Land price hike from real estate speculators

Land prices around the Long Thanh Airport Project (Dong Nai) increased compared to 2019. Photo: Internet

Prices of all types of apartments increased in 2020

Regarding the price of houses and other types of real estate in big cities, according to a report by the Ministry of Construction, apartment prices in Hanoi and Ho Chi Minh City (HCMC) tended to increase in the fourth quarter and the whole of2020.

A summary of apartment transaction prices in the two markets showed that the average apartment price (including affordable, mid-end, and high-end apartments) in the fourth quarter increased by about 2 -3% in Hanoi, and about 3-4%in HCMC compared to the fourth quarter in 2019.

“In 2020, the price of all apartment segments went up. However, each type had a different rate. In particular, affordable apartments reached the strongest rate, followed by mid-end units,”said the Ministry of Construction.

Accordingly, affordable apartments (less thanVND25 million per m2) are very few, mostly available in areas far from the center with underdeveloped infrastructure. In Hanoi, there are some social housing projects for sale at aprice of less than VND20 million per m2, including:Thanh Tri IEC social housing, CT3-CT4 Kim Chung, Ecohome in North Co Nhue - Chem, and some low price commercial housing projects such as PhuThinh Green Park, Ha Dong, and Tasco Xuan Phuong Apartment.There are almost no apartment projects atless thanVND25 million per m2 in HCMC.

Concerning mid-end apartments (fromVND30 million to more than VND40 million per m2), in Hanoi, most of the new apartment projects are in the mid-end segment, concentrated in Ha Dong, Thanh Xuan, CauGiay, and Gia Lam Districts. In Ho Chi Minh City, the segment has higher prices, ranging from about VND35-45 million per m2.

For high-end apartments (more thanVND50 million per m2), in Hanoi and HCMC, many new projects built with high qualityannd luxury equipment are costly, specifically: The Nine - Pham Van Dong luxury apartment building costs about VND50 million per m2, the Matrix one apartment costs VND55-60 million per m2, Project D'. Le Roi Soleil - Quang An has a price of about VND80 million per m2, and Grandeur Palace Giang Vo project costs about VND80 million per m2; The Tresor - District 4 costs about VND60-70 million per m2, Saigon Royal Project - District 4 has price of about VND90 million per m2, and Sadora apartment project - District 2 costs about VND70 million per m2.

“Accumulation of constant increases led to significant changes in the price of apartments. Some projects belonged to the affordable segment but now are in the mid-end segment, exceeding the affordability of low-income people in big cities,” said the Ministry of Construction.

Land prices increased in some localities

The pricesof individual houses and land plots tended to increase more than in 2019. However, the increase was different between localities as well as in each certain area of every locality.

Based on the average price in the province, city or district level, the price of individual houses and land plots in localities increased about 3-5%. However, according to market research units, there has been a significant local increase in the price of projects in some localities.

Specifically, in Hanoi, some villages and communes in Son Tay, Hoa Lac, Thach That, andHoai Duc areas hadaprice of VND25-30 million per m2, an increase of 50% compared to 2019. The land prices in Dong Anh, Gia Lam, and Long Bien also increased by about 20-30% compared to 2019.

In HCMC, after the information that the city will merge District 2, District 9 and Thu Duc District into a new city, housing prices in these districts have continuously risen.

For example, on Nguyen Xien, Nguyen Phuoc Thien, Hoang Huu Nam, and Nguyen Van Tang Streets in District 9, land prices reached VND100 million per m2.

In Truong Tho ward, Thu Duc district, land pricesrose fromVND40 - 50 million per m2 to VND70 - 90 million per m2, an increase of about 40% compared to 2019.

In Dong Nai, with the advantage of beingeast of HCMC and the investment in building Long Thanh airport, the average land price rose from VND12-14 million per m2 in 2019 to about VND22 million per m2; and the land prices in Long Thanh town in some placesreached to VND100 million per m2.

However, the Ministry of Construction said according to the evaluation of market research units, the sharp and local price increase in some areas mainly took place between speculators.

Along with the price increase due to infrastructure investment in certain cities and projects, real estate speculators took advantage of preparing urban planning, preparing to build infrastructure projects, and expanding urban areas toincreaseland price to gain illegal profits.