Developers see need for revised Bangkok plan

Bangkok’s poor ability to deal with major flooding, as demonstrated by the recent disaster, means the draft city plan that is supposed to come into effect next year needs to be revised, property developers say.

After flooding hit more than 300,000 homes in the capital and its suburbs since October, many developers say the City Planning Department of the Bangkok Metropolitan Administration (BMA) must include in the new plan proper floodways in residential areas.

But property firms themselves have also learned from the disaster. They will have to revise their construction processes, designing homes to withstand floods while spending more on landfill to ensure houses are above flood levels.

Pruksa Real Estate director and chief business officer Prasert Taedullayasatit said homes in such locations as Min Buri, Nong Chok and Lat Krabang faced flooding in November, meaning run-offs hit residential areas before floodways. And that means something is wrong with the city plan and flood-management system.

“We suggest that the City Planning Department revise its new city plan regarding the loca-tions of floodways and residential areas. This will help property de-velopers know which locations are suitable for building homes,” he said.

 

Rising costs

Pruksa president and chief executive officer Thongma Vijitphongpun said the company also had to revise its construction processes in flood-prone locations by increasing its landfill in an effort to keep new homes above flood levels. This will drive up its construction costs by 1.5 per cent for detached-house projects and 3 per cent for townhouse projects.

After this flood, Pruksa has lowered its revenue target for this year from Bt30 billion to between Bt22 billion and Bt24 billion.

Business Housing Association president Issara Boonyoung, who also owns property firm Kanda Group, agreed that the BMA’s City Planning Department had to take flood prevention into account before the new plan comes into effect because this was an urgent issue that would affect land use in Greater Bangkok.

“This is not only for property firms to manage their residential projects. This is necessary for home-buyers to know which locations are safe from floods,” he said.

He added that this flood would change how property firms select locations to develop residential projects and would have a consequent impact on land prices.

“Land prices in locations that faced floods will drop by 10-20 per cent, while prices in locations that did not face floods will benefit from this event,” he said.

 

Property market down

Thai Real Estate Association president Kittipol Pramote Na Ayudhya said the flood would have a direct impact on the property market in Greater Bangkok, which would drop by at least 33 per cent from Bt390 billion last year as people delay their decisions to buy or transfer homes in flooded areas.

Earlier, the Real Estate Information Centre (REIC) said 700,000 residential units in metropolitan Bangkok had sustained flood damage, 100,000 of which were in projects built by property firms and the rest built privately by landowners.

According to REIC figures, the Greater Bangkok property market this year will drop by 10-20 per cent. This includes newly registered homes in Bangkok and suburbs dropping from 107,000 units last year to 80,000-90,000 this year, a reduction of 15-25 per cent. Transfers of residences, both new projects and resale homes, in the metropolitan area will drop by 15-21 per cent, from 178,000 units last year to 140,000-150,000 this year.

The number of new condominium projects launched in Greater Bangkok this year will be 24-31 per cent lower than last year, from 66,000 units in 2010 to 45,000-50,000 units in 2011.

The number of new low-rise residences including detached houses, duplexes and townhouses will drop by 7-16 per cent from 54,000 units last year to 45,000-50,000 this year.

REIC research indicates that the property market will see reduced activity from the current quarter into the first quarter of next year.