Thailand’s real estate market is booming, and nowhere is this more evident than in Bangkok. Over the past two years, land prices in the capital have risen as much as 75% due to a combination of urbanization, infrastructure expansion, and market competition.
This surge in land prices is good news for investors looking to take advantage of the growth and stability of the Thai economy and a sign of the Thai real estate market’s major rebound in 2023.
A significant driver behind the increase in land prices has been the construction of a new expressway in the city. According to Saenphin Sukhee, CEO of residential developer Frasers Property Home (Thailand), the expressway caused land prices in some areas of Bangkok to nearly double. “In some locations such as Hathairat Road, the price more than tripled from 2-3 million baht per rai to 10 million baht after the completion of the expressway on Chatu Chot Road,” he said.
The new expressway has not only impacted land prices in western Bangkok but has driven up prices in other areas of the city as well.
Construction of infrastructure projects linking Bangkok to western provinces has led to a 64-65% increase in land prices in Pin Klao-Ratchaphruek and Rattanathibet-Chaiyaphruek. Urbanization stemming from the expansion of the Pink Line mass transit has also had a significant impact, with land prices in Kaset-Ram Intra and Watcharapol-Sai Mai rising 60% and 44% respectively.
Competition among residential developers has also played a role in the surge in land prices.
The Real Estate Information Center (REIC) reports that the price index of vacant land in Greater Bangkok increased by 34% from 284.7 in the fourth quarter of 2019 to 381.4 in the fourth quarter of 2023. The highest increase was in Ramkhamhaeng-On Nut, which saw a 138% rise in land prices, followed by Bang Na-Ring Road with a 98% increase and Theparak-Bang Phli with a 39% increase according to the Bangkok Post.
Vacant land prices in Bangkok. Graphic by the Bangkok Post based on REIC data.
The Thai economy is expected to continue to perform well in 2023, which bodes well for the real estate market. Despite the global economic slowdown due to the COVID-19 pandemic and the Russia-Ukraine war, the REIC reports that the growth in land prices remained lower than the five-year pre-pandemic average of 14.8% year-on-year and 4.1% quarter-on-quarter during 2015-2019.
Vichai Viratkapan, acting director-general of REIC, attributed this lower growth to the normal collection of the land and building tax in 2021-2022.
Investors looking to take advantage of the growth in the Thai real estate market will find plenty of opportunities in 2023. The REIC reports that the top three zones with the highest price increase for vacant land in the fourth quarter of 2022 were Bang Phli-Bang Bo-Bang Sao Thong, Muang Nonthaburi-Pak Kret, and Muang Pathum Thani-Lat Lum Kaew-Sam Kok.
According to Vichai, “land in outer Bangkok locations saw a rising change in prices as land prices remained low, viable to develop low-rise houses at affordable prices for mass market demand.”
For investors who are considering investing in Thai real estate, now is the time to act. With housing prices expected to rise and the Thai economy performing well, the Thai real estate market is continuing to look like a bright spot with Chinese buyers returning, multiple major investment from large developers, and Bangkok’s luxury market heating up.
Summary
The Thai real estate market is experiencing a surge in land prices, particularly in Bangkok, due to urbanization, infrastructure expansion, and market competition. Land prices in the capital have risen as much as 75% in the past two years, with the construction of a new expressway playing a significant role in driving up prices.
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