After massive infrastructure projects were endorsed recently by the military regime, property experts believe sustainable urban development strategies with good town planning are desperately needed.
A bird's-eye view of Bangkok shows how property development in Thailand has always followed economic growth. Patipat Janthong
"To guide the country's urban development, national strategies should be established," says Atip Bijanonda, president of the Board of Trade's Construction and Property Business Group Association. "In line with infrastructure development, good town planning for the whole country should be done as one picture, not done by each individual province as it is today."
Mr Atip, also president of the Housing Business Association, says property development in Thailand has followed economic growth. In developed countries, national strategies are normally clearly set to identify which cities should be earmarked for industrial, business or educational development.
Geographically, Thailand is situated in a strategic location at the centre of the Asean region. With national strategies, property investment will have a clear direction to follow, helping develop the country strategically.
"We should clearly identify who we are in Asean and know what strengths we have, no matter whether we are going to be a centre of agriculture or industry, the Detroit of Asia or the world's food hub," Mr Atip says.
Pathum Thani is a good example of a province that has suffered because of the lack of a clear and well-planned national strategy. The province now contains both industrial estates and educational institutions, making it difficult for new developments, particularly factories because of environmental concerns.
To support property development spurred by new infrastructure projects, Mr Atip proposes the establishment of an urban development ministry that will be in charge of all government agencies related to services such as water supply, electricity and city planning.
The property sector currently involves 23 agencies from six ministries as well as financial institutions.
Issara Boonyoung, managing director of property developer Kanda Group, says there is unlikely to be a sudden change in property development or investment in locations where the infrastructure projects will go or pass.
In a fresh location where a new transport route opens up, the first investments will be in industrial and commercial segment. The housing market will follow, he says.
"The impact from the extension of infrastructure projects will be seen next year but that from the new ones will be seen from 2016, as the bidding process will unlikely finish next year."
Mr Issara warns land speculators to take previous lessons into account. Many rushed to buy land in locations where high-speed trains under the previous government's plan were expected to go or pass.
"Land prices did not rise as they expected because the plan was frozen," he says. "Land speculators who are not cash-rich will get hurt."
Despite the peaceful political situation and improving economic outlook, property investors and developers should be cautious about other factors such as changes in town plans and the global economy that may affect land prices.
Wason Khongchantr, managing director of property consultant Modern Property Consultant Co, suggests land investors or property developers wait for new infrastructure projects to hold bidding processes.
"It is worth waiting," he says. "Though land prices are higher [after bidding and construction starts], it is more secure than buying a plot without seeing a single pile of the mass transit project."
Late last month, the National Council for Peace and Order (NCPO) approved two high-speed train routes and six dual-track routes as urgent projects under the eight-year national transport infrastructure development plan, starting this year.
The high-speed train projects costing 741 billion baht are planned to link Nong Khai with Map Ta Phut and Chiang Khong (Chiang Rai) with Ban Phachi (Ayutthaya). The two routes are intended to serve as links between Thailand and southern China.
The maximum speed of trains on the routes will be reduced to 160 km/h from the previous plan of 200 km/h.
The Nong Khai-Map Ta Phut route will cover 737 km and cost 392.5 billion baht, while the Chiang Khong-Ban Phachi route will be 655 km and cost 348.8 billion.
Construction of the routes will begin next year and should be completed by 2021.
Urgent projects under the 2.4-trillion-baht investment include six dual-track railways with a construction budget of 117.4 billion baht, the purchase of 106 locomotives and the renovation of highways.
The highway renovation plan covers Highway No.4 (Krabi-Huay Yot), Highway No.12 (Kalasin-Somdet), Highway No.304 (Kabin Buri-Pak Thong Chai), Highway No.314 (Bang Pakong-Chachoengsao) and Highway No.3138 (Ban Bung-Ban Khai).
Construction of four electric rail routes in Bangkok will be finished within the next three years. The 23-km Purple Line (Bang Yai-Bang Sue) should be completed by next year. The 27-km Blue Line extension (Bang Sue-Tha Phra-Bang Khae), the 12.8-km Green Line (Bearing-Samut Prakan) and the 26-km Red Line (Bang Sue-Rangsit) are all expected to be completed by 2017.
The other electric rail projects are still awaiting the bidding process or pre-bidding preparation, which includes an environmental impact assessment.
Channarong Buristrakul, president of Khon Kaen Real Estate Association, says better, faster railways will boost the province's industrial sector and logistics.
"There will be new investment in factories and warehouses that will spur new employment and raise people's incomes. This and the relocation of people from nearby or other provinces to work or do business will drive the housing market," he says.
Major industries in Khon Kaen include rice, cassava, sugar and sugar cane. The province is also one of the Northeast's largest logistics centres for retail business.
