Merging provinces not only increases land prices, but also reduces them in some places.

Mr. Le Van Binh, Deputy Director of the Department of Land Management (Ministry of Agriculture and Environment) commented on the information about merging administrative boundaries of provinces and cities that is causing a stir in public opinion, especially among real estate investors.

Mr. Binh assessed that the merger of provinces and cities with changes in administrative boundaries will impact the real estate market.

Citing the case of Ha Tay returning to Hanoi before, Mr. Binh said that moving from a province to the capital would certainly have an impact on people's psychology and would attract investors.

However, according to the Deputy Director of the Department of Land Management, the merger will not only increase real estate prices but may also decrease them in some areas.

He cited that in the past, people often thought that the place where the People's Committee headquarters at all levels was located was the center. There, land prices were always higher than other areas due to better investment in infrastructure. Currently, there are many rumors about the merger of 3-5 communes. Due to psychological impact, the place that becomes the new headquarters will have land prices pushed up, but the places that are no longer the center will have land prices reduced. Similarly, when provinces are merged and are no longer the center, prices may also decrease.

“The real estate market is also a psychological market. Real estate investors will be more excited when there is more information about planning and new urban development in merged areas. They will take advantage of rumors about the policy of merging provinces and cities in the 'gestation' period to inflate land prices for profit.

However, this fever is only a spontaneous, temporary phenomenon that lasts for a short time. Investors today do not easily follow such rumors," Mr. Binh analyzed.

Regarding the issue of whether real estate projects that are undergoing legal procedures or have not yet calculated land use fees will be affected by the merger of land boundaries, Mr. Le Van Binh said that the current land price list is relatively stable, divided into many areas in the locality, so when determining specific prices, it will be based on those areas. If there is any change, there must be a plan.

“Issues of changes in administrative boundaries and urban scale will certainly impact real estate. But whether the impact is positive or not depends on each specific case. Because real estate prices depend on many factors such as planning, investment attraction process, planning implementation process...

“If there is no planning and businesses do not invest, it will not have much impact on real estate prices,” said Mr. Binh.

A series of localities warn of "virtual land fever"

According to records, the price of land for sale in many places such as Hung Yen City, Van Giang District (Hung Yen), Viet Tri City, Ninh Binh City, Bac Giang City, the border area of ​​Quang Nam - Da Nang... has increased by 5 - 15% compared to the end of last year. Many landowners even increased the price by more than 20% following the "wave" of mergers.

Faced with the above situation, many localities have warned of the risk of "virtual land fever".

Recently, the People's Committee of Quang Nam province requested the provincial police to investigate and handle organizations and individuals showing signs of fraud, manipulation, and instability in the real estate market after the merger news.

In Thai Binh, the provincial police also advised investors to stay calm and not believe rumors about the merger of administrative units. If they discover fraudulent or market manipulation, investors should promptly report it to the nearest police agency.

Ninh Binh province also assigned the provincial police to inspect real estate transactions, especially in Hoa Lu city, to verify the situation of unusual price increases.

Similarly, authorities of the provinces of Phu Tho, Ninh Binh, Tuyen Quang, Bac Giang... simultaneously advised people to be careful and avoid falling into the "trap" of inflated land prices.

Immediately after the authorities intervened and issued warnings, the real estate market in many provinces quickly "collapsed".