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Bangkok City Plan expected to hike prices

By on Jul 05, 2012 in Property News

Property developers are concerned that if the Bangkok City Plan committee does not revise the draft of the new plan, set to take effect next May, the amount of land available for residential development will be further restricted, with prices in some locations more than doubling.

They expressed their concern at the “Who Will Benefit from the New Bangkok City Plan?” seminar, held yesterday by the Thai Condo-minium Association.

The latest Bangkok City Plan from the Bangkok Metropolitan Administration (BMA) is designed to reduce the capital’s population density under the “Green City” concept, said Pruksa Real Estate chief executive Thongma Vijit-phongpun.

As a result, the draft contains additional conditions on the construction of residential buildings. It further regulates the size and floor-area ratio of residential properties in relation to the width of the road – such as 6 metres to a maximum of 30 metres – which would make it more difficult for property firms to develop homes at their present cost levels, he said.

“We have to study the new Bangkok City Plan before making a decision to buy land at this time, while [the process for] our existing land will also have to be speeded up to apply for construction permits before the new plan comes into effect, because of we cannot know whether our land matches the new requirements,” he added.

LPN Development managing director Opas Sripayak said that if the new Bangkok City Plan were to come into effect in its current form, the company would no longer be able to develop condominiums priced up to Bt1 million in some locations. This is because some land prices would rise in accordance with the new limitations on where residential construction can take place, he said.

The City Planning Department of the BMA has to revise the draft to focus on how to develop the capital into a sustainable green city in cooperation with agencies such as the Transport Ministry, which develops the country’s infrastructure, and the city planning departments of suburban provinces such as Nonthaburi, Pathum Thani, Samut Prakan and Nakhon Pathom, said Associate Professor Assawin Pichayothin, a lecturer at the architecture faculty of Chula-longkorn University.

He said the philosophy behind the new draft is to reduce population density in Bangkok by targeting that more people will be able to live in the suburbs and take public transportation to their places of work in Bangkok.

This would reduce Bangkok’s density, but would create a new problem for suburban provinces, which do not currently have sufficient infrastructure to support a high-density population, he added.

Thongma said this would also force property developers to expand their investment outside of the central business districts of Bangkok, with some locations being in agricultural areas. That would not respond to demand or tie in with the country’s development in the long term, he warned.

Supalai managing director Atip Bichanond said: “If the Bangkok authorities needed to develop the city into a green, sustainable city, it would open the opportunity to develop high-rise residential buildings with open space on the land for green areas, as in Singapore, Tokyo and other cities around the world, but it would mean more people would stay outside Bangkok and spend more on transport” to get to work.

The date of expiry of the current city plan has been extended to May 15, 2013. The draft of the new plan was published in May and is open for comments by affected land-owners until August 21.

Interested parties can submit their comments to the BMA’s City Planning Department.

Source : The Nation 5 July 2012

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