News of proposed project causes land fever
In recent years, any news of a project proposal by authorities in even very remote villages of Vietnam gives sudden rise to a flurry of activities.
A once sleepy village is quickly swarmed by hundreds of cars, and thousands of people, all looking to benefit from a spurt in land fever, causing land prices to also skyrocket to unreasonable levels.
|News of the expansion of the military airport in Binh Phuoc Province has been used by the land brokers to blow the price.|
Land prices skyrocket
At the beginning of February 2020, the information that a large real estate corporation had a proposal for the local government to implement a project across 800 hectares in Binh Ba Commune in Chau Duc District in Ba Ria-Vung Tau Province caused several real estate dealers and people in general to make a mad rush to buy land in the area.
Along Highway 56 on the section running through the Binh Ba Commune, crowds of people gathered to sell and buy land, which suddenly caused a land boom in Binh Ba Commune. Real estate agents searched for tracts of land for sale, causing prices to skyrocket. The land in Ngai Giao Town, bordering My Xuan, or the land located along Highway 56 in Binh Ba Commune, was targeted for large scale urban projects, and the selling price of land increased by nearly 100% to 200% within a few days.
Before the sudden spurt in land prices, the People’s Committee in Chau Duc District had issued specific information on the project, and at the same time, inspected and reviewed organizations dealing in illegal land divisions, sale of land in the area, and other such violations. This move by the local government quickly dispelled any form of misleading rumours to spread, and after only three weeks the fever to hike land prices cooled down, and crowds slowly diminished.
However, other factors began to play. Land prices began plummeting, households who had sold all their land and had no land for business were left in shock, and those who had not yet been able to sell were sorry. Some family members squabbled because they sold the land without discussing with each other. Conflicts arose in small businesses, and people who received sudden cash in hand took to heavy drinking, shopping or gambling. The whole village collapsed into degeneration.
Lately, Binh Phuoc Province is expected to develop a project to build a dual-use airport, and the realtors are arriving in droves and turning many areas in An Khuong and Tan Loi communes in Hon Quan District into a hotbed of activities. In only about three days, the land prices here have increased from VND100 mil to VND300 mil or VND 400 mil per horizontal meter.
In some better locations, prices touched VND450 mil per square meter. In An Khuong Commune, Tan Loi, and neighboring areas where the airport project is expected, land prices have increased dramatically. Some plots of land that are about 1.5 km away from the location, and priced at VND150 mil to VND200 mil have shot up by billions of dong in just a few days. One land plot was traded for nearly VND10 bil, and was re-transferred back and forth among several people, and the last person pegged the price at VND28 bil.
There are three types of information that cause land prices to skyrocket. Intended circulation of fraud information; some unrealistic overblown schemes announced by authorities; and actual information on possible investment by professional and credible enterprises.
When large projects such as industrial parks, airports, and harbors are planned for construction in rural areas, they offer an opportunity to the local people to change their lives forever. People can be part of the development activities, such as selling of land, trading of commodities, vital services, and make good financial deals.
This was true when real projects such as Long Thanh Airport, and Aqua City urban area were announced. However, there are also many projects that prove to be bogus and lack credible information. Such bogus projects can be termed into three categories, and there are three types of information that cause land prices to skyrocket. Intended circulation of fraud information; some unrealistic overblown schemes announced by authorities; and actual information on possible investment by professional and credible enterprises.
As a concrete example of the first type of information, the Alibaba Company of Nguyen Thai Luyen, with 58 ghost projects in Dong Nai, Binh Thuan, and Ba Ria-Vung Tau, said to appropriate VND2,373 bil of 3,924 people, is one model. The second type of information of unrealistic overblown schemes announced by authorities at some vague conference, of upcoming industrial parks, or airports, or of a provincial leader surveying land for future projects, has an example when a certain association spoke of three very lucrative proposals to develop Can Gio urban area, Northwest Cu Chi urban area, and the urban areas along the Saigon river. People in Ho Chi Minh City where just left to dream and speculate on these projects.
In theory, these projects sound realistic, but are actually only suggestions. Dreams are sold to people, pre-feasibility studies are sent out by departments, and proposals made on behalf of investors, and newspapers jump in to write articles. The news is full of maps and diagrams, and interviews with people. All this frenzy then leads to a false dream of development and a surge in land fever. This is what happened in the case of the project announcement of a dual-use airport in Binh Phuoc Province, where investors and the local people were led into believing fake news as real.
Perhaps authorities in the Government in major cities like Hanoi and Ho Chi Minh City need to re-evaluate and issue regulations against creating undue excitement in the minds of people. Local people cannot know what is the intended desire of an individual leader, or differentiate between a suggestion or an actual proposal for a project.
Investors pourin money into real estate seeking profits from land price increases have not attached much importance to the surplus value from production and business, which seriously affects the economy, experts say.
Authorities in Hon Quan District in the southern province of Binh Phuoc are warning buyers to be careful about land transactions, saying the proposed airport in the district, which has not been approved, has caused a “price bubble”.