According to leading property analysts, new mass transit lines that are to be built across Bangkok will lead to significant changes in the property sector over the course of the next 10 years.
There are 11 mass transit projects that will span a total of 480 kilometers due to be rolled out by 2025. These include the Yellow line from Lat Phrao to Samrong, the Brown line from Khae Rai to Lam Sali, the Pink line from Khae Rai to Min Buri and the Orange line from Thailand Cultural Centre to Min Buri.
Surapong Laoha-Unya, chief operating officer at Bangkok Mass Transit System Plc., (operator of the skytrain), was quoted as saying, “Land prices in locations along the skytrain and MRT rose by 10% per year on average, compared with an average increase of 3% in land prices in Bangkok.”
He expects the effects on property prices along the new routes will be similar to those seen along the already established skytrain and MRT, noting that new housing supply is falling but condo supply along mass transit routes is rising, with a healthy sales rate of above 70 per cent.
The Skytrain has seen passenger numbers increase around 9 per cent per year each year since its completion in 1999. However the recently completed Purple line was less popular.
Tritecha Tangmatitham, managing director of SET-listed developer Supalai Plc., was quoted as saying, “In locations along the Purple Line on Rattanathibet Road onwards, land prices are still low and traffic is not too heavy,” adding, “People usually prefer a single house or townhouse to a condo unit. This is why there are still several unsold condos there.”
When the Purple Line was being constructed, there were many condo launches with a lot of supply coming on to the market.
Mr. Tangmatitham was also quoted as saying, “The Purple Line is not popular as it takes longer and is more expensive than using a passenger van. Even when the missing link was connected, it did not matter.”
However, as inner city prices grow to higher levels, new areas along the Yellow, Pink and Orange lines will allow the property market to offer more affordable alternatives.
Chatchai Payuhanaveechai, chief executive and president of the Government Savings Bank was quoted as saying, “Foreigners will become a new market for the Bangkok property market as condos priced higher than 300,000 baht per square meter may not be mainly for Thais,” adding, “Many wealthy Thais still want to live in a single house on a large plot of land.”
The bank had researched the market and found that demand in Greater Bangkok rose 5.5 per cent while supply only rose 3.5 per cent. This lead to an eleven per cent rise in total residential transaction values as prices moved higher.