Five suburban districts to become inner districts, land price soars

The plan to turn some suburban districts in HCM City into inner districts is only on paper but it has triggered a new land fever in localities.

Five suburban districts to become inner districts, land price soars

The HCM City Department of Home Affairs has reported to the city’s People Committee on the preparation for the plan to convert some suburban districts into inner districts in the 2021-2030 period.

The districts include Can Gio, Cu Chi, Binh Chanh, Hoc Mon and Nha Be. They are located at gateways to the city and connect to provinces in the eastern and western parts of the southern region.

Because urbanization.in the districts has been going rapidly, the department has proposed switching Hoc Mon, Binh Chanh and Nha Be to inner districts or cities belonging to HCMC in the 2021-2025 period. The switch for Cu Chi and Can Gio would occur in the 2025-2030 period

A real estate broker recently introduced a 1,000 square meter land plot in Long Hoa commune to a VietNamNet reporter, who acted as a buyer. The broker said land in Long Ha is the ‘hottest’ in the district because it is adjacent to the sea encroachment project developed by a large corporation. The land is offered at VND12 billion.

“It is a good price. The land price will increase further as the sea encroachment project is under execution, while Can Gio will become an inner district,” she said.

“Investors are flocking here every day."

However, when asked about the legal status of the land plot, the broker said the plot is a small section of a larger plot with total area of 10,000 square meters. In legal documents, the land is listed as "land for long-term crop cultivation".

The land market in An Thoi Dong commune in Can Gio district is now quite busy. The Can Gio upgrade to an inner district is a hot topic of everyday discussions.

When reporters said they were seeking to buy land, the broker offered to sell a 18,000 square meter land plot at VND28 billion. She said the width of the land plot is 300 meters, and suits many different purposes.

Most investors now seek profits from trading, i.e. buying properties today and selling tomorrow, when the land prices increase. Speculators attract buyers by exploiting the news about urbanization or transformation.

“There is no common price in the locality. The land plots with larger width will be more expensive because they can be easily divided into smaller plots for sale,” the broker said, adding that buyers have to pay 70 percent of the land value immediately, while the remaining 30 percent will be paid when they get ‘red book’, or the land use right certificate.

However, legal documents show that the land is reserved for aquaculture.

 

In Hoc Mon, Cu Chi, Binh Chanh and Nha Be, the land price escalates every time news about the district upgrading into inner districts is released.

A veteran real estate investor said the land price has been increasing rapidly in the last four years in Binh Chanh. The average land price there has surged from VND28 million per square meter in 2018 to VND40 million.

In Binh Hung communes and localities near HCM City's central area, land is traded at VND90 million per square meter. At Trung Son residential quarter, land is offered at VND130 million per square meter.

“New price floors are set up every time when information about the upgrading of Binh Chanh into an inner district. But no one can say for sure when this will come true,” he said.

Tran Nguyen Dan, a respected economist, said when injecting money into real estate, investors can expect revenue from regular income from leasing the real estate or income from trading.

Most investors now seek profits from trading, i.e. buying properties today and selling tomorrow, when the land prices increase. Speculators attract buyers by exploiting the news about urbanization or transformation.

According to Dan, investors should only invest in land which expects to receive a high number of incoming residents, a new investment wave, or changes in population density.

It is unreasonable to say land will be more valuable just because the locality will belong to inner city and it is unwise to invest in ‘dead land’, or land that cannot create regular income.

At a conference on March 18, HCMC Mayor Nguyen Thanh Phong requested the Department of Home Affairs to report about the plan on converting 5 suburban districts into inner districts once again. 

Phuong Anh Linh

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