Logo of Phnom Penh Post newspaper Phnom Penh Post - No bubble but land prices might increase in Vietnam




No bubble but land prices might increase in Vietnam

Content image - Phnom Penh Post
A Vietnamese worker cleans window panes of a high-rise residential building in Hanoi. AFP

No bubble but land prices might increase in Vietnam

While there are few, if any, signs of the real estate bubble bursting in 2020, Vietnam’s Ministry of Construction said that land prices could increase in some areas.

Those areas included planned special economic zones and new urban areas with developed technical and social infrastructure.

This was a normal market reaction, the ministry said.

Director of the Housing and Real Estate Market Management Department Nguyen Trong Ninh said that hot areas for land would be in major cities like Hanoi and HCM City.

Some real estate experts, however, said that land prices were too high in Vietnam.

In some provinces and cities, land prices were inflated at rates much higher than the pace of economic and infrastructure development, according to the Vietnam Association of Real Estate Brokers.

The association said that land would remain the top choice for real estate investors in emerging localities.

However, land prices were being inflated, leading to adjustments in taxes and higher compensation for site clearance.

This would negatively affect the market, the association said, pointing out that high land prices would lead to a fall in investment in urban development, and investors would leave the market, which would erode local socio-economic development.

Nguyen Van Dinh, the association’s deputy president, predicted that land prices would continue to rise, but the increase would not be significant this year.

General director of Phu Vinh Group Phan Công Chanh said that prices were now at their highest levels due to the impacts of land fever in 2016-18.

He said there were also concerns that land prices were too high compared to their real value, adding that it would be a difficult period for buyers and investors.

In some areas, land prices had reached fever point and the market could reverse the trend at any time, making it risky for investors, he said.

In the short term, land prices might experience fluctuations, he said. Still, over a long period, it would be on an upward trend, Chanh added.

Vietnam Report recently forecast that in the short-term, Vietnam’s real estate market would experience price fluctuations in order to set up new levels.

In the next few years, the market would undergo a purification process which would put weaker businesses out of the game to promote more sustainable market development, the company said.

The report revealed that real estate prices had risen by up to 200 per cent in some areas, compared to annual economic growth rate of around seven per cent, and a 7-8 per cent bump in income per capita.

The Housing and Real Estate Market Management Department said the management of land transactions had been tightened, especially after the case of Alibaba Real Estate Joint Stock Company’s fraudulent sales of houses and plots in southern provinces to appropriate trillions of dong.

The department said that investors now were more cautious, forecasting that land transactions and supply would decline significantly this year.

VIET NAM NEWS/ASIA NEWS NETWORK

MOST VIEWED

  • Seven positive for Covid-19, Hun Sen confirms local transmission

    Prime Minister Hun Sen announced that there has been local community transmission of Covid-19. However, he urged the people not to panic even though the Ministry of Health announced the discovery of seven new cases on Sunday. Among the victims are Chhem Savuth, the director-general

  • Without shoes or a helmet, a young cyclist steals the show

    Pech Theara gripped the curved handlebars of his rusty old bike, planted his bare feet on its pedals and stormed as fast as he could towards the finish line. The odds were against him as the 13-year-old faced off against kids with nicer bikes at

  • Phnom Penh-Sihanoukville expressway on schedule

    The construction of the more than $1.9 billion Phnom Penh-Sihanoukville Expressway has not been delayed despite the Covid-19 pandemic, with more than 26 per cent of the project completed and expected to finish in about two years, according to Ministry of Public Works and Transport secretary of

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there