REIC reports that the index of vacant land prices before development in Bangkok and surrounding areas for Q4 2023 has increased by 3.8% compared to the previous quarter and by 3.4% compared to the same period last year. This indicates a continuous upward trend in vacant land prices, although it remains below the average growth rate of 5% prior to the COVID-19 pandemic. The slowdown is attributed to various negative economic factors, such as rising policy interest rates, full land tax collection, and high household debt, which have led to decreased confidence among operators.

REIC found that the area with the highest increase in land prices is (1) Samut Prakan - Phra Pradaeng - Phra Samut Chedi. The route with the highest increase in land prices is the Green Line from Bearing to Samut Prakan to Bang Pu.

The Real Estate Information Center of the Government Housing Bank (REIC) reported that the index for vacant land prices before development in Bangkok and surrounding areas for Q4 2023 stands at 394.2 points, reflecting a 3.8% increase compared to the previous quarter (QoQ) and a 3.4% increase compared to the same period last year (YoY). This shows that the prices of vacant land before development continue to rise, albeit at a slower rate. The increase is lower than the average growth rate of 14.8% per quarter (YoY) from 2015 to 2019, before the COVID-19 crisis, which had an average increase of 4.1% from the previous quarter (QoQ).

Dr. Wichai Wiratthakhan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center, stated, "The factors contributing to the slower increase in vacant land prices are due to the economic slowdown from various negative factors, particularly the policy interest rate, which was raised to 2.50% on September 27, 2023 (the fifth increase in 2023). This rate may remain high for some time. Additionally, the government has fully collected land and building taxes without the 90% discount as in 2019-2020, and the Treasury Department has announced new land appraisal prices for 2023-2026. These factors have led landowners to release land supply to the market to reduce their tax burden. However, the accumulated demand for land purchases from operators has decreased due to the tax burden associated with holding land, which will become a cost for future project development. Furthermore, the high household debt in Thailand, exceeding 90% of GDP, and the expiration of LTV relaxation measures on December 31, 2023, have slowed down purchasing power for housing. As a result, operators need to adjust by delaying plans for new project sales, which may also lead to a slowdown in accumulating vacant land for development."

In Q4 2023, the top five areas with the highest growth rates in land prices compared to the same period last year (YoY) are as follows:

Rank 1: Land in the Samut Prakan - Phra Pradaeng - Phra Samut Chedi area increased by 51.3%.

Rank 2: Land in the Taling Chan - Bang Khae - Phasi Charoen - Nong Kham - Taling Chan - Thonburi - Khlong San - Bang Phlat - Bangkok Noi - Bangkok Yai area increased by 31.0%.

Rank 3: Land in the Lat Phrao - Bang Kapi - Wang Thonglang - Bueng Kum - Saphan Sung - Khan Na Yao area increased by 30.2%.

Rank 4: Land in the Rat Burana - Bang Khun Thian - Thung Khru - Bang Bon - Chom Thong area increased by 26.9%.

Rank 5: Land in Nakhon Pathom increased by 24.1%.

The changes in land prices reflect that land in the suburban areas of Bangkok and surrounding regions has experienced higher price changes than in the inner districts. This is due to significant development plans in suburban areas and surrounding provinces, such as large-scale state and private projects, land expropriation plans for new roads, and mass transit rail development plans, including new routes and extensions. Additionally, the revised Bangkok master plan (expected to be announced in 2025) will change land use zoning and development potential in certain areas to accommodate denser commercial and residential projects, particularly along the newly opened subway lines since 2013, leading to rapid price changes in those locations. In contrast, while prices in the city center have increased, vacant land before development is becoming limited and already has high prices, resulting in lower growth rates compared to suburban areas.

For vacant land prices before development along the subway routes in Q4 2023, the top five routes with the highest growth rates in land prices compared to the same period last year (YoY) are primarily areas planned for future subway projects, connecting to important commercial areas and existing subway projects, as detailed below:

Rank 1: Green Line (Samut Prakan - Bang Pu) and Green Line (Bearing - Samut Prakan) are future projects and currently operational projects, with indices of 338.8 points and 333.9 points, respectively, and a land price growth rate of 51.3% compared to the same period last year (YoY). The land prices in the Samut Prakan and Phra Samut Chedi areas have increased significantly, likely due to their status as a connection point for the rail network between the Green Line (Samut Prakan - Bang Pu), Green Line (Bearing - Samut Prakan), and Yellow Line (Lat Phrao - Samrong), making travel convenient. Developers are purchasing land in these locations for residential project development.

Rank 2: Blue Line (Bang Khae - Phutthamonthon Sai 4) is a future project with an index of 536.9 points and a land price growth rate of 31.0% compared to the same period last year (YoY). The land prices in the Bang Khae area have increased significantly.

Rank 3: Light Red Line (Taling Chan - Salaya) is a future project with an index of 507.5 points and a land price growth rate of 25.6% compared to the same period last year (YoY). The land prices in the Phutthamonthon, Taling Chan, and Bang Krui areas have increased significantly.

Rank 4: Purple Line (Bang Sue - Rat Burana) is a project currently under construction with an index of 471.4 points and a land price growth rate of 14.4% compared to the same period last year (YoY). The land prices in the Phra Pradaeng, Thung Khru, and Chom Thong areas have increased significantly.

Rank 5: Gray Line (Watcharapol - Rama 9 - Tha Phra) is a future project with an index of 479.4 points and a land price growth rate of 10.3% compared to the same period last year (YoY). The land prices in the Wang Thonglang, Bueng Kum, Lat Phrao, and Yan Nawa areas have increased significantly.

Methodology for Data Compilation

The Real Estate Information Center of the Government Housing Bank monitors changes in vacant land prices before development in the Bangkok and surrounding areas, covering six provinces: Bangkok, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, and Nakhon Pathom, using 2012 as the base year and compiling quarterly indices.

The study utilizes data on the transfer of vacant land ownership from the Land Department, selecting only vacant land without structures, with a minimum size of 200 square wah, and using data exclusively from transfers involving "juristic persons" as they typically reflect actual transaction prices. Real estate development companies must accurately record expenses or income for tax calculations and annual expenses.

The index calculation employs the Chain Laspeyres analysis method, using the average price per square wah of vacant land weighted by the value of land ownership transfers in the Bangkok and surrounding areas from 2012 to 2016. Factors analyzed through multiple regression analysis include (1) the location of the land, (2) land use planning, and (3) mass transit rail routes.

Disclaimer

The statistical data and any writings in this report are sourced from reliable sources or processed from trusted data. The Real Estate Information Center has verified the information to a certain extent but cannot guarantee its accuracy or truthfulness and cannot be held liable for any damages arising from the use of this information. Users should exercise discretion and verify as appropriate.