Land prices rise sharply after floods

business December 03, 2011 00:00

By Business Desk
The Nation

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Land prices in Bangkok's inner areas such as Siam Square have surged dramatically to Bt1.4 million per square wah (4 square metres) in the aftermath of the severe floods that hit many areas, according to the latest survey of the Agency for Real Estate Af

The areas along Sukhumvit Road, where Siam Paragon Shopping Complex and Siam Square are located, have seen rates shoot up to as high as Bt1.4 million per square wah, or Bt560 million per rai, a 17-per-cent surge from Bt1.2 million per square wah last year.

The Siam Square area also recorded the highest increase in land prices in 15 years, rising from Bt430,000 per square wah in 1996. However, the price hikes reflect higher returns on investment. Most buildings in Siam Square are shopping complexes. 
“The main reason for the skyrocketing prices is there is a mass-transit electric train passing through the areas, especially those in Siam Square, which connect to the stations of the two mass-transit trains – BTS Skytrain and MRT Subway,” said the agency president, Sophon Pornchokchai. 
Apart from Siam Square, the land price has also gone up in areas such as Wireless, Silom and Rajdamri roads to Bt1.1 million per square wah. 
Areas along Sathon Road are priced at Bt1 million per square wah. Sophon said the surveyed land was evaluated according to market price and not the appraisals of the Treasury Department for land registration. 
However, the evaluated prices might be lower than those set for sale at inflated prices. For some plots of land, sellers could be seen demanding as much as Bt2 million per square wah. 
The cheapest land is along Klong 13 Road in Pathum Thani with an evaluated price of Bt2,600 per square wah or Bt1.04 million per rai.
“The agency believes that land prices will not fall as a result of the floods because there is no evidence that disasters – such as the severe floods in 1995 and the floods in Hat Yai last year – had lowered land prices,” Sophon said.