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Published on March 12, 2008

Prices of land around the new routes of the mass-transit rail network have risen by 10 per cent to 100 per cent this year since the government confirmed an investment of up to Bt500 billion in the next three years.

The nine routes announced by Prime Minister Samak Sundaravej are: Bang Yai- Sai Noi-Dao Khanong (a stretch of 35 kilometres); Samrong-Muang Boran (the ancient city, stretch of 17km); Mo Chit-Saphan Mai-Lamlukka-Future Park Rangsit (36.5km); Taksin-Mahachai (20km); Bang Sue-Klong Toei (Loop 1, 29km); Min Buri-Salaya (51km); Taksin-Buddhamondhol 4 (21.7km); Wat Yai-Pomphrachul (6km); and Bang Kapi (Loop 2, 95km). The entire route covers 311km.

According to a survey conducted by The Nation, land prices from Onnuj to Sukhumvit Soi 107, Mo-Chit to Rangsit, Rattanathibet Road to Bang Yai district, and Rama V to Sathorn have risen, indicating strong demand for these locations.

Preuksa Real Estate president and chief executive Thongma Vijitpongpun said land prices around the new mass-transit rail network had risen only after the government's announcement of the fresh investment.

The project is expected to start in the final quarter of the year.

Thongma said prices around the existing mass-transit system in locations such as Sukhumvit, Phaholyothin Road, Ratchadaphisek and Sathorn had doubled after project completion. His company is finding it hard to source land to develop city condominium projects around the existing system.

Anticipating a similar trend, most property developers bought land close to the new mass-transit system well before prices started rising. That is expected to drive land prices close to double, Thongma said.

For instance, land prices at Phaholyothin Road have increased from Bt250,000 per square wah last year to Bt300,000 this year. Meanwhile, prices in suburban areas of Bangkok such as Rangsit, Bang Yai and Rama V have risen from Bt1 million per rai to Bt2 million, he said.

Land & Houses senior vice president Naporn Soonthornchit-charoen said prices in the central business district had been rising since last year, but had not stabilised. However, demand for land around the new mass-transit routes has seen an aggressive increase because property firms are keen to expand there to meet the demand that is sure come, he said.

According to research by the Agency For Real Estate Affairs, the Sukhumvit-Rama IV stretch alone saw record growth last year, with the value of projects coming up there estimated to be Bt15.7 billion.

The stretch has continued to see strong growth this year as well. Phaholyothin Road, which saw projects worth Bt15.6 billion launched last year, is closely followed by Klong San, Bang Na-Trat, Pattanakan, Yan Nawa-Silom, Rama V-Bang Krouy, Rachada-Lat Phrao, Pracha uthid and Rachayothin as areas where significant growth in new residential projects can be seen.

The research indicated that overall, prices in Bangkok and suburbs were likely to rise by 10 per cent.

Somluck Srimalee

The Nation