Land price hike over 100 times leads to controversial decision on land transaction suspension in SEZs

By An Chi - May 19, 2018 | 08:06 AM GMT+7

TheLEADERLocal authorities are enforcing orders to temporarily cease the transfer, conversion of land use purpose and modification of land ownership after a dramatic increase in land prices in the future special economic zones (SEZs) such as Van Don, Phu Quoc and Northern Van Phong.

These decisions by local authorities of three SEZs  faced fierce controversy from the experts and public opinion though they aimed at cooling down the existing land fever.

On the one hand it is argued that the administrative decision to suspend land transaction is illegal. On the other hand, many viewpoints concern about the negative influence of virtual land fever on the economy if not preventing timely.

Pham Thanh Hung, vice chairman of CEN Group discussed that the regulatory policies of real estate market must comply with the objective rules of the market economy.

Pham Thanh Hung, vice chairman of CEN Group

"We have to respect market rules, the rule of supply and demand is a very important rule to regulate all behaviors, prices, cash flow of investors," he said.

"Even when the government wishes to control the land fever caused by mass land purchasing of speculators, it is impossible to intervene the market due to the objective rules,” said Hung.

When the demand excesses the supply, it is certain that the prices will increase.

For instance, the land prices in North Van Phong have increased by more than 100 times in the past two years. In particular, it was $1,800 per lot original but up to to $17,600 by 2017 and has reached $242,000 since now.

Before passing any law for SEZs, lands in these zones must be planned in order to ensure its transparency and prevent the prices from being pushed up, as most of the lands being purchased at the moment belong to the residents.

When the land price is pushed up and the areas purchased by the investor are not residential land, the investors will surely suffer a huge loss, such as in the period of 2009 to 2013 many businessmans were bankrupted due to land fever.

Nevertheless, regarding this issue, Nguyen Viet Cuong, chairman of Kosy Group, has a different opinion as he believes the involvement of the government is very crucial in dealing with the land fever in the SEZs.