Prop Tomorrow Co., Ltd. organized a seminar titled 'Bangkok Quadrant: The Changing World, Changing Rules, Real Estate Must Adapt Quickly,' inviting both public and private sectors to discuss important issues in the real estate sector and the current market overview, along with clarifying measures expected to be enforced in the coming year.

 

 

 

          Mr. Sakchai Boonma, Deputy Governor of Bangkok stated during the seminar 'Bangkok Quadrant: The Changing World, Changing Rules, Real Estate Must Adapt Quickly' on the topic 'Bangkok's New City Plan and Land Use Plan' that currently, Bangkok has a land development plan aimed at maximizing land use to advance the city. The new city plan will focus on developing public utility areas around mass transit stations to promote mixed-use land utilization and high density around mass transit stations by setting conditions for businesses located within 500, 600, and 800 meters from the mass transit stations. Additionally, measures for transferring development rights will be implemented to ensure fairness in compliance with the overall city plan in cases designated as historical buildings, buildings worthy of preservation, or agricultural areas, among others. The city plan will also reduce flood retention areas (green striped) to convert them into agricultural land (green) by excavating and adjusting drainage systems along existing canals to enhance land utilization. Furthermore, large-scale development project measures will be introduced to provide flexibility in developing projects on large land plots by increasing the floor area ratio (FAR) from 5 formats to 8 formats.

          He urged citizens and operators not to worry about the changes in the new Bangkok city plan, as the adjustments will enhance land utilization in the city. Additionally, there are plans to develop public transport systems, including buses, boats, and trains, to align with overall development. The comprehensive city plan for Bangkok is expected to be usable by the end of 2020.

 

          Mr. Thanunphong Suksomsak, Director of the Property Valuation Department, Treasury Department discussed the topic 'Changes in New Land Valuation Prices,' stating that currently, the Treasury Department has land with title deeds and Nor Sor 3 Gor documents that can be valued, totaling 33.4 million plots or approximately 321 million rai. The nationwide land valuation prices from 2016 to 2019 have increased by 8.34%, averaging 2% per year, which aligns with economic conditions and currency values.

            However, it must be acknowledged that the Treasury Department's valuation is only based on actual sales for 15% of all plots, as most transactions occur at market prices. The government is currently accelerating the development of an AI system to determine land prices to control land sale prices, ensuring they do not exceed realistic values.

          Bangkok remains the most expensive area for land valuation, averaging 1 million baht per square wah. The newly assessed land prices on major roads in Bangkok, such as Silom, range from 750,000 to 1 million baht per square wah, an increase of 7.14%; Phloen Chit at 900,000 baht per square wah, an increase of 11.11%; Rama 1 at 400,000 to 1 million baht per square wah, an increase of 0-11%; Sathorn at 450,000 to 800,000 baht per square wah, an increase of 6.67%; and Sukhumvit at 230,000 to 750,000 baht per square wah, an increase of 9.52-15.38%.

          For regional land valuation prices, several provinces are noteworthy, such as Pathum Thani, where the valuation is between 100,000 and 60,000 baht per square wah, an increase of 7.07%, located along Phahonyothin Road and Rangsit-Pathum Thani Road; Phitsanulok, where the valuation is between 100,000 and 30,000 baht per square wah, an increase of 25.13%; and Chonburi, where the valuation is between 220,000 and 200,000 baht per square wah, an increase of 28.23%.

 

 

          Mr. Rith Suyamanont, Director of the Tax Policy Bureau, Ministry of Finance discussed the readiness for the new tax collection under the Land and Building Tax Act B.E. 2562, stating that the land and building tax has been in effect since March 13, 2019, and will start collecting taxes from January 1, 2020. This will help modernize the property tax system, address issues with the previous tax structure, and encourage landowners to develop their properties, providing local governments with sufficient budgets for long-term development. The land and building tax will be collected based on the value of the land and buildings at rates set by the government, with landowners, building owners, condominium owners, and holders of state property (land or buildings) being responsible for tax payment.

          There are measures to mitigate impacts, including exemptions for primary residences, state properties, common property, religious properties, international organizations, and private properties used for public benefit. Currently, those paying local maintenance tax will be exempt from tax for the first three years after the Land and Building Tax Act comes into effect, and from the fourth year onwards, they will be exempt from the taxable value of land not exceeding 50 million baht, meaning that agricultural groups currently paying taxes will be fully exempt. For residential properties, such as primary residences, which currently pay a local maintenance tax of 834 baht, will be exempt from taxes starting in 2020, while secondary residences will be taxed progressively.

 

 

          Mr. Wasan Kheangsiri, President of the Housing Business Association, commented on the overall real estate market and economic conditions in 2020 stating that it is unlikely to slow down more than in 2019, which faced challenges from various negative factors affecting purchasing power. If the government or related agencies implement real estate measures, they should focus on the appropriateness of the measures and study specific controls or regulations. Regarding urban planning improvements, the focus should be on maximizing land use benefits in each area, and a good city plan should address issues for residents.

 

 

         Ms. Aliwasa Phattanathabut, Managing Director of CBRE (Thailand) Co., Ltd. discussed the overall foreign investment market, believing that there are still buyers in the market, but it may slow down due to the impact of the volatile global economy. Domestically, there may be a slowdown due to economic factors, and landowners who have never sold land are increasingly bringing land to market due to the new land tax measures, which will lead to further adjustments in land prices until next year. In 2020, it is expected that there will be more foreign investments with Thai operators, as there has been continuous collaboration in the past.

          Additionally, Ms. Aliwasa Phattanathabut provided further recommendations that operators looking to develop real estate projects should consider three important factors to ensure good sales:

1. Choose locations with limited supply.

2. Prices should be lower than market prices to attract buyers.

3. Have a strong selling point to present to target customers.

 

 

          Mr. Pirapong Jaroonaek, CEO of Origin Property Public Company Limited (ORI) discussed the overall real estate market in 2020, stating that although the market is currently in a downturn, the measures implemented will have long-term benefits for both customers and operators. Regarding housing loan disbursement, it is believed that there will be relaxations for joint loans, which is expected to improve the market.

 

 

          Asst. Prof. Dr. Kesara Thanyalakpark, Deputy CEO of Sena Development Public Company Limited stated that this year may see significant changes, noting that the LTV measures have positively impacted demand from consumers whose purchasing power has decreased. However, in 2020, the real estate business will still have factors to monitor regarding the Thai economy, with an expected growth rate of about 3.2%. The LTV measures may continue to affect consumer purchasing power, while positive factors include the stability of interest rates, and the opening of extended electric train services will benefit consumer travel.