Condos track transit progress

Developers continue to seek out highpotential locations along new train routes

New mass-transit lines remain one of the dominant factors influencing the property market in Bangkok, especially where condominiums are concerned. Because land prices tend to jump in areas where new lines are planned, and rise even more as construction progresses, developers need to maximise returns. That rules out single detached houses and townhouses in most cases, leaving condominiums as the best option.

If we look at four major lines — Blue, Red, Green (Silom) and Green (Sukhumvit) — in various stages of planning, construction and operation, we tend to see a small number of condo launches in areas where new routes are announced, but the pace picks up dramatically once construction actually starts.

Experience over the past two decades shows that transit plans can change, and delays of two to three years in the start of construction are the norm. For that reason, developers like to see clear evidence of shovels in the ground before they commit to new projects.

Between 2014 and the end of 2017, many new condo projects were launched in areas where mass-transit construction had already begun, particularly in spots where land prices were still lower than in the inner city area. Land prices were higher in some areas along new lines where commercial and other facilities were already abundant.

The most popular locations have been along the Blue Line, given that it passes through some established areas on the west side of the Chao Phraya River. These areas still have a lot of vacant land plots suitable for development, and also have the advantage of being home to a number of government offices, hospitals, retail centres and schools. New condominium launches from 2014-17 in the area totalled 24,828 units, significantly higher than along other lines.

The Green (Sukhumvit) line was second with a total of 16,350 new units launched. Most are located around the Samrong and Erawan stations, which are considered close enough to Bangkok and offer a builtup urban environment. However, sales at buildings around these two stations have been low compared with the area around the Bearing station closer to the city.

An increasingly popular location in the past year is the area along the Green (Northern) line. Many new condominiums have been launched but most are on a smaller scale than their counterparts along the Blue Line. Many more are planned in 2018 and beyond.

Significantly, most new developments in this area are commanding prices of more than 100,000 baht per square metre. This reflects the presence of a variety of facilities and the fact that commuters can reach the central business district via the BTS without having to switch trains. The nearby Phahon Yothin Transport Centre, under construction, gives the area additional appeal.

The Red Line has not been as popular as others, partly because it is taking shape alongside the existing State Railway of Thailand (SRT) local line. Most of the land near the line is owned by the colossally indebted SRT and not available to private developers. The few condos that have sprouted in the area are not close to the planned stations.

Activity has also been limited along the Orange, Pink and Yellow lines as construction has not started. Many developers are looking to acquire sites where they can build once they are assured that mass-transit construction is actually going to begin.

Surachet Kongcheep is a veteran local property market expert. He can be reached at surachet.jock@gmail.com