According to real estate traders in Vinh City, the latest land fever lasted one year in Nghe An, Ha Tinh and Quang Binh. The peak was from October last year to April this year.

Because of Covid-19, many people, from tour guides to teachers to office workers and pretty merchants, stayed idle and became real estate investors. They rushed to buy land to speculate, hoping to make a profit later when land prices escalated. 

Nguyen Trung Kien, an investor in Vinh City, said as many rushed to buy real estate, prices were pushed up to abnormally high levels. 

Regarding the reasons to buy land instead of depositing their money at banks, Kien said real estate is considered a safe investment which can bring high profits.

“In the past, if depositing VND1 billion at banks, one could get a profit of VND100 million a year. But now they get VND50 million only. So people with idle money would rather inject money into real estate,” Kien explained.

“Professional investors came to areas with ‘fever’, while amateur investors mostly came to small rural areas, towns and cities,” he said. “As the real estate market has cooled down, many amateur investors have given up and have rushed to sell the land plots they bought before.”

Since business activities have returned to normal, the investors who ‘sponged’ on land fever are now hurrying to sell land to escape the market.

Nguyen Van Hoa, a worker at a hospital in Vinh City in Nghe An province, said he and other people contributed money to buy a land plot worth VND2 billion before Tet. 

As Hoa was worried about the investment, he wanted to sell the land. At first, they could not reach an agreement about whether to sell it. The land plot was sold only four months later and the contributors got their capital back.

Hoa said he would never make an investment this way and as everything has returned to normal, he now feels secure to get back to work.

According to Nguyen V.C., the owner of a real estate firm in Nghe An, land fever occurred in 2010, which led to high inflation and caused many families to lose houses as they borrowed money from banks at high interest rates of 19-21 percent. After 10 years, another land spell occurred. But the spell ended as banks tightened lending for real estate purchases.

Quoc Huy