As new Bangkok Governor Khun Chadchart Sittipunt continues to work on implementing his ambitious policies, many are wondering if these will impact property development in the Thai capital. He has a background in real estate having served as CEO and Managing Director of Quality Houses for nearly four years in addition to working for Land and Houses.
CBRE Thailand believes this experience could be a boon for the property market. The consultancy added early policies have emerged from Khun Chadchart’s office that show knowledge of real estate and urban development aspects of Bangkok.
“One policy that will have an obvious impact on urban development, if it is carried out, is the policy to revise the city planning and building regulations to meet current market demands. Many regulations are outdated and have not taken into account current real estate development, hindering the systematic growth in urban planning,” Khun Rathawat Kuvijitrsuwan, Head of Research and Consulting, CBRE Thailand, stated.
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Affordable housing in the capital is also on the new governor’s agenda. Recent graduates in particular face challenges since the bulk of their salary is spent on rents or mortgages as well as commuting. This negatively affects their ability to save or have disposable income.
“One of Khun Chadchart’s policies is to create what are called housing incubators, where fresh graduates aged 18 to 25 will be able to rent at a lower price for five years. Such a policy opens up the opportunity for this group to save more and build a better financial standing for themselves,” Khun Rathawat said.
He continued, “The plan is to convert old buildings which are no longer commercially usable and buildings waiting to be developed in the CBD into these incubators. However, this will have a direct impact on the rental market across the city, increasing competition and likely pushing down achievable rents for projects that target this group of tenants.”
According to CBRE Thailand, the early polices announced by the new governor are encouraging, although more time is needed to accurately judge these. One noticeable change is a transparency of budget management and district-level policies that identify problems waiting to be fixed across the city which the consultancy hopes the private sector backs moving forward.
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