The land price index in Greater Bangkok has seen slow growth as land transactions dropped after some landlords divested their plots to minimise the impact of the pandemic on their core business.
Kessara Thanyalakpark, managing director of SET-listed developer Sena Development Plc, said land prices never decline even during the pandemic or after the land and building tax became effective early last year.
"Since after the 1997 financial crisis, financing a land purchase alone without any project being planned for development on it was not allowed as the Bank of Thailand wanted to prevent land speculation," she said.
This means those accumulating or owning land today do not have outstanding loans to pay.
Land deals or transactions these days are mainly derived from other reasons than being forced to sell to repay debts, she added.
"Land prices increasing at a slower pace was caused by divestments," said Ms Kessara. "Some landowners sold some pieces of their land bank to finance their core business which was severely hit by the pandemic."
Some plots of land which were shared by many owners -- mostly siblings -- were offered for sale with an attractive deal given to buyers after some of them wanted to generate cash to survive. This was a reason for the slow rise in land prices, she said.
Two months ago, SET-listed developer Nirvana Daii Plc sold a 4.5-rai plot on Rattanathibet Road near the Purple Line's Bang Rak Yai Station as it dismissed a condo development plan on that plot.
In the second quarter, it booked 272 million baht from the sale of a 10-rai plot on New Krungthep Kritha Road or Srinakarin-Rom Klao Road to diversify its portfolio to other locations.
According to the Real Estate Information Center (REIC), the price index of vacant land in Greater Bangkok rose slightly to 332.8 in the second quarter of 2021, up 2% from the first quarter and 7.8% from the second quarter last year.
Vichai Viratkapan, REIC's acting director-general, said the year-on-year increase was at a slower pace as it was lower than the five-year average of 17.7% during 2016-20.
Mr Vichai said land prices in locations in Nong Khaem and Bang Kae districts where a mass transit line would pass saw the highest growth for three consecutive quarters as they are connected to the Blue Line section of Hua Lamphong-Bang Kae.
Land prices in locations including Bangkok Yai, Klong San, Phra Nakhon, Huai Khwang and Bang Kapi districts also surged as they are near newly-operated mass transit lines such as the Gold Line and the Blue Line from Hua Lamphong to Tha Phra.
Locations along the MRT saw the third largest rise in the land price index in the second quarter, led by Bang Sue and Chatuchak districts where an increase in land price was driven by the Bang Sue Grand Station.
The future Dark Red Line from Bang Sue to Hua Lamphong boosted land prices in Pomprap Sattruphai district which recorded consecutive rises, said Mr Vichai.