Big businesses pour billions of dong into land purchases in Da Nang
While other land markets are hot, Da Nang remains very quiet, prompting many investors from Hanoi and HCM City to collect land plots in advantageous positions in "bottom fishing" deals.
Hoang Van Tam from Hanoi frequently flies to Da Nang on weekends to seek investment opportunities there. His business as a medical equipment trader provides a stable financial source and he wants to set up a branch in Da Nang.
After a period of seeking land for his office, Tam has a better understanding about the local real estate market. Realizing that prices are relatively good, Tam decided to buy two land plots valued at VND3 billion.
According to Tam, Da Nang’s land is inexpensive at this time. That is why many investors are flocking to buy land as they believe the possibility for recovery in Da Nang after Covid-19 is very high.
“It is now the time for investors to come back to the market. But they need a medium-term vision,” he said.
“However, the game just fits those who have powerful financial capability and don’t have to use borrowed money,” he said.
Do Manh Cuong, another investor from Hanoi, is also seeking to buy land in Da Nang. He said when the market cools and the prices go down, it is time to buy land in anticipation of a new resurgence.
The sharp land price fall has helped eliminate the groups of speculators who focus on surfing investments, causing a real estate bubble. The price fall has also helped people more easily access land and houses at more reasonable prices. This was impossible in a booming market.
According to Cuong, the land hunt at this moment is understandable. But the land will be more expensive in the future when the tourism market recovers.
Many real estate trading floors in Da Nang have resumed operation after Tet holiday. On real estate forums, the average land lot offered is VND100 million more than in the pre-Tet period. The demand for land in Da Nang has begun to rise.
|Many real estate trading floors in Da Nang have resumed operation after Tet holiday. On real estate forums, the average land lot offered is VND100 million more than in the pre-Tet period. The demand for land in Da Nang has begun to rise.|
Nguyen Van Dinh, deputy chair of the Vietnam Real Estate Brokerage Association, said land is investors’ main interest because its value is lower than townhouses, while those who have demand for accommodation are interested in affordable apartments. Market demand may bounce back anytime.
He went on to say that Covid-19 has been controlled well in Vietnam, so the Da Nang real estate market has recovered gradually in some segments, including land and affordable apartments.
Seeking new way
Rapid-fire good news is supporting the Da Nang’s real estate market. The city has attracted a lot of large investment projects and is expected to become a special city of Vietnam. When the pandemic ends and tourism is stable, Da Nang’s land prices are expected to rise.
Da Nang authorities have vowed to regain the city’s position after the pandemic. The year 2021 has been defined as the year for recovering growth and fostering economic development.
The success in controlling Covid-19 has helped turn Da Nang into a safe and attractive destination for the international community, thus paving way for FDI capital to flow into Da Nang.
According to Da Nang Planning and Investment, municipal authorities in 2020 licensed 87 foreign invested projects with total registered capital of $129.177 million. Meanwhile, 20 projects registered to expand investment with additional capital of $80.057 million, and 105 foreign investors bought into Vietnam’s businesses, at $3.63 million.
The Da Nang People’s Committee has released a decision on adjusting the list of key projects that need investment in 2020-2025. The 57 projects include transport infrastructure with capital of tens of trillions of dong.
The Government Office has issued a document showing Prime Minister Nguyen Xuan Phuc’s opinion on the proposal to build Da Nang into a financial center in the region.
The Prime Minister has approved the amendment of Da Nang's overall planning to 2030. Da Nang will be built into a large socio-economic center of Vietnam and Southeast Asia as a hub for startups, innovation, tourism trade, finance, logistics, high technologies, IT and supporting industries.
Da Nang is also developing a night-time economy and tourism development projects.
It is implementing a plan on restoring tourism and demand stimulus activities in 2021, focusing on attracting domestic travelers and preparing to receive international travelers after it is allowed by the government.
Nguyen Duc Lap, head of the Real Estate Research and Training Institute, said the current real estate prices are close to the bottom levels that were seen in previous cycles. Though Covid-19 is an unpredictable variable, the recovery of Da Nang land prices is expected.
A leading Vietnamese real estate developer has reported an additional loss of tens of billions of dong, raising its total loss in 2020 to VND500 billion, though land prices are escalating all over the country.
Land prices in some areas skyrocketed after rumors spread about new airport projects, helping some investors to get rich but causing many others to go bust.