According to updated information from the Market Research Working Group of the Vietnam Association of Realtors (VARS), in localities across the country, just a few weeks since the proposal to merge provinces and cities, land prices in some localities have been pushed up, some places up to 20%.
However, the actual records of the reporter show that the transaction volume only grows in the provinces and cities that are predicted to be the center of merger.
For nearly 3 months, Mr. Nguyen Manh Dan (46 years old, in Hanoi) - an investor with more than 10 years of experience - has been actively selling a plot of land of more than 100 m2 located in Chau Son ward, Phu Ly city, Ha Nam province for 4.7 billion VND, but so far no investors have been really interested.
Mr. Dan said that he bought the above plot of land 2 years ago, with a fairly good purchase price compared to the price level at that time. Since the beginning of December last year, Mr. Dan has proactively lowered the selling price compared to the current market price by hundreds of millions of VND, but there are still very few customers asking.
This investor shared: "I don't know where the land fever is spreading, but it has not reached my area. For a few months, I myself have been selling a plot of land to bridge the gap but have been unsuccessful.
Mr. Nguyen Van Dinh - Chairman of VARS - acknowledged that recently, taking advantage of information about the merger, many individuals and organizations have targeted the crowd psychology, creating FOMO syndrome (fear of missing opportunities) to inflate prices, stimulate demand for real estate.
Therefore, investors need to be very careful with the virtual fever, because land fevers are rumored to only benefit a small group of speculators.
Meanwhile, sharing with Lao Dong reporter, Dr. Tran Xuan Luong - Deputy Director of the Vietnam Institute for Real Estate Market Research and Evaluation - commented that when information about provincial mergers appears, some speculative groups can take advantage to manipulate the market.
This expert said that they are spreading rumors about the new planning and administrative center to stimulate investor buying psychology.
Next, they conduct internal transactions to create a land fever effect, pushing prices up rapidly in a short time. As a result, land prices are pushed too far compared to their real value, causing many investors and buyers to be stuck.
Dr. Tran Xuan Luong gave a typical example of the merger of Ha Tay into Hanoi in 2008. Land prices in many areas such as Ba Vi, Quoc Oai, Thach That were pushed up 2-3 times in just a few months, but then decreased sharply when the actual planning was not as expected. Many small investors are stuck, unable to sell or suffer heavy losses.
According to Dr. Luong, in the face of the virtual land fever due to information about merging provinces, investors need to be very cautious. The most important thing is not to follow the crowd mentality. Land purchase should only be done when there is sufficient transparent information about the planning and real value of that area.
Another big risk is using excessive financial leverage. Bank loans for land investment can bring high profits if land prices continue to increase, but there is also a risk of bankruptcy if land prices suddenly decrease.
Therefore, buyers need to calculate carefully before deciding to borrow for investment. In addition, before paying, it is necessary to carefully check the legality of the land plot to avoid the case of buying a plot of land that is involved in a dispute or without full documents.
