An aerial view of buildings in Bangkok. Mr Vichai pointed out that the sharp contraction in the property market in the first half of the year was due to several negative factors.

The price index of vacant land in Greater Bangkok declined in the second quarter of this year compared to the first quarter, primarily due to the slow economic recovery and a downturn in the residential market.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the drop in the land price index was likely due to developers pausing land purchases.

"Owning land incurs costs due to the land and building tax," he said. "It becomes a burden if the land is purchased when it's not the right time to develop or launch a project, especially when market sentiment is unfavourable."

He said the sharp contraction in the property market in the first half of the year was due to several negative factors, including the slowing recovery of the economy and investment, as well as the revocation of the easing of loan-to-value limits.

There was also a high level of household debt, standing at 90% of GDP, while interest rates were high and lending rules had become stricter.

All of these factors resulted in reduced affordability and borrowing capacity of prospective homebuyers.

In the second quarter of 2024, the price index for vacant land in Greater Bangkok was 398.2, down 2.4% from 407.8 in the first quarter, but up 5.8% compared to the second quarter of 2023.

This quarter-on-quarter decline in the second quarter of 2024 marks the third quarterly drop since the REIC began tracking the price of land in 2012.

The first drop occurred in the first quarter of 2021, with a decrease of 2.2% from the fourth quarter of 2020, mainly attributed to the pandemic, which emerged in late 2019.

The second drop was in the second quarter of 2023, with a decline of 2.4%. This decrease followed a series of interest rate hikes, which occurred five times between August and September 2022 and January and March 2023.

Mr Vichai added that the year-on-year rise in the second quarter was lower compared to the pre-pandemic average increases over five years from 2015 to 2019, which had an average year-on-year increase of 14.8%.

"This year, there have been no cuts in the land and building tax," he said. "Many developers have also shifted their focus to areas outside Greater Bangkok such as Phuket, which has resulted in a decline in demand for land in Greater Bangkok."