The year-on-year increase in the land price index in Greater Bangkok in the fourth quarter of 2024 slowed to 1.8%, close to the historic low of 1.7% recorded in the fourth quarter of 2021, mainly due to tepid investment among developers.
The Real Estate Information Center (REIC) reported the price index of vacant land in Greater Bangkok was 401.4 in the fourth quarter of last year, up 1.8% year-on-year and 2.6% quarter-on-quarter.
This was the second-lowest year-on-year increase, following a 1.7% uptick in the fourth quarter of 2021 during the pandemic.
According to REIC, the slowdown resulted from reduced investment in new real estate projects over the past few years, in line with weak residential demand attributed to the sluggish economy.
This prompted many developers to be more cautious when purchasing new plots for project development, noted the centre.
The cautious approach to land investment among developers is also reflected in the reduced number of new launches this year compared with 2024.
During the past three weeks, five major SET-listed developers announced plans to launch a total of 85 new residential projects this year, down 26% from 115 projects launched last year.
Some of the projects planned for this year were scheduled to launch in 2024, but were postponed due to unfavourable market conditions. These projects are being developed on land from existing land banks, not newly acquired plots.
REIC also reported the top five locations with the highest year-on-year land price growth remained concentrated in the suburban areas of Bangkok and its vicinity.
These included Nakhon Pathom, with a surge of 59.6%, followed by Samut Sakhon (44.2%) and Muang-Lat Lum Kaeo-Sam Khok in Pathum Thani (27.3%).
The fourth and fifth locations were areas in Bangkok, namely Chatuchak, Huai Khwang, Yannawa, Watthana, Klong Toey, Phaya Thai, Bang Kholaem, Pomprap Sattruphai, Bang Sue, Din Daeng, Ratchathewi, and Bang Rak (16.4%), followed by Bang Khen, Sai Mai, Don Muang, Laksi, Min Buri, Nong Chok, Klong Sam Wa, and Lat Krabang (1.2%).
The key drivers were infrastructure developments, such as highway and intercity motorway construction projects, which have significantly improved accessibility to and from the city.
In addition, land prices in suburban areas remained relatively affordable, allowing developers to launch low-rise housing projects at prices that match the purchasing power of prospective homebuyers.
Meanwhile, land prices in inner Bangkok have risen due to the limited availability of vacant land awaiting development.
This resulted in transactions involving smaller plots with high value, which were often developed into mixed-use projects comprising office spaces, commercial areas and condo units.