The New Prime Lands: Unveiling Củ Chi, Hóc Môn, and Cần Giờ’s Potential

Since the beginning of 2024, the real estate market in these areas has been receiving positive news about planning and infrastructure. However, compared to the previous period, there hasn’t been a rush to buy or continuous price increases. Perhaps, after a period of market fluctuations, the real estate here has adjusted.

Recall that at the beginning of 2024, it was proposed to build 5 suburban districts of Ho Chi Minh City into 3 cities. These include the northern city (Cu Chi and Hoc Mon), the western city (Binh Chanh), and the southern city ( Nha Be and Can Gio). This proposal was mentioned in the draft planning for Ho Chi Minh City for the period 2021-2030, with a vision towards 2050.

Hoc Mon and Cu Chi districts are oriented towards the development of eco-agriculture, rural areas, entertainment, healthcare, eco-industry, and services. Hoc Mon district will be the administrative and political center of the northern city.

The southern city comprises Nha Be and Can Gio districts. Can Gio will be the center for the sea economy, international transshipment ports, industry associated with ports, eco-tourism, and biosphere conservation.

Many investors expected that after this information, the real estate market in Cu Chi, Hoc Mon, and Can Gio would witness new developments. However, from then until now, real estate in these areas has remained quite quiet. Transactions only take place for well-priced land (reduced by around 20% compared to the beginning of 2022). Some investors holding residential land or agricultural land in these areas are still struggling to sell, even at a loss.

According to brokers, the real estate market has not returned to its previous boom. Most investors who previously owned real estate still hold their properties, and only a few are selling at a loss due to cash flow problems.

Recently, the land price framework in Hoc Mon and Cu Chi has been adjusted, with prices increasing by up to 50-51 times compared to the current rates in Ho Chi Minh City. Although the old land price framework has been extended until the end of 2025, after this information, many investors holding agricultural land in these areas have become anxious.

Worried that the new land price framework will lead to a surge in costs for changing land use purposes, many investors in agricultural land are rushing to sell at a loss. Although this situation has not occurred on a large scale, it has already appeared in some areas on the outskirts of Ho Chi Minh City, including Hoc Mon and Cu Chi.

According to observations, the profit margin for the agricultural land segment is usually 20-25% per year, and if converted, it can reach 30-40% per year. The opportunity for price increases per decade for this type of land can be 3-5 times the value, or even higher. However, with the expected land price framework, the cost of filing for conversion will increase ninefold compared to the present.

Lawyer Tran Duc Phuong (Ho Chi Minh City Bar Association) said that if the draft adjustment to the land price framework is approved, the group of investors holding agricultural land for conversion will suffer the “bitterest pill” in the market as the cost of conversion will far exceed their expectations.

Especially, the Land Law 2024 has stipulated that in cases of abandoned agricultural land, if it is not used continuously for 12-24 months, it will be subject to administrative penalties and may be revoked if it is not put into use.

This means that investors holding agricultural land will have to convert it to residential land or change their cultivation methods to avoid losing their land. Not to mention those who use financial leverage to invest, the risk of bankruptcy is very high.

Also, regarding the land price issue, recently, the Department of Natural Resources and Environment of Ho Chi Minh City has addressed the issue of the expected land price in Hoc Mon increasing by 50 times compared to the current rate. This has been one of the issues of public concern in the past.

Accordingly, the Department of Natural Resources and Environment of Ho Chi Minh City said that the draft of the new land price framework has updated the approved compensation price at a position in Hoc Mon district to match the market price, and it cannot be compared as a 50-fold increase.

Specifically, according to the previously issued land price framework, the land price at the location on Song Hanh Quoc Lo 22 road in Hoc Mon district was VND 780,000/m2. According to the adjusted land price framework, the land price here is about VND 39.6 million/m2.

The Department of Natural Resources and Environment of Ho Chi Minh City clarified that the price of VND 780,000/m2 according to the previous framework was not the market price for that land location. Specifically, the market price needs to be adjusted by a coefficient according to Decision 56/2023 of the People’s Committee of Ho Chi Minh City, and it should be VND 3.5 million/m2.

On the other hand, on December 1, 2023, the People’s Committee of Hoc Mon district approved the compensation price of VND 39.6 million, which was agreed upon by the people whose land was revoked. Therefore, the adjusted land price framework draft has updated this price for the location on Song Hanh Quoc Lo 22 road and cannot be compared as a 50-fold increase.

The Department of Natural Resources and Environment of Ho Chi Minh City further informed that the adjusted land price framework draft has updated the database of land prices approved for compensation projects, land use fee payment projects, and transaction prices provided by the land registration agency and the tax agency. Therefore, the land prices have been adjusted to match the actual situation in the area.