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Land prices surge on growing demand for investment alternatives
Land prices have continued to rise over the last few weeks as investors pour more money into the recovering real estate market.
Nguyen Anh Minh, General Director of Hanoi-based Housing and Urban Development Financial Investment Corporation, told Dau Tu Chung Khoan newspaper the local real estate market has entered the first phase of recovery, with prices going up and more transactions being effected.
Minh said over the past three years more local investors have diverted their savings to property and stock markets for better profits.
Managing Director Marc Townsend of real estate services firm CB Richard Ellis said with the stock market soaring, investors could start converting their gains into property.
Vietnam’s benchmark VN-Index rallied 60 percent in the second quarter, the best performer in Asia and second in the world to Ukraine’s PFTS Index, which jumped 78 percent among 89 benchmark measures tracked by Bloomberg.
Economist Dinh The Hien told Thanh Nien many investors have earned a lot of money from the stock market so far this year and now they want to invest that in real estate.
While houses are expensive and not so lucrative anymore, land lots at residential projects are still good investments, Hien said.
An investor in Ho Chi Minh City, who wanted to be identified only as Hoa, said he has received a huge windfall from the property market.
Hoa said he bought two land lots at the Phu Xuan residential project in Nha Be District early this year at VND7.5 million (US$420) per square meter.
He just sold the lots at VND9.5 million and VND10 million per square meter, pocketing around VND500 million ($28,000) in less than half a year.
Tran Thu Hong, a Sales Executive at Van Phat Hung Joint Stock Company, the main investor in the Phu My project in fast growing District 7, said increasing demand has boosted prices sharply over the past two weeks.
“Two weeks ago some lots at the project could still be bought at VND28 million per square meter, but now prices have topped VND30 million.”
Land prices have also increased at other residential projects around the city. Lots at Phu Loi 1 project in District 8 are now offered at VND11-13 million per square meter, an increase of up to VND4 million from two months ago. Meanwhile, land prices at the Thai Son project in Nha Be District have surged about 13 percent over the past two months.
But Le Hoang Chau, Vice Chairman of the Ho Chi Minh City Real Estate Association, warned that the price increases are not purely demand-driven.
Property speculators have forced prices to surge more than they should, Chau said, advising buyers to do their homework before making any purchases.
Minh said in Hanoi prices have been pushed up unreasonably. He said buyers should remain calm and avoid being manipulated by dealers.
Nguyen Khanh
thanhnien
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