Price of land on the rise in HCM City

Land prices in HCM City and neigbouring provinces are increasing, with real estate industry insiders attributing it to high liquidity.– Photo phununews.vn

Nguyen Quoc Anh, deputy director of Dai Viet Group, said prices have been rising in all districts in the city since the end of last year.

He quoted real estate website batdongsan.com.vn as saying that land prices surged 51 per cent last September.

They are up 34 per cent in Thu Duc District, 54 per cent in Hoc Mon, 37 per cent in Binh Tan and 13 per cent in District 7.

Anh said that since the end of last year demand has been strong, with both speculators and people with actual housing needs buying.

Nguyen Thanh Trang of District 7 said she bought land in Binh Tan and made a profit of over 30 per cent within half a year.

Brokers said areas where prices have increased are ones where residential projects are mushrooming or infrastructure would be improved in future.

Explaining further, they said when an apartment or housing project is announced, land prices jump in the vicinity.

A year ago a 60sq.m piece of land in District 9, 15km from downtown, cost VND600 million (US$28,000). Now the same land costs VND800-900 million ($40 million).

Prices in more central parts have risen even more.

For instance, in Linh Dong Ward of Thu Duc District, 8km from downtown, now costs VND18-25 million ($810-1,100) per square metre. A year ago it was only VND14-16 million ($636-720).

The rise is attributed to the new Pham Van Dong Street which runs to the Go Dua traffic intersection.

Furthermore, three apartment projects are being developed on this road.

Districts 7 and Nha Be too have seen prices jump after authorities indicated several bridges would be built there and many streets expanded together with flyovers and tunnels.

Neighbouring provinces like Dong Nai, Binh Duong, and Long An where tourism is developing are also seeing land prices go up sharply.

Brokers said liquidity is very good in these markets, with buyers coming from HCM City and elsewhere and acquiring lands without haggling much.

But as prices go up, some are reminded of the property bubble that burst in 2008-10.

Le Hoang Chau, chairman of the HCM City Real Estate Association, admitted that the risk of a bubble exists and said buyers should exercise caution when investing.