Since the land fever in Ho Chi Minh City began in March, land prices, especially of housing foundations, have been increasing continually. At present, land rates in new urban zones like Districts 2, 7, and 9 are dizzyingly high. People are now speculating as to whether this current trend can and will continue, or if the phenomenon is simply the result of speculators’ and brokers’ market-manipulation.
Most investors are currently hunting for land in Districts 2 and 9. A purchased plot of land can change hands in just a few days or even immediately if it brings a fat profit to the investor.
A realtor in District 2 revealed that only 2 months ago, a plot of street-front land in the Thu Duc Housing Project would cost an investor between VND 22 million and VND 25 million per sq. meter; now the same land ranges from VND 34 million to VND 40 depending on the location.
Like land prices in District 2, those of other projects—like Kien A, Gia Hoa, and Nam Long in District 9—have gone up by between VND 8 million and VND 12 million per sq. meter. In District 7, the original price of a square meter of land under the Him Lam and Kenh Te projects was just around VND 14 million, but now it is sold at a market price of between VND 29 million and VND 37 million.
|A plot land under a project in District 7 is for sale|
When asked why land prices in District 7 had increased so drastically, real estate officials explained that the land in District 7 of the Saigon South area is ready for immediate construction. In comparison, land prices in District 9 are lower because infrastructure projects in the area are not yet completed. Rates in District 2 have already peaked, and there is no more land for new resettlement projects.
Also according to the official, the construction of the Phu My bridge joining District 7 and District 2 together is another factor behind the increase in land prices in the district.
Some experts, however, said that increasing land-rates are simply a phenomenon triggered by speculators and brokers’ tricks, and do accurately reflect the market. Due to an on-going decline in the stock market, many investors have shifted their funds out of stocks and into real estate. They purchased land under projects in newly-established districts like 2, 9, and 7 and then waited for a chance to sway the market.
Mr. Vo Dinh Quoc, deputy general director of the Real Estate Company of Asia Commercial Bank, pointed out that a purchased land plot in the said districts may change hands many times, and the price goes up after each transfer. Once an increase in the value of land is triggered, the construction of key projects begins, thus pushing land prices up even further. This cycle results the bustling activity seen in the real estate markets in these areas.
Some real estate experts, however, warn that despite the present increase in land prices, the current rates can not hold. They predict that land prices may decline due to limited purchasing power, and advise consumers against purchasing land at this time.
Whether or not land prices will go down again- no one can predict. However, few people expect that they will ever return to the rates seen at the beginning of the year.
It is unfortunate that the current increase in the real estate market has made it almost impossible for city residents earning a low or medium income to afford land; their dreams of owning a family home seem to be vanishing.