Investors lose big money after buying land near airport projects

Land prices in some areas skyrocketed after rumors spread about new airport projects, helping some investors to get rich but causing many others to go bust.

Investors lose big money after buying land near airport projects

The land prices in Hon Quan district in Binh Phuoc province soared in the first two months of 2021 because of the news of the development of an airport there.

People rushed to speculate land for resale, hoping to get rich overnight. However, the real estate bubble burst some days ago, causing land speculators to lose tens of billions of dong.

Hon Quan authorities said it’s unclear about the project and there’s no further information except for a fact-finding trip by agencies.

However, this was enough for land brokers to push land prices up and make big profits.

The same occurred with land prices in the area projected for Long Thanh International Airport. Though the airport project has just kicked off and transport infrastructure items are still under construction, the land prices have skyrocketed.

Some brokers said it is not easy to buy land though prices have become very high, because numerous investors want to buy land in large quantities. Some investors want to buy several sao (1 sao = 360 square meters) to more than 1 hectare.

Nguyen Van Dinh, deputy chair and secretary general of the Vietnam Real Estate Broker Association, said despite Covid-19, the land price increased by 20 percent compared with the previous year. The land price in Long Thanh’s central area hit VND100 million per square meter.

Dinh said the land prices there risen not only because this was the area for an airport in the future, but also because land supply in HCM City has become scarce and people have to look for land in neighboring provinces.

A report from the association showed that land prices in Dong Nai in 2019 hovered around VND12-14 million per square meter, then surged to VND22 million in 2020. As such, the prices in some areas doubled after just one year.

On real estate trading websites, one can easily find ads about the sale of agricultural land that is going to be converted into building land, or land planned by local authorities for residential development.

The land plots in the communes of Loc An and Bau Can have the highest prices in the areas being hunted by many people.

In 2019, the land there was priced at VND3.5 billion per sao, but it surged to VND5-6 billion. The land plots in advantageous positions near large roads are priced at VND6.5-7 billion per sao on average.

A broker said some families in An Loc commune sold their land at VND1 billion per sao in the past but now regret the sale because the land price has become much higher.

 
Land prices in some areas skyrocketed after rumors spread about new airport projects, helping some investors to get rich but causing many others to go bust.

Some landlords are refusing to sell land at VND4-5 billion per sao, because they believe the prices will rise further, when infrastructure around the airport is built.

Airport is not 'magic wand'

Most land fever attacks are the result of the ‘crowd effect’. Many people want to buy land at the same time, which pushes prices up while demand is limited. Land fever becomes artificial when the land value no longer truly reflects the real value and real demand, and land valuation is based on unclear information and rumors.

Analysts say that land prices escalate not because of high demand for accommodation, but because of speculation. Some people become billionaires after the spells of land price escalation, while others lose all their money.

Su Ngoc Khuong from Savills Vietnam said that the airport that Binh Phuoc province plans to build is not a ‘magic wand’ that can help develop the local economy just in a short time. One airport cannot create a breakthrough for the entire province.

Khuong said that airport development remains an idea that needs to be considered and approved. Local real estate prices depend on many other factors. Besides the information about development planning, news about the economy can help increase the value of assets and create a driving force for the market development.

The BInh Phuoc airport will take at least 5-7 more years to get approval and another 3-5 years to build. So, it would take about 10 years from the time of surveying the field to the time of completing construction. It will take 5-10 years more to operate the airport effectively and lure more nvestments.

Not all localities develop strongly after building airports. The airports in Da Nang and Nha Trang have helped their local economies, but Phu Cat Airport in Binh Dinh has had a modest influence on the provincial economy.

There are 22 civil airports in Vietnam, including 13 domestic and nine international ones. But only six of them are making a profit, according to the Civil Aviation Authority of Vietnam (CAAV). 

Thu Ky - Tuan Linh

Speculation pushes land prices up: Ministry of Construction

Speculation pushes land prices up: Ministry of Construction

Real estate speculators have been exploiting urban expansion plans to push up prices beyond the real value, according to the Ministry of Construction (MOC).

Industrial land prices escalate as more multinationals head for Vietnam

Industrial land prices escalate as more multinationals head for Vietnam

The land rent in industrial zones has seen a year-on-year increase of 20-30 percent, according to CBRE Vietnam.

 
 

Other News

.
When Party documents mention the concept of 'national governance’
When Party documents mention the concept of 'national governance’
FEATUREicon  19/04/2021 

One of the new features of the documents of the 13th National Party Congress is the emergence of the concept of "national governance".

Buyers of phony ‘mutant orchids' from disreputable sellers lose huge sums of money
Buyers of phony ‘mutant orchids' from disreputable sellers lose huge sums of money
FEATUREicon  18/04/2021 

What are some of the most popular investment channels in Vietnam? Real estate, securities, cryptocurrency and ... mutant orchids.

Special lessons given at border markers to local students
Special lessons given at border markers to local students
FEATUREicon  18/04/2021 

At 5 am, the fog still covered the mountain surrounding the Huong Lap Frontier Post. But the teacher, a border officer, was already correctly dressed in uniform, reviewing the lesson plan in a preparation for his teaching period in the field.

