Real Estate Information Center, Government Housing Bank reported that the index of vacant land prices before development in Bangkok and surrounding areas for Q2 2023 showed a slowdown in growth, with an index value of 376.5 points, reflecting a year-on-year increase of 6.2% compared to the same period last year (YoY), but a decrease of -2.4% compared to the previous quarter (QoQ). This indicates that while the prices of vacant land before development continue to rise, the growth rate has slowed since the first quarter due to various negative market factors. Overall, the growth rate of the vacant land price index in this quarter is lower than the average rate of the past five years before the COVID-19 crisis (2015 – 2019).

Dr. Vichai Wiratthakhan, Acting Director of the Real Estate Information Center, Government Housing Bank revealed that the index of vacant land prices before development in Bangkok and surrounding areas for Q2 2023 stands at 376.5 points, reflecting a 6.2% increase compared to the same period last year (YoY), but a -2.4% decrease compared to the previous quarter (QoQ). This shows that the prices of vacant land before development continue to rise but at a slower pace than in the first quarter. The growth rate of the land price index this quarter is not high compared to the average growth rate of 14.8% during the same quarter last year (YoY) and also shows a 4.1% increase in the average change rate from the previous quarter (QoQ), indicating a higher growth rate of the land price index during that period compared to now.

“The factors contributing to the slower increase in vacant land prices include the lower-than-expected growth of the Thai economy in the first half of 2023, the cancellation of the relaxation of LTV measures by the Bank of Thailand, and the household debt ratio remaining high at 90% of GDP. Additionally, the current rising interest rate environment affects the purchasing power and ability to repay housing loans, leading to a slowdown in housing demand. Consequently, developers are postponing plans to launch new projects from this year to 2024, resulting in a decrease in the purchase of vacant land for future development in several locations. Furthermore, the government has announced full land and building tax collection in 2023, prompting developers to adjust their land acquisition plans to manage future project development costs, leading to a reduced demand for land accumulation in the market as a Land Bank to control the burden of land holding costs, including land tax, which is a cost for future project development.”

Table 1: Index of Vacant Land Prices Before Development in Bangkok - Surrounding Areas Q2 2023

Chart 1: Index of Vacant Land Prices Before Development in Bangkok - Surrounding Areas

Chart 2: Growth Rate of the Index of Vacant Land Prices Before Development in Bangkok - Surrounding Areas

In Q2 2023, REIC found that the top 5 zones with the highest growth rates of land prices compared to the same quarter last year (YoY) are as follows:

Rank 1: Land in the Bang Phli-Bang Bo-Bang Sao Thong zone saw a price change of up to 54.9%.

Rank 2: Land in the Samut Sakhon zone experienced a price change of 26.1%.

Rank 3: Land in the Pathum Thani-Lad Lum Kaew-Sam Khok zone saw a price change of 17.6%.

Rank 4: Land in the Rat Burana-Bang Khun Thian-Thung Khru-Bang Bon-Chom Thong zone experienced a price change of 17.5%.

Rank 5: Land in the Samut Prakan-Pra Pradaeng-Pra Samut Chedi zone saw a price change of 11.4%.

Table 2: Top 5 Zones with the Highest Price Change Rates Q2 2023

The changes in land prices reflect that land in the suburban areas of Bangkok and surrounding regions has seen significant price changes. This is because land in these suburban areas is relatively affordable and can be developed into low-rise residential projects, allowing for cost control of housing prices to align with purchasing power. These zones are also where many residential projects are being developed and are among the top-selling areas.

Regarding vacant land prices before development along the routes with electric trains, the top 5 electric train routes with the highest growth rates in land prices compared to the same quarter last year (YoY) are mostly areas where electric train projects are already operational or planned for the future, connecting to key commercial areas and ongoing project developments. The details are as follows:

Rank 1: Green Line (Samut Prakan-Bang Pu) and Green Line (Bearing-Samut Prakan) are future projects and currently operational projects with index values of 256.6 points and 252.8 points, respectively, showing a land price growth rate of 11.4% compared to the same period last year (YoY). The land prices in Samut Prakan and Pra Samut Chedi areas have seen significant increases.

Rank 2: Purple Line (Bang Yai-Tao Poon) is a future project with an index value of 415.1 points and a land price growth rate of 4.5% compared to the same period last year (YoY). The land prices in Nonthaburi, Bang Yai, and Bang Bua Thong areas have seen significant increases.

Rank 3: MRT and Dark Red Line (Bang Sue-Hua Lamphong) are currently operational and future projects with index values of 474.4 points and 467.0 points, respectively, showing a land price growth rate of 3.8% compared to the same period last year (YoY). The land prices in Chatuchak, Huai Khwang, and Phaya Thai areas have seen significant increases.

Rank 4: Green Line (Mo Chit-Sapan Mai-Khukhot) and Dark Red Line (Bang Sue-Thammasat Rangsit) are currently operational projects with index values of 443.4 and 436.6 points, respectively, showing a land price growth rate of 3.3% compared to the same period last year (YoY). The land prices in Bang Khen, Lak Si, Don Mueang, and Khlong Luang areas have seen significant increases.

Rank 5: Dark Red Line (Hua Lamphong-Mahachai) is a future project with an index value of 440.4 points and a land price growth rate of 2.4% compared to the same period last year (YoY). The land prices in Chom Thong, Bang Bon, and Bang Khun Thian areas have seen significant increases.

Table 3: Index of Vacant Land Prices Before Development Along Electric Train Routes with the Highest Changes: Top 5 in Q2 2023