Land fever is back, be careful of falling into speculative traps

Investors are starting to return to the market to hunt for land, causing many suburban areas of Hanoi and other localities to have a "land fever".

Land prices "soar"

In Hanoi, one of the areas with the strongest price increase is the area along the Red River. According to a survey, on Bac Cau and Thach Cau streets (Long Bien district), Hai Boi commune (Dong Anh district)... in recent days, there has been a phenomenon of sudden land price increases. To seize the opportunity to make a profit, many investors are willing to go to the place to collect land, set up "posts", and provide 24/7 consultation to customers at places such as coffee shops, cheap restaurants...

A broker in Long Bien district said that land prices here are showing signs of increasing rapidly from 30 - 50%, about 15 - 30 million VND/m2 higher than at the beginning of the year. Many investors and residents, after getting the information, quickly put down money and rushed here to buy and sell.

For example, a 40m2 plot of land in lane 56, Thach Cau street is being sold for about 2.1 billion VND, equivalent to 50 - 52 million VND/m2. A plot with an alley that can be accessed by cars would cost about 60 million VND/m2.

Not only in Hanoi, but also in many other localities, land prices have skyrocketed. A typical example is the recent auction in Dong Ha (Quang Tri), where a plot of land with a starting price of 1.8 billion VND was sold for 4.5 billion VND.

Or in Bac Giang, the auction of 98 residential lots in the central residential area of ​​Tan Hung commune (Lang Giang district) attracted 1,788 registrations. It is known that the 12,900 m2 land plot has a total starting price of more than 137 billion VND; the lots have an area of ​​about 126 -180 m2/lot, starting price from 1.2 - 2.85 billion VND/lot.

According to batdongsan.com's report, compared to 2020, the level of interest in the land segment increased sharply across a wide area, such as Hanoi increased by 19%, Thai Nguyen increased by 123%, Lao Cai increased by 94%, Hoa Binh increased by 53%, Hung Yen increased by 45%, Bac Ninh increased by 41%, Quang Ninh increased by 40%...

Not only is the level of interest noted, this segment also witnessed a rapid increase in prices. Within 50km of Hanoi, the price of land for sale in the North has increased sharply, such as Bac Ninh increased by 61%, Hung Yen increased by 22%. Within 100km of Hanoi, the price of land for sale in Hoa Binh increased by 106%, Thai Nguyen by 57%.

Be careful of speculative traps

According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, the real estate market will continue to increase in the last months of the year due to the scarcity of supply combined with increased land taxes, prices of raw materials, equipment, and labor costs.

Mr. Dinh also warned that those who want to buy real estate at this time need to carefully research the market before spending money, avoiding rushing into areas where land prices are at their "peak". If they do not research carefully, investors will easily fall into traps and "run aground".

Commenting on the land "fever" in 2021, Mr. Pham Lam, CEO of DKRA Vietnam, said that the land fever is not only due to brokers but also factors such as investors' expectations on both the supply and demand sides. In speculation, investors often want to be ahead of the curve, buy quickly and then resell, then these investors themselves promote the price increase story.

Savills Vietnam believes that the recent increase in real estate prices is mainly due to speculation rather than based on real demand.

To prevent land fever, Architect Pham Thanh Tung said that the public announcement of planning needs to be held in a press conference and implemented seriously to guide information for the people. In addition, according to Mr. Tung, people also need to understand correctly about planning, from general planning to zoning planning, only then can investors be invited in.

According to real estate experts, the nature of the market is that there must be real infrastructure investment for land value to increase, otherwise it is unreasonable for prices to increase sharply without investment. The difficulty in accessing planning information is unintentionally creating conditions for individuals and interest groups to take advantage of planning to speculate and inflate real estate prices for profit.

This is also a difficulty in localities, because to regulate land prices, it is necessary for the participation of ministries and central agencies in removing bottlenecks in project approval to create more supply for the market, because when supply is abundant, prices will automatically adjust.

According to VOV