Land prices upcountry doubling

– Thailand news selected by Gazette editors for Phuket’s international community

PHUKET: The expansion by leading property firms of their investment in the provinces during the course of last year has resulted in land prices doubling in many areas.

The main provinces and areas subject to the expansion drive are Rayong, Chiang Mai, Khon Kaen, Udon Thani, Phuket, Pattaya, Hat Yai and Khao Yai.

Preecha Ariyanon, managing director of Term Sup Group, a developer in Rayong, said the price of land along the province’s Sukhumvit Road had increased from an average of 20 million baht per rai (0.16 hectare) two years ago to 40mn baht now.

Land in Pluak Deang district has also doubled in the same period, to an average of 10 mn baht per rai.

Local developers are, however, able to compete with the property companies from Bangkok that have expanded into the province, as they had acquired their land before prices started to surge, he said.

For example, Term Sup Group holds more than 4,000 rai in Rayong province, which is valued at an average cost that is still below 20mn baht per rai.

As a result, the company can develop residential projects at a lower cost than new competitors in the local market.

Yesterday, the company introduced a 1 billion baht condominium project, the Wisdom Grandiose Condo, comprising 330 keys, with units priced from 1.6 million baht.

The units will each have 30 sqm of utility space.

Term Sup Group also plans a townhouse project worth between 1.6bn and 2bn baht as its next launch, Preecha added.

Rayong province has recently seen the launch of 10 condominium projects with a combined 1,000 units, worth 4bn baht in total.

One of the projects is a development by Sansiri, which has launched the 600mn baht condo, Nernpra, which will have 328 units.

Low-rise housing is another new market for listed property firms expanding their investment in Rayong.

The Confidence, a subsidiary of Quality Houses, has introduced the 660mn baht Casa Seaside Rayong detached-housing project, while Lalin Property has launched a similar project worth 600mn baht.

Udon Thani province has also seen land prices rising sharply, from an average of 20mn per rai on Pho Sri Road two years ago to between 30mn and 40mn baht now.

This is down to leading developers Sansiri, Asian Property Development, LPN Development, Land & Houses and Supalai all having shown interest in expanding their investments in the province.

Meanwhile, land prices in Phuket and Songkhla have also soared from 2010 levels due to rising residential demand, said Business Housing Association president Issara Boonyoung.

The average price in Phuket rose from 20mn baht per rai to 40mn baht during the period, which like other examples noted, was due to a number of Bangkok and local property firms expanding their investments in the province, he said.

Thanawat Poolsil, president of the Songkhla Real Estate Association, said demand for the development of residential projects was focused on two Songkhla districts: Hat Yai and Sadao.

The price of land in Hat Yai has risen by an average of 10 per cent a year and is now about 50mn baht per rai, while Sadao district has witnessed a similar annual rise to 10mn baht, he said.

— Phuket Gazette Editors