In recent days, social media platforms for buying and selling real estate in Da Nang have been abuzz with talk of soaring land prices, chaotic pricing, and sudden price hikes, causing quite a stir among locals.
“After holding onto 2 billion VND for a month and still not being able to purchase anything, I’ve decided to give up. The market is just too unpredictable. The same property can have a different price from one week to the next, with increases of 200-300 million VND,” complained one social media user.
Sellers are increasingly engaging in price gouging and backing out of deals
Nguyen Manh, a real estate agent, shared with reporters that the rapid rise in land prices in Da Nang has led to a situation where sellers are hiking up prices and breaking agreements. Just a few days ago, Manh lost out on a significant transaction. After negotiating and finalizing a price, the buyer agreed and flew from Hanoi to Da Nang to make a deposit on a 22 billion VND plot of land in An Thuong, Ngu Hanh Son District. However, when Manh brought the buyer to make the deposit, the seller suddenly demanded a higher price, citing the volatile market conditions.
Land prices in Da Nang have increased by about 20% since the beginning of the year. Photo by Dieu Thuy |
“The seller of the An Thuong plot intended to sell it and use the proceeds to purchase a different plot in a more desirable location. However, the price of their desired plot had also increased by several billion VND. Fearing that they wouldn’t be able to afford it if they sold the current plot at the previously agreed-upon price, they wanted to increase the asking price, or else they would halt their selling plans,” Manh explained.
In another recent incident, as Manh was about to finalize the sale of a 100-square-meter plot in Cam Le District, Da Nang, for 4.6 billion VND, the seller suddenly demanded a higher price. “Initially, the seller asked for 4.6 billion VND, but when we arrived to make the deposit, they changed their mind and asked for 4.7 billion VND,” Manh said.
“Sellers believe that the market is hot and prices are rising, so they’re halting their selling plans and pushing for higher prices. On the other hand, buyers are also becoming hesitant to commit as they see prices being driven up, making it challenging to purchase,” Manh added, noting that this has led to a slowdown in transactions in the market.
According to our survey, land prices in certain areas of Da Nang have surged significantly. In Nam Hoa Xuan, prices currently range from 33 to 45 million VND per square meter, with the highest reaching 68 to 70 million VND per square meter. In the FPT urban area, the lowest price is 34 million VND per square meter. Meanwhile, in Hoa Xuan, prices fluctuate around 40 million VND per square meter. On Thanh Luong 15 Street, a 100-square-meter plot costs approximately 4.2 billion VND; on Con Dau 18 Street, it’s about 4.3 billion VND, and on Con Dau 24 Street, it’s 4.4 billion VND… These prices represent increases of 300 to 400 million VND compared to just a few months ago.
Nguyen Dau, manager of the Rong Do Real Estate Exchange Floor, stated that the land segment in Da Nang has witnessed a price increase of about 10% from September to the present.
According to Dau, in addition to buyers seeking residential properties, there has been an influx of investors from the north entering the market. The market has also been influenced by various supportive information, such as the planned free trade area in the city’s northwest and the ongoing construction of the University Village in the southeast.
“The market is in a state of flux, with instances of deposit surfing, deposit compensation, halted sales, and price adjustments. Many prospective buyers who were initially interested in purchasing a property for residential purposes have been taken aback by the sudden price increases, as the plots they inquired about just a month ago have now gone up by 300 to 400 million VND, or even more,” Dau said, expressing concern about the rapid price hikes and noting that the actual market liquidity is not high.
Investors are advised to exercise caution and avoid speculative investments
Nguyen Duc Lap, Director of the Institute for Real Estate Research and Training, acknowledged that the Da Nang land market has been performing well, with land prices increasing by over 20% since the beginning of the year.
This growth can be attributed to favorable planning news for Da Nang, such as the pilot free trade area, the Politburo’s approval of the Regional Financial Center proposal, and the recently commenced construction of the University Village. Moreover, land prices in Da Nang still have room for growth, and there is a shift in investment capital from the north as Hanoi has reached its peak.
However, Lap conceded that in the past month, the rate of increase in land prices in Da Nang has accelerated and become uneven. There have been instances where sellers have changed their minds and adjusted their asking prices upward.
“Sellers are afraid that if they sell their land, they won’t be able to purchase another property with the proceeds. This situation arises when there is a scarcity of new supply. Currently, the majority of land available in Da Nang is secondary stock,” Lap explained.
Lap assessed that the long-term trend of the market is still upward, but if prices continue to rise rapidly and excessively, reaching 10% increases per month, it will inevitably lead to a standstill. He advised investors to exercise caution and refrain from speculative investments, emphasizing the importance of a long-term investment horizon and the prudent use of financial leverage.
Dieu Thuy
