Recently, when there is information about the merger of provinces and cities, many investors expect infrastructure and economic development in that area, leading to rapid increases in land prices. For example, in Bac Giang, after the rumor of the merger, land prices have increased by 20 - 30% in just one week. Similarly, in Nhon Trach district (Dong Nai), the level of interest in finding real estate increased by 41%, leading to a high land price.
Similarly, in other provinces and cities such as Hung Yen, Phu Tho, Ninh Binh... land prices have also been pushed up because buyers and investors expect that after the merger of administrative boundaries, economy, and local infrastructure will develop.
Experts say that the crowd mentality, expectations of increased prices and the desire to make quick profits... have created a strong wave of interest in the real estate market in recent times. Many people think that this is an opportunity to "buy first".
However, from the perspective of an investor, Mr. Dinh Minh Tuan - Director of Batdongsan.com.vn in the Southern region - said that the land fever at the beginning of this year in many provinces and cities has shown signs of "hotness" and there is a potential risk of adjustment. Merged information is just one factor, while real estate prices are also affected by infrastructure, location, job needs, immigration and local economic foundations.
Talking to Lao Dong, Dr. Tran Xuan Luong - Deputy Director of the Vietnam Institute for Real Estate Market Research and Evaluation - commented that a real estate market with real value often has high liquidity when buyers have enough finances to conduct transactions. Planning and infrastructure information of that area must be transparent, confirmed by authorities, instead of being manipulated by rumors.
In addition, real estate needs to create real cash flow, that is, it can be used for living, business or renting, instead of just buying to wait for prices to increase. Transport infrastructure, electricity, water and public utilities must also be completed, instead of relying only on planning plans on paper.
On the contrary, a virtual market has very clear signs. Land prices are pushed up but there are few real transactions. These areas often have a high rate of abandoned land, no commercial activities or lease. Infrastructure has not been developed synchronously, only relying on unclear planning projects.
"A simple way to measure it is to consider the success rate of transactions on the total number of advertisements. If there are too many advertisements but few real transactions, it could be a sign of virtual currency. Similarly, if real estate in an area has a low rental rate and does not generate revenue, the actual value of the land is also very low," Dr. Tran Xuan Luong shared.
