Prices of vacant land in Greater Bangkok are growing at a slower pace due to the sluggish economy and the full collection of the land and building tax, which started this year.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the price index of vacant land in Greater Bangkok was 354.5 in the second quarter of this year, up 4% from the first quarter and 6.5% higher than the same period last year.
"Vacant land prices keep rising consecutively but at a slower pace when compared with an average annual growth of 14.8% between 2015-19," he said.
One of the key factors was the economic slowdown caused by the pandemic, which has been worsened by the Ukraine-Russia war, meaning the Thai economy has seen lower growth than expected.
"Many developers slowed down land purchases as land costs are higher after the land and building tax started the 100% collection rate this year, from 10% in 2020-21," said Mr Vichai. "They need to control the tax burden, which is one of the development costs."
According to REIC, the top five zones with the highest year-on-year increase in land prices in the second quarter was led by Bang Phli, Bang Bo, and Bang Sao Thong districts of Samut Prakan, which saw a rise of 40.5%.
Sopon Racharaksa, chief executive of industrial estate developer Frasers Property Industrial (Thailand) Co, said land prices in Bang Phli had soared as the location was close to Suvarnabhumi airport and the city area.
"Land in Bang Phli is in high demand from both industrial estate developers that are looking for warehouse development and expansion, and residential developers that are looking to develop housing projects," said Mr Sopon.
The second largest year-on-year increase in land prices was in the Bang Kruai, Bang Yai, Bang Bua Thong and Sai Noi districts of Nonthaburi with an increase of 24.2%, followed by the Muang and Pak Kret districts of Nonthaburi at 23.6%.
Mr Vichai said the top five zones with the largest year-on-year increase in land prices were mostly in Bangkok's neighbouring provinces because prices there remained low and demand for land for low-rise housing developments was strong.
"Land prices in Bangkok's inner-city locations were already high. Despite a slight rise in land prices, the increase was not as high as that in Bangkok's outskirts," said Mr Vichai.
The top five zones with the highest price increases remained those near mass transit lines.
