A large real estate group has recently sent a document to the Long An People’s Committee about its decision to stop the planning of a project  in Thanh Hoa and Binh Duc communes in Ben Luc district.

real estate market,vietnam property market

After the Long An provincial authorities released a document on the group’s surveying, planning and development of the new urban area project in 2018, the real estate developer carried out a market survey to find suitable implementation.

However, because of the Covid-19 epidemic, which has had a serious impact on socio-economic development, Vingroup decided to stop research on project planning.

This was bad news for many investors. Investors, who had heard that Vingroup, a big real estate developer, would develop the project, had flocked to the communes to hunt for land in anticipation of local economic development once the huge project was implemented.

But now, as the investor has canceled the investment deal, they are ‘caught in a shoal’.

Vingroup has also recently proposed stopping research for the development of a golf course, entertainment and tourism center complex, and 5-star hotel and villas in An Sinh commune in Dong Trieu Town in Quang Ninh province.

In Vietnam, investors tend to make investment decisions based on information about the operation of big enterprises. When realtors decide to develop projects in particular localities, the land prices there escalate daily and every hour, even when the projects are still on paper.

In Vietnam, investors tend to make investment decisions based on information about the operation of big enterprises.

When realtors decide to develop projects in particular localities, the land prices there escalate daily and every hour, even when the projects are still on paper.

They believe that the projects will help the local economies develop, and if so, local land prices will increase in the future. Buying land today and selling land in the future, when the prices escalate, will bring them fat profits.

Seven months ago, a ‘land fever’ unexpectedly flared up in Binh Ba commune in Chau Duc district in Ba Ria – Vung Tau province, following the news that Vingroup would develop an 800 hectare project along Highway No 56.

The local real estate market was so hot that one land plot changed hands 3-4 times within one day. The land prices in some advantageous positions soared by 6-7 times.

However, the market cooled down just two weeks later after local authorities gave recommendations.

 

The images of cars queuing up on Highway No 56 was no longer seen and investors left quickly.

The same thing occurred in March in Dong Truc commune in Thach That district in Hanoi.

Despite the local authorities’ warning against gathering during Covid-19, hundreds of people, including brokers and investors, flocked there to seek investment opportunities after hearing that Vingroup had proposed building two urban areas in the locality.

The land prices then soared from VND6-9 million per square meter to VND12-20 million, though the real estate market was gloomy because of Covid-19.

However, the price fever lasted fewer than 10 days, and the market cooled down when the local authorities affirmed that they had not received any document from the municipal authorities on the urban area development project.

Surfing investors

The Ministry of Construction (MOC), in its report to the National Assembly recently, said that there is speculation in the market, which causes prices to escalate and create a ‘virtual fever’.

The real estate market witnessed an unprecedented ‘land fever’ in Da Nang and some neighboring districts in Quang Nam province in late 2018 and early 2019. Investors from Hanoi and HCM City flocked there to seek to buy land.

Fake news about urban development planning and counterfeit documents on approved projects were spread, which pushed land prices up.

The fake news brought high profits to some so-called surfing investors. After selling land and making fat profits, they left the market. Meanwhile, later investors suffered heavily as the land prices tumbled after a short period of escalation.

The investors tried to sell land after realizing that the prices were on the decrease. Some investors accepted to sell land at prices just equal to 2/3 of the buying prices.

Lawyer Truong Anh Tu from TAT Law Firm said the behavior of exploiting fake news to push land prices up has seriously affected real estate market management. This kind of behavior needs to be criminalized, he said. 

Manh Minh

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