HCM City is witnessing the most dramatic land price increase so far. Within one month, land prices in several areas have increased by 30-50%.

Three weeks ago, the land fever just occurred in the eastern area of the city, including districts 2, 9 and Thu Duc, and the southern area, including districts 7, Nha Be and Binh Chanh. Now the land fever has spread to inner HCM City and other districts in the suburbs.

In the southern area of the city, land and house prices have been 30-50%, or even 100% higher than one month ago. Projects, once considered ‘mediocre’, now are seeing the biggest increases.

The eastern area is also seeing prices skyrocketing, though the increases prove to be slighter. High-grade projects like An Phu – An Khanh, Huy Hoang and Van Minh have all seen price increases of 30% and higher, while projects in district 9, adjacent to Dong Nai province, have also seen price increases of 20%.

People now are rushing to buy land despite the price increases. Lam Van Chuc, Director of Phuc Duc Real Estate Brokerage Company, one of biggest companies of its kind in HCM City, said that the number of houses sold in the last month was 5 fold higher than that before Tet. ACB’s Real Estate Trading Centre has also reported that successful transactions were double the transactions before Tet.

Vo Dinh Quoc, Deputy Director General of ACB Real Estate Trading Centre, said that the deals now had high values, at VND5-6bil, while transactions before Tet were valued at below VND3bil.

Mr Quoc, when asked to comment about the real estate market in the first months of the year, said that the market was ‘abnormal’. He said that the market in the last month was similar to the one seen in 1999-2000. People are rushing to buy houses and land not because they need accommodation, but because of psychological reasons.

According to Mr Quoc, brokerage companies have been known to play tricks to push prices up. For example, they raise the selling prices by 5-7% a day, which makes people believe that land prices will increase further, and urge them to rush to buy land.

Once people rush to buy land, it is quite normal for trading companies to raise the selling prices again and again.

Mr Quoc said that the hot stock market had impacted the real estate market as successful securities investors inject money in real estate projects, but he said that the capital injected by securities investors was not big enough to cause such a land fever as seen nowadays.

Source: Lao dong