Suvarnabhumi » Land price rises near SuvarnabhumiSunday, July 20th, 2008
Land around Suvarnabhumi remains hot, with prices surging beyond the average 4% increase in Greater Bangkok during 2005-06, according to the Agency for Real Estate Affairs.
Land prices around the airport rose 6% during the period due to improving facilities and the government’s planned transport links.
The agency anticipates land prices in Greater Bangkok would rise only 3.1% next year due to the unfavourable economic conditions this year.
The prices of land near Suvarnabhumi have risen by around 47% since 1998, compared to 29.7% for plots in Bangkok.
Sopon Pornchokchai, the agency’s president, said land prices in Greater Bangkok rose 5.6% on average in 2003 and 2004 and 5.8% in 2004 and 2005. The pace, however, has slowed to 4% in 2005 and 2006 due to the overall economic climate.
Mr Sopon said the plots where prices had gained the most in the area, or 7%, were on King Kaew Road to the west of the new airport, where residential units are allowed. The most expensive plots, however, are at Bang Na Km 3 to Km 4, at 140,000 baht per square wah.
”Residential development has the highest potential in the airport’s immediate vicinity. Other segments such as hotels and shopping complexes will face tough competition from facilities in the airport.”
Meanwhile, the prices of land in Don Muang remained high, up 5-6%, as the area will be quieter and less busy once Suvarnabhumi opens. Besides, a new government centre and the Red Line mass-transit route are also in the pipeline. Therefore, the residential segment will have the highest potential while hotels and golf courses will be negatively affected by the airport relocation.
”Some hotels have already been renovated into serviced apartments while golf courses have started seeking long-term customers,” he said.
In addition to the area around Suvarnabhumi, land near the subway route had the biggest increase in prices, up 10% year-on-year, while plots close to the BTS skytrain also increased by 8% on average.
The prices of land near future mass-transit routes also shot up, especially in Bang Sue and the areas near the Purple Line and the Airport link, which have the highest development prospects.
The most expensive land in Bangkok is in the Siam Square area, at 640,000 baht per square wah. In addition to its proximity to the skytrain, the area has potential to be developed into commercial projects capable of yielding a 12% annual return.
The second most expensive area is in Yaowarat, at 630,000 baht per square wah thanks to its potential to be developed into shophouses. Ranked third and fourth are Silom, at 560,000 baht per square wah, and Wireless Road, at 450,000 baht. The two locations have potential for office buildings, which could provide 8% returns.
Areas where prices dropped the most are in outer Bangkok, especially where there are no plans for roads and infrastructure. ”The government should invest more in infrastructure such as new roads or expressways to help increase land prices by three to four times, which would help boost the economy,” Mr Sopon added.
The prices indicated in this survey were based are the estimated real selling prices of land, not the official appraised prices. (BKK Post)
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