More investors are pouring money into Vietnam’s underdeveloped provinces where land is cheaper than in Ho Chi Minh City and other big cities.

Investor Pham Thi Trang of Ho Chi Minh City told the Dau Tu (Investment) newspaper that she had bought 2,000sqm of land for around one million dong ($43.20) per square metre in Long An province’s Moc Hoa district, which borders Kampong Ro and Chantrea districts in Cambodia’s Svay Rieng province.

The cheap land is close to the provincial border and has unspoiled beauty, and because of its border location, it could double or triple in value in the future, Trang said.

Another investor, Le Thuan from Binh Duong province, bought land for 600,000 dong per square metre last year in Ninh Thuan province’s Thuan Nam district.

Though the land is located in a remote area, Thuan said the province would develop beach tourism and other profitable fields in the future.

Many real estate companies in Ho Chi Minh City are also buying land plots in regions such as Long An, Vinh Long, Binh Phuoc and Binh Dinh. These purchases have raised property values in those areas.

Rural, remote areas

Cat Tuong Duc Hoa Real Estate Investment JSC deputy director-general Le Tien Vu said real estate investors in southern Vietnam were seeking land in rural and remote areas.

Land in cities have high liquidity and profits, but available land in cities such as Ho Chi Minh City is becoming rare and prices have peaked.

Vu said the land in underdeveloped areas was cheaper and could increase in value in the future. His company’s investment in 50ha of land in the border province of Binh Phuoc has been successful.

Asian Holding Real Estate JSC director-general Nguyen Van Hau said legal procedures for land in such undeveloped areas were not as cumbersome and slow as those in city centres.

The land in these areas is also not affected by industrial air pollution, traffic congestion and noise pollution, and has high tourism potential if it is close to the ocean, forests or mountains, according to Hau.

In addition, expressway, airport and railway infrastructure development in recent years and in the next 10 years will make the land more profitable in the long run.

Long-term investments

However, a representative from the Vietnam Real Estate Association has warned investors that the growth of the value of land might drop unpredictably because infrastructure development and big projects near these land plots might not occur as planned.

Investing in such regions, where returns on investments can take a long time, may also reduce investors’ capital that could be used for other opportunities.

Experts have told investors to carefully assess their capital and ability to withstand a lack of returns for a long period.

The Ho Chi Minh City Real Estate Association said in the first six months of this year, the amount of residential property up for sale was only 39.1 per cent of the figure in the same period last year.