- Your Consultant
- Green Growth
|Land hunters headed to where a coastal road system was approved. Photo: Ngoc Tan|
A day at Ngu Thuy Bac commune in Quang Binh province starts very early with investors and brokers gathering at the local hamlets to buy and sell land. The roads of the commune are lined with printed and handwritten banners advertising land for sale.
The local land fever started only two weeks ago with the announcement from Quang Binh authorities to approve the VND2.2 trillion ($96 million) construction of a coastal road system along Quang Trach, Bo Trach, Quang Ninh, Le Thuy, Ba Don town, and Dong Hoi city.
The news quickly gave rise to speculation among locals and brokers from the neighbouring provinces, as improved connectivity and faster transport usually have a buoyant effect on property prices.
According to one resident of Tan Hai village in Ngu Thuy Bac commune, 10 years ago, she bought a 300-square-metre resettlement land plot for VND27 million ($1,200).
Thanks to the new project, she recently sold the plot for VND1.65 billion ($72,000). She added that since the fever had begun, her tranquil fishing village has been bustling with vehicles and strangers.
After several rounds of changing hands without authority approval, agricultural land plots which previously fetched VND100 million ($4,400) each have surged to VND1.5-1.7 billion ($65,000-74,000).
This tremendous appreciation, according to local land broker Le Xuan Huy, poses a very real threat of a price bubble.
“There are some real investors wish to buy land to actually set up projects but they cannot accept the current price level for land without essential supporting infrastructure or facilities. I have met many investors who abandoned plans due to land prices spiralling out of control,” Huy said.
The case is not rare in Vietnam and the Central Coast where land prices tend to skyrocket overnight after rumours of a property giant buying land, or the government approving a key infrastructure project.
These rumours can attract thousands of buyers and brokers, although experts and local authorities point out that these rushes of buying and selling often cool down after only a few weeks.