Bangkok land prices at standstill

Land value appreciation in the city stunted for the first time since 2009

Empty Bangkok lot being prepared for construction. MANUSAWEE PHANNITHI/Shutterstock

For the first time in over a decade, land prices in Bangkok are likely to stay flat or outright descend this year, the Bangkok Post reported, citing a report from CBRE Thailand.

Land prices in the Thai capital are set to hold steady from last year or slide annually, by five percent to 10 percent, for the first time since the aftermath of the Hamburger crisis in 2009, according to Aliwassa Pathnadabutr, managing director of CBRE Thailand.

Meanwhile, the number of landowners with a large amount of land stock for sale is on the rise. “Some landlords who never thought about selling their plots might be affected by the current economic slowdown,” she told the Post. “They are offering more negotiable deals or flexible prices.”

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Land prices in the city are known to ascend by five percent to six percent per year on average. The national average is two percent to three percent per year.

Other landowners are steeling themselves for the upcoming Land and Buildings tax, which will slap a levy of 0.3 percent to 0.7 percent on vacant land, growing 0.3 percent every three years. Some landowners have started offering leasehold options to minimise new costs from the levy.

“Last year landowners were able to ask any price, but they are more flexible this year,” said Aliwassa. “This year will be a transitional period from a sellers’ market the past several years to a buyers’ market.”

New appraisal prices for land take effect for four years from 1 January. Current appraisal prices are expected to increase 2.45 percent for plots in Bangkok and 8.34 percent nationwide, the Post reported, citing the Treasury Department.