It is a mistake to think that land prices will decrease during the economic crisis. In the era of COVID-19, the real estate business has to face negative factors from many sides. However, 2022 has already brought a lot of difficulties: 100% property tax was returned, the spread of a new strain of coronavirus.
A new complication is the Russian-Ukrainian situation. The whole world is shocked by the problem of high oil prices. What will affect the prices of many products, including construction. The price of land also continues to rise. To date, the number of properties in the city center has increased by an average of 10% per year.
For example, the development company Sansiri bought land and buildings on Sarasin Street at a price of 975,000 baht/m2. This became the most expensive land transaction in Bangkok's history, breaking the record of the LangSuan land plot, with a price of 775,000 baht/m2 in 2017. According to the actual transactions made in the past, it was found that in the Sathorn area after the transaction for the Australian embassy, the average price was 362,000 baht/m2 until the end of 2021. Recently, some land deals worth more than 500,000 baht/m2 have been concluded. In Sukhumvit, the average price increases by 10% per year. In Thonglor, some land plots were sold at new record prices of more than 715,000 baht/m2, over the past year the price has fluctuated between 400 - 625,000 baht/ m2.
Land prices in Bangkok have increased exponentially over the past few years. But developers see the possibility of making a profit in the future, even though some plots of land have set very high prices, hoping to make a good profit after the project development.
At the moment, there are two land prices on the real estate market: «estimated value for taxation» and «actual price» or market price.
The Ministry of Finance will announce a new rate every 4 years, but due to the situation with COVID-19, the 2016 assessment rates were adopted for the duration of the pandemic. The Ministry of Finance is preparing a new land assessment, which will be announced in 2023. The estimated value will only increase, which gives reason to believe that the actual price will also only grow.