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Prices for new houses climb 30% Units in Bangkok up to B3.5m from B2.7m

Published: 12/11/2009 at 12:00 AM
Newspaper section: Business

The average new house price has soared by 30% this year even as the purchasing power of lower-income earners decreased, says Sopon Pornchokchai, president of the property consultant Agency for Real Estate Affairs.

"It has been a struggle for low-income earners," he said. "Many factories hurt by the financial crisis needed to close down."

This year the average housing price in Greater Bangkok is 3.542 million baht, up from 2.718 million in 2008. New houses built this year total 44,846, worth a combined 158.81 billion baht, down 36% and 23% from the year before, respectively.

Land prices of plots close to the BTS rose 92% between 1998 and 2009, an average of 8.3% a year. The highest increase was in Siam Square at 163%, or 14.8% a year.

At locations near three BTS stations - Siam, Chidlom and Phloen Chit - land prices this year rose by 23-25% from 2008, while land prices at other locations along BTS routes increased 12.3% on average. In all of Bangkok, they rose by 2.6% on average.

The highest increase for plots close to the MRT was on Silom, with a 25% increase, while the average increase along the MRT was 11.7%. From 2005 to 2009, land prices along the BTS and MRT rose 47% and 46% respectively. Bangkok's average was 18% over the past four years.

Mr Sopon said current dominant locations should remain so in the future: the central business district near the two mass transit routes, comprising Sukhumvit, Phloen Chit, Silom, Sathon, Phahon Yothin, Ratchadaphisek and On Nut.

Other potential hot spots include Chaeng Watthana, where the new government centre is located, the Phahon Yothin Transport Centre and the Makkasan Centre, which will be developed by the State Railway of Thailand.

The areas near current and planned roads such as Ratchaphruek, Rama IX, Kalapaphruek, Srinakarin, Vacharapol, Eastern Ring Road and Hathairat also have potential for property investment.

However, Mr Sopon warned investors and developers to be cautious buying land plots near planned mass transit projects like Taksin, Bang Wa, the Airport Link, and Bang Sue-Taling Chan-Bang Yai, which might face speculation similar to locations near Suvarnabhumi Airport in the past four years.

"Investors should wait for a clear plan of mass transit construction," he said.

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