Major projects languish as speculators abandon land plots
Property speculation and a lack of roads and facilities such as hospitals, schools and shopping malls have led to a number of so-called “deserted towns” in real estate hotspots in HCM City.
In recent years, a number of huge residential and urban projects have attracted investment in districts 9, 2, 12 and Can Gio District.
However, most of the areas, located in spots where so-called land fever has occurred, are empty or unfinished, especially in District 9.
In 2005, District 9 in the eastern part of the city had hundreds of projects attracting many investors, most of whom were land speculators.
However, many of the projects remain unfinished or those that have been completed have few occupants.
The Dong Tang Long Urban Area project in District 9 was one of the most promising projects for speculators at the time.
Nguyen Van Thang, a broker for the project told Viet Nam News: “You should never wait to invest in real estate, but instead you should buy the property and wait to sell it later at a much higher price.”
The Housing and Urban Development Investment Company (HUD) invested more than VND1.1 trillion (US$47 million) in the Dong Tang Long Urban Area for site clearance, internal roads, and electricity and water infrastructure.
However, after nearly 15 years, the project has only 10 villas, while hundreds of land plots are uninhabited.
Similarly, the Real Estate 10 Company invested more than VND600 billion for site clearance and internal road infrastructure for the Bac Rach Chiec project in Phuoc Long A Ward in District 9 on an area of 82ha.
However, due to a lack of connecting roads and facilities such as schools and hospitals and supermarkets, the area has become a parking area for container trucks.
Another project is the Khang An residential project in Phu Huu Ward in District 9, invested in by Khang An Real Estate Investment JSC.
Despite a relatively prime location near the Long Thanh – Dau Giay expressway, the 116,000-sq.m residential project remains deserted.
Though many of the villas and houses have been completed, they have been abandoned for a long period.
Meanwhile, the owners of the villas and houses have blocked the gates or entrances to the properties to prevent drug addicts from entering the property, where they shoot up. This has become a common problem in such deserted areas.
The situation is the same in District 2, which is planned to become a new urban area in the eastern part of the city. Only a few projects include residents in buildings in good locations, with current prices from VND50 - 70 million per square metre.
Areas such as Thanh My Loi and Binh Trung Dong, which used to be a busy market for land speculation, are now just an immense field with few residents.
In addition, the Saigon SunBay sea encroachment project in Can Gio District, invested in by the Can Gio Tourism Urban Joint Stock Company, stopped developing after it completed site clearance.
With a total investment of $1.5 billion, the project covers a total area of 600 hectares, of which 400 hectares are land for construction of tourism and high-end residential areas; and 200 ha for a private beach.
Under the original plan, the project would include hotels, resorts, shopping malls with entertainment services, and luxury apartment and villas serving 31,000 residents and tourists.
The project was expected to be finished by mid-2016 and take five years to build a system for sea encroachment and other technical infrastructure.
Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, said it was important to develop connecting roads to project areas and invest in facilities to serve residents.
According to Le Hoang Chau, chairman of the HCM City Real Estate Association, buyers of land plots are mostly speculators.
“Buyers with real demand should wait for prices to stabilise and ensure the project’s legitimacy before making a payment,” he said.
Last year, real estate prices across HCM City increased sharply.
The eastern part of the city was a land fever hotspot, with land prices in districts 2, 9, Thu Duc, Nha Be, Binh Chanh and Can Gio all surging by 50-100 per cent compared to the end of 2017.
Prices in District 9 rose from 60-100 per cent by the middle of the second quarter last year compared to the same period in 2017.
Land in some areas of District 2 was priced at VND140-160 million per square metre, a peak price for the area.