Price of land in Bangkok, suburbs continues to increase, but at slower pace
Land prices in Bangkok and its suburbs inched higher in the second quarter of this year, but at a slower pace than in the first quarter and last year, the Government Housing Bank (GHB) said.
Dr Vichai Viratkapan, acting director of GHB’s Real Estate Information Centre, said the price index of land without buildings in Bangkok and suburbs in the second quarter was 176.5 points, an increase of 6.2% year on year but down 2.4% quarter on quarter.
He said the rate of increase in land price in Bangkok and the suburbs was at a slower pace when compared to the five-year average price before Covid-19 and the previous quarter.
Land prices rose 14.8% compared to the average prices from 2015-2019 but increased by 4.1% from the first quarter.
Vichai attributed the slowdown in the Thai economy in the first half of this year and the central bank’s decision to exempt the loan-to-value (LTV) ratio, high household debt and the uptrend in interest rates for the slow down in price increase.
The LTV ratio is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage.
Vichai said that household debt is still high at 90% of gross domestic product, while the rising interest rate had made people reluctant to buy houses.
Moreover, property developers also have put on hold new housing projects from now until the end of this year, he said.
The government’s announcement to start collecting land tax at full rate from this year has made developers reluctant to add more plots to their land bank, Vichai said.
