A lesson from history
Land prices dramatically roaring in the special economic zones (SEZs) remind us of the land price frenzy in the suburbs of Ho Chi Minh City several years ago. Though it has been settled, the consequences it left are still lingering.
Compared with the mentioned frenzy, the land fever in the SEZs follows quite a similar scenario. It is also all about the ambiguous information about the planning with rumours that brokers freely spread.
However, only in a short time, the history repeats itself with prices increasing much stronger in more regions. According to the report of Vietnam Association of Realtors (VARs), land prices at Van Don ranges from about $879 to $2,197 per square metre, sharply increasing compared with before Tet 2018 and about five to six times higher than two years ago.
Phu Quoc’s real estate market is currently very complicated. Land prices here have continued to increase by 10-20 times in a short period.
In Bac Van Phong (Northern Van Phong, Khanh Hoa), land prices are currently being offered at two to five times higher than ones of just a few months ago.
To cope with this incident, most of the local authorities have issued documents to warn their people. The Ministry of Construction also directs the handling of the problem, but little has been done.
Severe consequences for both authorities and businesses
PhD. Nguyen Van Dinh, Vice President of VARs, said that most of the transactions that have created the land fever in the SEZs recently resemble surfing. The sellers buy land plots and catch a high “wave” of prices to make profits.
On the other hand, this land fever also troubles managers, puts financial policies and businesses at risks when the projects are implemented in the future.
Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA), said that there had not been any 1:2000 plan for SEZs yet. At present, buyers want to grab investment opportunities, so they risk buying land plots, regardless of not knowing what the land plots are planned for. This act disturbs the future land clearance process and may even discourage strategic investors.
Besides, if buyers are lucky enough to have plots in the residential area or for hotel business, they will "win" much higher compensation from the investors. Otherwise, if the plots are for roads and public works, buyers will suffer from huge losses.
Chau recalled the lesson from the land price frenzy in the suburbs of Ho Chi Minh City to give a solution to this situation. Accordingly, to quickly cool down the land fever, the State and local leaders need to get involved and also strictly handle the illegal land selling in SEZs.