1:52:23 PM | 5/7/2010
The land fever in Hanoi has cooled down and this is the time for insiders to make out the gain and loss in rumour-driven real estate dealing. Thousands of investors rushed to buy land in hope of making quick profit, causing a fever in suburban districts of Hanoi. But now, things have changed. Land prices are dropping but investors are shrugging off what they used to search for with all their effort. Behind the current silent atmosphere may be new plots for another game to play.
Land prices fall, investors get indebted
The “service” land is most interested by investors because they can purchase at softer prices and they find it easier to drive up the prices. In early May, seeing a colleague make a 50 % profit within one month, Minh, a staff at VNPT Group, decided to invest VND1.25 billion for a 54 square metre land plot in An Tho village, Nam An Khanh urban zone. This lot is located near Bao Son Paradise Themed Park and Road 22. Brokers told him that the land plot is in a big project to be kicked off in October.
He used up his savings and borrowed from banks to pick up the land and the deal was quickly reached.
Minh intended to sell the land plot to another investor at a higher price, expected at VND1.4 to 1.6 billion in 2-3 months later. However, the price tended to go down after peaking in June. Fearing the price to fall further and having to settle monthly interest rates to banks, he advertised to sell it at VND1.2 billion. Unluckily, none has asked him for the bid in the past two weeks.
The far-lying district of Ba Vi, which was rumoured to be a certain national administrative centre in addition to the political centre in Hanoi to form Thang Long Axis, reportedly “buried” most capital of investors. In April, Thu Huong went to Yen Bai commune (Ba Vi district) to buy more than 1,000 square metres of land at a price of less than VND1.5 million per square metre. She continued to purchase 200 square metres of service land in Song Phuong commune (Bac An Khanh) at VND15 million per square metre and 100 square metres of residential land in An Thuong village (Nam An Khanh) at nearly VND25 million per square metre. She quickly changed hands the two plots in Hoai Duc district to earn a margin of VND200 million but the Ba Vi lot was unmarketable although she had lowered the price to VND1 million per square metre.
The bubble deflates as quickly as it has inflated. Land prices in Thach Bich, Thanh Oai and Ha Dong areas are on the fall after repeated rises in previous months. Many investors intended to buy farming lands at some VND4-8 million per square metre in Me Linh and wait for higher prices when investment projects were officially announced but they seemed to go wrong way.
However, investors in Me Linh, Nam An Khanh, Bac An Khanh, Kim Chung - Di Trach, Duong Noi, Van Phu and some other locations do not want to suffer losses because they think their properties are in good conditions. A roadside land plot in Geleximco project area is being offered at VND40-42 million per square metre, villa land in Bac An Khanh is offered at US$1,800-2,000 per square metre or roadside land plots in Duong Noi, Le Trong Tan and Le Van Luong are expected to be sold at VND52-54 million per square metre.
Hung, a big real estate investor, said: Land prices in these places will go sideways in at least a month before to set up a new trend in a later time. Land in project areas need at least 1.5 years to make a certain profit, he added.
Slide in the West, rise in the North, East
Land prices started to heat up in the west and east of Hanoi, especially Gia Lam, Long Bien and Bat Trang after a long time of silence. A series of information about upcoming projects like Gia Lam Urban Zone, Green Park, The Pavillion - Thac Ban Urban Zone, Thanh Tri Bridge and new roads are catching the eye of investors. Notably, prices are deemed soft in relation to other places in the city.
Currently, land and house transactions are very active in Bat Trang, Dong Du, Co Bi and Kieu Ky (Long Bien district), with land price standing between VND20 million and VND49 million per square metre. It seems unsuccessful buyers in the west of Hanoi are channelling their capital into the north and the east
On the other hand, when aforementioned projects are kicked off and completed, the face of this area will be uplifted. For instance, in Bat Trang commune alone, the large-sized Ecopark Urban Zone is being completed. Prices of land lots around the project are looking up. For the time being, Palm Forest Apartment in the Ecopark is selling a 70 - 90 square metre flat at VND1.5-2 billion apiece.
The fever now seems to be heating up in the north and east of Hanoi but investors will be more careful following an accident in the west.
Luong Tuan
Vietnamese
