Low-rises cut for Purple Line
Nonthaburi’s new city plan, which will bar the construction of low-rise buildings on small roads, should help drain the existing condo supply along the Purple Line linking Nonthaburi and Bangkok, says the Nonthaburi Real Estate Association.
President Lertmongkol Waravenuch said some regulations related to construction in the new Nonthaburi city plan, expected to take effect in mid-2018, will become more stringent.
Under the new city plan, land plots on sois or small roads narrower than eight metres and situated farther than 500m from a mass transit station cannot be the location for low-rise buildings with a height of 23 m or lower, or not more than eight storeys and a total construction area of smaller than 10,000 square metres.
Nonthaburi allows this building size to be constructed on plots situated farther than 500m from a mass transit station and on a soi or small road at least six metres or wider.
“The local government [of Nonthaburi] wants to make the city well-organised to keep with the city’s fast growth, driven by the development of mass transit lines and new transportation routes,” Mr Lertmongkol said.
Floor area ratio in the new city plan will also be reduced from 10:1 all over the city to lower than 8:1, depending on zones in the province. These changes in the new regulations will push development costs upwards, making condo prices higher.
According to market research conducted by SET-listed condo developer LPN Development Plc, locations along the Purple Line were third highest in terms of condos launched last year, with six projects and a total of 4,790 units.
However, the sales rate during the launch period dropped to 48% from 67% in 2015.
Mr Lertmongkol said the sales rate of the existing condo supply in locations along the Purple Line was between 60-80%, but there is a lot of supply available in the market because of a spike in banks rejecting mortgage applications.
“Despite that, some projects had a sales rate of up to 80%, they could transfer only less than half as customers failed to get a mortgage loan approval,” he said.
According to SCB’s Economic Intelligence Center, a number of remaining units priced 1-3 million baht, the same segment as those along the Purple Line, rose to 59% of the total in mid-2016 from 50% at the end of 2014.
“The mass transit fare for those living near the line and working in the city remains high,” Mr Lertmongkol said.