After a “thirst” for apartments in major cities like Hanoi, Ho Chi Minh City… land prices have also skyrocketed, especially in the city’s outskirts.
Nguyen Van Dung of the Van Canh urban area (Hoai Duc, Hanoi) said that in the past 2 years, land prices in the urban area as well as residential land around the Van Canh, Kim Chung area of Hoai Duc district have increased abnormally, with plots that were previously purchased for about 70 million VND/m2 now at 120 million VND/m2 and even 150 million VND/m2 in some places.
“The land price has increased, but in the area where I live, I haven’t seen any buying and selling transactions. The houses and land are still empty, and the prices are changing every day, only going up,” said Nguyen Van Dung.
Many suburban urban areas with rows of houses have been abandoned for a long time
A broker, N.N.T, operating in the Hoai Duc district market, said: “In fact, the land prices are just being inflated, and there are almost no successful transactions. With land plots in suburban areas like Hoai Duc district priced at 15-20 billion VND, buyers will have many choices, even in the city center.”
The broker, N.N.T, assessed that the land prices are “artificial” and inflated because the increase in land prices should be linked to social infrastructure or transportation, but there are no new projects here. Moreover, anyone can post on real estate websites for a small fee, and the price can be set at any level. In order to inflate prices, some brokers often post a series of listings with sky-high prices so that buyers will fall into the “price trap.”
The Vietnam Real Estate Brokers Association, in a study on the market in the first quarter of 2024 (VARS), issued a warning to pay utmost attention to avoid the formation of “artificial fevers,” which pose a risk to safety, while the market is still in the process of recovery.
Artificial land fever and price gouging tactics
Previously, from the end of 2022 to 2023, land plots and auctioned land in the suburbs of Hanoi suffered a downturn following the market trend. Districts near the planned Ring Road 4, such as Hoai Duc, Soc Son, Me Linh, Dan Phuong…, which had experienced a surge in prices in 2020-2021, saw several rounds of price cuts. Some plots were offered at a loss of 20-30% but found no buyers.
Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association, said that recently, transactions in suburban areas 15km or further away from the city center have been very limited, and land prices have not only not increased but have in fact continued to fall.
“However, some land plots in areas on the outskirts of the city are experiencing a surge in prices, especially amidst the economic difficulties. These are abnormal phenomena, artificial markets, and virtual markets. In many areas, there is a lot of activity, but the buyers and sellers are not investors but rather staged performances created by brokers and investors,” said Nguyen Van Dinh.
Apartment prices are rising due to a shortage of supply, but with the “empty” land plots in the outskirts suddenly “heating up,” real estate experts believe that this does not reflect the true state of the market, and there are signs of manipulation by land brokers.
