stricter limits on larger condo projects are coming into effect soon, so condo developers are rushing to get construction permits now
The Nation
Feb 10, 2012
Condo developers on the fast track
To escape limitations under the new law which goes into effect in 2013, many firms are pressing ahead with their plans this year
Property firms have speeded up developing new condominium projects in Bangkok before the new Bangkok city plan becomes
effective on May 15, 2013.
The new city plan will have provisions that limit the construction of condominium blocks.
For example, the new city plan says that high-rise construction with utilisation space of
more than 10,000 square metres in a middle-density population area (
orange colour code in the new city plan), in the central business districts will have to be located on a
main road that is wider than 16 metres.
In the current city plan, property firms can build high-rise residences with space utilisation of
more than 10,000 square metres on a
road only 10 metres wide.
The rule would mean that property firms can build high-rises on the main road only. They cannot build on land in a sub-road or in a soi.
The
exception is for locations in a
radius of 500 metres from the Skytrain and underground train junctions.
Meanwhile, at locations termed high density population areas (
yellow colour) space utilisation for high-rise residences has been cut from not more than 10,000 square metres to
not more than 2,000 square metres on a road that has to be
wider than 10 metres.
Business Housing Association president Issara Boonyoung said that the new regulations would directly affect property firms who now own land located on a road less than 10 metres or 16 metres wide. They will not be able to build their condominium projects once the new city plan is implemented. This has forced them to apply for construction licence and build the projects before the plan goes into effect next year.
According to a survey by The Nation early this week, most property firms plan to launch their new condominium projects on Sukhumvit Road, Ratchada Road, and Lat Phrao Road this year. This will serve market demand and also free them from the constraints of the 16 metres wide road rule. Some of them are also redesigning their projects to be in step with the new rule.
For example, Pruksa Real Estate has launched Plum Condominium on Lat Phrao 101, worth about Bt700 million, by designing the project to be a low-rise condominium having only five floors over eight rai of land. LPN Development plans to launch three new condominium projects on Sukhumvit Road. Sansiri plans to launch 19 new condominium projects worth Bt19 billion this year, some of them located on Sukhumvit Road.
KPN Group Corporation Co introduces the latest condominium project, the Capital, on Ekamai-Thonglor Road.
Effect on land price
The president of the Thai Condominium Association Thamrong Panyasakulwong said the new city plan would limit the number of condominiums in the central business districts. This also will impact on land price inside the soi and at locations where the main road is less wide than stipulated.
"We believe that this will directly impact small and medium firms who develop condominiums in smaller roads," he said.
The Agency for Real Estate Affairs said that land prices at some locations will rise and may drop at some locations.
Rama 3-Klong Toei will drop from an average Bt150,000 per square wah to Bt114,56 per square wah, a 24-per-cent fall;
Sukhumvit Road between Soi 1-55 may drop from Bt200,000 per square wah to Bt152,755 per square wah, a 24-per-cent fall;
Phahonyothin Road may drop about 14 per cent from an average Bt200,000 per square wah to Bt171,688 per square wah.
On some locations such as Srinakarin Road, Petchakasem and Bang Na the land price may increase 10 per cent.
This also will impact the price of condominiums, which may go up as the locations where condo projects can be developed would be limited, the research said.
The scenario has led to most property firms speeding up their new condominium projects this year.
2
kay:
