Speculators hunt district land plots
Speculators hunt district land plots
A plan to upgrade two districts in Ho Chi Minh City has caused yet more land price speculation, with nearly $17 billion in funding committed and around $500 million already licensed.
The commitments were made at an investment promotion conference on April 12, in which a range of property projects was submitted for land plots in the districts of Hoc Mon and Cu Chi. Among those involved are CMIA Capital Partners, CK Asset Holdings, Hyundai E&C, and other domestic groups such as Sovico, Hung Thinh, and Dat Xanh.
Proposals have also been made to establish a northwest city that includes Cu Chi and Hoc Mon, in parallel with upgrading the two districts as well as those of Binh Chanh, Nha Be, and Can Gio.
In recent weeks, Nguyen Van Long, a resident in Thu Duc city, and his friends have been constantly visiting Hoc Mon and Cu Chi to buy land after learning that Ho Chi Minh City authorities are preparing to develop towards the north of the city, which has been dormant in terms of such development for years.
Last week, Long found a landlord who wanted to sell an agricultural land plot located in Phu Hoa Dong commune of Cu Chi at the price of $26,000 per 1,000 square metres. Long decided to mobilise capital from friends, but after only three days the price skyrocketed to over $56,000. Long decided to pass on this investment in the concern that he would not gain any profit with such a high price.
Another agricultural land plot of the same size in An Nhon Tay of Cu Chi district is even being quoted at $143,500, double compared to this time last year.
Nguyen Thi Sen, a resident in Tan Hiep commune of Hoc Mon district, said that many people have visited in the last three weeks to buy land, even though much of it is only agricultural. “All of those speculators just try to buy so they can sell for profit, or they plan that when the incoming investors appear, they will be compensated with the much higher fees,” Sen said.
Nguyen Hoang, director of the Hoang Minh real estate trading floor, said that recent real estate prices in suburban districts of Ho Chi Minh City such as Nha Be, Binh Chanh, Cu Chi, and Hoc Mon are relatively low compared to those in Lam Dong, Dak Nong, and Dak Lak, which have increased 200-400 per cent compared to the same period last year.
“With positive information released recently on public and private investment into those districts, the interest in these districts is understandable,” Hoang said.
However, experts also warn that the uncontrollable hike in prices will lead to a real estate bubble. Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said that many speculators are using pieces of information from investment promotion meetings, but general infrastructure improvements also naturally lend a hand to higher prices.
“Improved transport infrastructure or the promotion of development in any area will lead to land price hikes. However, buyers must think twice about the master plan of that area and the potential of transferring from agriculture to residential land,” Chau said. “We have warned many people, but some remain obsessed with high-risk investment. Those who intend to buy agricultural land in these areas should be more careful or they will lose money.”
According to statistics from Cho Tot website, Cu Chi district has had the highest number of searches for land information in Ho Chi Minh City since February, which is twice as high as that of Thu Duc city.
Meanwhile, VNDirect expects that land prices in the vicinity of Ho Chi Minh City will continue to increase impressively in 2022 thanks to the expansion of highways to the west and coastal areas, with ongoing infrastructure projects such as Ben Luc-Long Thanh Highway, Dau Giay-Phan Thiet Highway, and Long Thanh International Airport.
