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10 most outstanding events in southern property market in 2021

Land prices escalated despite Covid-19, which forced many people to tighten their purse strings.

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1. The land prices in Thu Duc and Phu Quoc skyrocketed following the news about the establishment of Thu Duc City by merging districts 2, 9 and Thu Duc in HCM City, and Phu Quoc City in KienGiang province.

Within one year, land prices in districts 2, 9 and Thu Duc soared 20-40 percent. In Truong Tho Ward, designed to become the central area of Thu Duc City, land was traded at VND120 million per square meter.

In Phu Quoc, land prices increased more slightly, by 5-10 percent over 2020.

2. In late February 2021, investors from all over the country flocked to the communes of Hon Quan district in Binh Phuoc to seek to buy land, which became more expensive thanks to the news about the development of a joint-use airport on the existing military airport of Tecnic Hon Quan.

The communes of An Khuong and Tan Loi were the hottest markets, where agricultural land increased sharply day by day. The price hike brought profits of billions of dong overnight to surfing investors.

 

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The local authorities then released a warning to investors about the local land price escalation, stressing that there has been no official information about the airport.

One month later, Thien Nghiep Commune in Phan Thiet City in Binh Thuan province became a ‘hot spot’ for land transactions with information about the construction of Phan Thiet Airport.

The construction of the joint-use airport, covering an area of 543 hectares in Thien Nghiep commune, was initially planned to start in 2015 and be completed in 2018. The project has not started, but the local real estate market is chaotic every time when there is news about construction.

3. The HCM City Taxation Sub-department proposed collecting tax from the lease of apartments and shophouses at high-end apartment buildings, while the Hanoi Taxation Sub-department instructed its branches to strengthen tax management over the households who rent houses and provide accommodation services.

In fact, collecting tax from the activities of leasing apartments and shophouses has been legalized, but it’s still necessary to perfect the legal framework.

The owners leasing apartments and shophouses with total revenue of VND100 million a month or more have to pay 5 percent of personal income tax and 5 percent of VAT.

4. The supply in HCMC was short in 2021, especially for affordable housing products. In H1, only 14 projects (11,948 houses) satisfied the requirements to sell ‘houses to be formed in the future’.

High-end housing products still accounted for a large proportion of total supply, with 7,040 products. Meanwhile, there was no offer for affordable products (below VND20 million per square meter).

In the third quarter of the year, the HCM City market became even gloomier with only two projects for online sale. Housing supply fell to the lowest point over the last three years, with just 1,600 apartments.

5. The delays in granting so hong (pink book), or the certificate of house ownership and residential land use rights has been a burning issue for years.

HCM City authorities have asked the Department of Natural Resources and the Environment and Department of Construction to join forces to accelerate the granting of pink books.

It’s estimated that from now to the end of 2023, pink books will be granted to 37,421 apartments.

6. A report from Fiin Group found that VND430 trillion worth of corporate bonds were issued in the primary market in the first 9 months of the year, 27 percent higher than the same period last year. Of this, realty bonds accounted for 40 percent (VND172 trillion).

Nine out of 20 biggest bond issuers were real estate firms, including Hung Thinh Land (VND7.95 trillion), Mediterranean Revival Villas (VND7.2 trillion), VinGroup (6.976 trillion); Osaka Garden (VND6.8 trillion); Golden Hill (VND5.76 trillion); Tan Thanh Long An (VND5 trillion); Hung Thinh Quy Nhon (VND5 trillion), Vietnam Import-Export and Construction (VND4.7 trillion) and Hoang Phu Vuong JSC (VND4.67 trillion).

The interest rate of the bonds was between 8 percent and 13.28 percent per annum.

7. In mid-November 2021, HCM City Police completed a third additional investigation, proposing to prosecution of Nguyen Thai Luyen, General Director of Alibaba Real Estate, and Nguyen Thai Linh, his younger brother, and 21 accomplices for “swindling to appropriate property" and for "money laundering".

Alibaba ‘fabricated’ 58 real estate projects and signed contracts on transferring ‘virtual’ products.

8. Land allotments for sale have been occurring in Lam Dong since 2020, but only began catching attention in the second half of 2021.

Land plots with areas from several to dozens of hectares have been subdivided for sale as smaller plots. These were land plots of households and individuals, but they were labelled by real estate firms as resort projects and advertised noisily.

The police discovered violations in some cases of allotting the land plots for sale under the guise of donating land to build roads.

9. Lam Dong’s market has caught the attention of big players. The provincial authorities often published information about areas funded by businesses for planning, thereby revealing the land plans of a number of real estate "big guys", such as VinGroup, Hung Thinh Land and Novaland.

10. Four land plots in Thu Thiem New Urban Area in HCM City were sold at an auction at sky high prices. Tan Hoang Minh Group acquired the 10,000 sqm land plot at VND24.5 trillion. 

Anh Phuong

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