The twins who built a sharing platform for young people
The twins who built a sharing platform for young people
FEATUREicon  17/04/2021 

Having experienced a difficult period of time finding directions for the future, a pair of twin sisters decided to establish an online platform to advise and troubleshoot problems for young people who are struggling to find goals for life.

Race for digital transformation: now or never
Race for digital transformation: now or never
FEATUREicon  16/04/2021 

The rules of the game in the future will be "quick fish eats slow fish". Even “giants,” without timely performing digital transformation, may lose ground to “rookies” that are young and agile in the 4.0 technological revolution.

Bach Mai Hospital faces mass resignation of staff
Bach Mai Hospital faces mass resignation of staff
FEATUREicon  16/04/2021 

More than 200 workers at Hanoi-based Bach Mai Hospital, the country’s leading hospital, have resigned from their posts. Some practitioners said they had left because of unreasonable changes in management.

Apartments sales drop, but developers still setting high prices
Apartments sales drop, but developers still setting high prices
FEATUREicon  17/04/2021 

No longer seen as a profitable investment segment, apartments are not selling well as investors have shifted to buy land instead.

Fintechs to partner with telecom carriers to offer Mobile Money
Fintechs to partner with telecom carriers to offer Mobile Money
FEATUREicon  16/04/2021 

The pilot program on providing the Mobile Money service is expected to increase non-cash transactions, especially in remote areas. To improve users' experience, fintechs should work with network operators, experts say.

Digital academy takes shape
Digital academy takes shape
FEATUREicon  17/04/2021 

The initial ecosystem for a digital school is taking shape at the Posts and Telecommunications Institute of Technology (PTIT).

Four questions sparked Quang Ninh's awakening 10 years ago
Four questions sparked Quang Ninh's awakening 10 years ago
FEATUREicon  15/04/2021 

A decade ago, the northern province of Quang Ninh faced bottlenecks in infrastructure development. 

From failed college candidate to physics professor in the US
From failed college candidate to physics professor in the US
FEATUREicon  16/04/2021 

Dr. Nguyen Dong Hai spoke with VietNamNet about his path from a student who failed the university entrance exam in Vietnam to a professor of physics at Tennessee Wesleyan University in the US and his thoughts on pedagogical student training.

Female scientist with PhD in immunology pursues research on rare diseases
Female scientist with PhD in immunology pursues research on rare diseases
FEATUREicon  14/04/2021 

Tran Nguyen Kim Thi is a postdoc majoring in AI usage in medicine at the Huge Kaul Precision Medicine Institute at the University of Alabama in Birmingham (UAB) in the US.

Newly-elected NA Chair faces high expectations to fulfill President Ho Chi Minh's wishes
Newly-elected NA Chair faces high expectations to fulfill President Ho Chi Minh's wishes
FEATUREicon  14/04/2021 

When delivering the closing speech at the NA session, NA Chair Vuong Dinh Hue expressed his belief that newly elected deputies will uphold the spirit of dynamism and creativity, and will dare to think, dare to do, and dare to take responsibility.

What’s behind the 'land fever' phenomenon?
What’s behind the 'land fever' phenomenon?
FEATUREicon  14/04/2021 

The market often cools down when periods of "land fever" end, but then new higher price levels reoccur later.

Student overcomes adversity, joins national maths team
Student overcomes adversity, joins national maths team
FEATUREicon  18/04/2021 

Having parents with severe illnesses who could not pay to send their kids to tutoring did not lessen Thong’s eagerness to learn and achieve.

Vietnam to raise tax on cars with high emissions
Vietnam to raise tax on cars with high emissions
FEATUREicon  13/04/2021 

Experts have suggested imposing high taxes on vehicles and encouraging the use of electric cars.

Government of new term to pursue reform, taking action
Government of new term to pursue reform, taking action
FEATUREicon  13/04/2021 

Former Prime Minister Nguyen Xuan Phuc has left an indelible mark on the socio-economic development of the country. The newly-elected Prime Minister Pham Minh Chinh will continue that strong reform thinking.

“I was moved after being appointed the first female Minister of Home Affairs”
“I was moved after being appointed the first female Minister of Home Affairs”
FEATUREicon  13/04/2021 

VietNamNet talked with Pham Thi Thanh Tra soon after she was elected Minister of Home Affairs.

Six ultra-wealthy people have combined $17 billion
Six ultra-wealthy people have combined $17 billion
FEATUREicon  13/04/2021 

Six Vietnamese businesspeople have been named in Forbes’ list of the world’s richest billionaires.

Vietnam to become ICT powerhouse in next decade
Vietnam to become ICT powerhouse in next decade
FEATUREicon  12/04/2021 

Emphasizing ICT as the field that will lead Vietnam's digital economy, Minister of Information and Communications Nguyen Manh Hung said that we must become an ICT powerhouse not in 2045 but in the next decade (2021-2030).

 
 
 
Leave your comment on an article

OR QUICK LOGIN