The news about sharp land price increases in Da Nang has appeared in local newspapers these days and become a hot topic on social media.

“I have been looking for an apartment worth around VND2 billion to buy over the last month, but I cannot find any apartment with reasonable prices. So, I have given up,” someone wrote on a social media account..

“The market is chaotic with prices increasing every dat. If you don’t buy apartments right now, you will have to pay VND200-300 million more to buy the same apartment next week,” another account said.

Nguyen Manh, a real estate broker, told VietNamNet that prices have been increasing so rapidly that many deals have fallen through. Landlords have canceled all transactions and said they would pay back the deposit to buyers.

Manh lost a big deal some days ago. A buyer from Hanoi made a deposit to buy a land plot in An Thuong area in Ngu Hanh Son district, worth VND22 billion. But when the buyer came back to make a payment, the landlord backed out of the deal, saying that he would not sell the land at the committed price as market prices keep escalating.

“The landlord planned to sell the land plot in An Thuong area to buy another plot in another area, but the price of the plot increased by several billion of dong. If he sold his land at the committed price, he would not have enough money to buy the new land plot,” the broker explained.

In another case, the landlord quoted a price of VND4.6 billion for a 100 sq m land plot in Cam Le district. But when a buyer accepted the price, the landlord changed his mind, saying that he would not sell the land at less than VND4.7 billion.

Manh said the land price escalation has frozen the real estate market. Sellers tend to quote sky high prices as they believe that the market is ‘feverish’, while buyers have canceled their purchase plans as the prices have become too high.

The land price in Nam Hoa Xuan area is hovering around VND33-45 million per sq m, while the highest price level is VND68-70 million. In FPT urban area, the lowest price is VND34 million per sq m. Meanwhile, in Hoa  Xuan, the price is VND40 million per sqm.

On Thanh Luong 15 Road, a 100sq  m land plot is offered at VND4.2 billion, On Con Dau 18 Road, the price is VND4.3 billion, and on Con Dau 24 Road, the price is VND4.4 billion. 

As such, land plots all have become VND300-400 million more expensive than several months ago.

Nguyen Dau from RongDo Real Estate Trading Floor commented that the land price in Da Nang has increased by 10 percent since September.

The broker said new investors, mostly from Hanoi and northern provinces, have appeared in the Da Nang market. Da Nang’s land has become more attractive thanks to good news recently, including a free trade zone in the northwestern part of the city, and the ongoing university village project in the southeast.

“The market is in turmoil with transactions broken and prices adjusted. The sudden price increases have given buyers a start. Just within one month, land plots have seen prices increase by VND300-400 million, or even more sharply,” Dau said, adding that the increases are too sharp and market liquidity is weak.

Nguyen Duc Lap, Director of the Institute of Real Estate Research and Training, said the Da Nang land market has been growing well with land prices increasing by 20 percent this year.

He noted that cash has flowed to the Da Nang real estate market from northern provinces. Investors inject money into the Da Nang market as the Hanoi market has hit its peak.

“Many landlords are not selling land at this moment as they fear the money they get from selling land won’t be enough to buy land in other places,” he said. “The current supply is mostly secondary products.”

About the future of the market, Lap said a price increase would still be the long-term trend, but a sharp rise of 10 percent per month would stop. 

Investors should be cautious about their investments. It would be better not to surf investments, but strive for long-term investment and use financial leverage in an effective way.

Ho Giap