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The regulation prohibits buildings higher than 23 metres or seven- to eight-storeys in areas 500 metres away from the palace: the stretch from Phetchaburi Road to the eastern railway station, Ratchapralop Road to Rajdamri Road, and the Police Hospital to Rajamangala Institute of Technology on Uthen Thawai campus till Banthadthong Road.

In areas 300 metres from the palace, buildings no higher than 16 metres will be allowed. They comprise areas north of the palace, starting with Soi Phya Nak on Phetchaburi Road; areas falling between the Indonesian Embassy and Alochon canal to the east of the palace; the stretch between Alochon canal and Rama I Road, located to the south of the palace; and, western properties on the Alochon canal to Phetchaburi 12 route through Soi Kasemsun 2.

If the regulation comes into effect, new residential projects will be affected. Construction of additional storeys on existing buildings will also not be allowed, a Bangkok Metropolitan Administration source said. He said the regulation has been approved by the Bangkok Metropolitan Council and is awaiting the governor's nod.

Harrison vice president Kitisak Jampathippong said if the regulation is approved, land prices in the areas in which it would be effective would fall between 40 and 50 per cent. Presently, the prices range between Bt300,000 and Bt400,000 per square wah. Locations close to the Siam Centre and MBK Shopping Centre command prices between Bt600,000 and Bt1 million per square wah.

Asian Property Development senior vice president Poompat Sinacharoen said the regulation would put an end to high-rise projects in the area, which may send the demand falling.

Areas around the palace are popular with developers when it comes to luxury-condominium projects and shopping centres because of their proximity to the central business district.

Properties around Siam Paragon are valued between Bt650,000 and Bt700,000 per square wah, the Agency for Real Estate Affairs said.