middle of Pattaya. I think I'd rather take the 50 plots here.

[Pib]

The only way forward for Bangkok and Thailand is a heavy real estate tax on property, land, condos, buildings..etc, and a large parking fee within a perimeter of Bangkok.

Let me guess, you don't live in Bangkok, right ? How would you like it if YOUR property was heavily taxed and YOU had to pay a large parking fee ? I bet you would complain then...

I think a lot of people who only visit/live in the central/highrise part of Bangkok (the place that is indeed a traffic and parking nightmare) think the whole city is like that. Heck, over here in western Bangkok there are few highrises (and they are only around 10 stories), plenty of open space. The Bangkok city limits cover a LARGE area (and I'm not talking the surrounding provinces like Nonthaburi that border Bangkok and is sometimes considered part of greater Bangkok) and much of it is still pretty open...not crazy 24/7 with traffic like central Bangkok.

[chiang mai]

Nothing unique about what's happening to Bangkok prices globally:

Australia: http://www.housepricecrash.co.uk/forum/index.php?showtopic=196660

UK: http://www.telegraph.co.uk/finance/personalfinance/houseprices/10621722/House-prices-the-chart-that-hints-at-leap-in-values.html

US: http://www.bloomberg.com/news/2014-01-28/home-prices-in-20-u-s-cities-rise-by-most-in-almost-eight-years.html