Real estate prices are increasing virtual?

Land prices increase exponentially

According to statistics of real estate market research organizations, the price level in all segments tends to increase. In which, land plot is the segment that recorded the fastest price increase. According to the survey, within a year alone, land prices in the suburbs of Hanoi increased by an average of 30%. Notably, information about Ring Road 4 has caused the land along this road to increase dramatically. In Soc Son, recorded in Tan Minh, Minh Tri, Minh Phu, Hien Minh, Duc Hoa communes, real estate prices doubled. Some land plots also appear to have increased by 5.6 times.

Real estate prices are increasing virtual?  - Photo 1.

In rural areas such as Hai Duong, Thai Binh and Hung Yen, land prices fluctuated strongly, increasing from 2-3 million VND/m2 to 5-7 million VND/m2. Even some rural land plots cost up to billions of dollars with an area of ​​80-90m2, located in an area with no potential for infrastructure change.’s residential land market report said that in the first quarter, many provinces and cities in all three regions of the North – Central – South recorded high prices for land plots on online markets.

For example, in Hanoi, the price of residential land in Chuong My district is 74% higher than in 2021, the highest increase in the North and the whole country. Other districts in Hanoi such as Dong Anh, Gia Lam and Quoc Oai recorded a 20-26% increase in the price of land plots.

In addition, Bac Giang also increased 35%, Hai Phong increased 29%; Bac Ninh and Quang Ninh respectively recorded a 16-20% increase in land prices.

In the Central region, residential land in Binh Thuan increased by 13%, Khanh Hoa by 26% and Thanh Hoa by 35%. The selling price of land plots also fluctuated strongly, in Lam Dong, Khanh Hoa and Da Nang provinces, the number of online users searching for land plots increased by 41%, 35% and 32%, respectively.

Price is increasing virtual?

Looking at the movement of real estate prices, it can be seen that the growth rate is not stopping. The explanation of the Vietnam Association of Realtors (VARs) related to the continuous increase in prices despite Covid-19 is because the process of forming new cities is leading the price increase process. In addition, the shortage of supply, safe-haven cash flows and the expectation of a stimulus package are also the reasons why the housing and land market in many places has established a new price level.

However, VARs believe that the market is showing signs of a local price bubble. House prices increase but liquidity is low.

Previously, experts of once said that concerns about price slippage and inflation when money is pumped into the market through economic stimulus packages and disbursement of public investment, the need to accumulate assets. Property attached to land as a safe haven channel will increase this year, so the land plot segment will continue to receive much attention, along with the price will increase.

In the view of VARs, this unit believes that, although the interest and price increase, the liquidity of land plots is not necessarily proportional to the increase, because it depends on many factors.

According to real estate experts, the rapid price growth of some areas has shown the phenomenon of “virtual prices”. That is, real estate prices increase beyond the threshold of real value at present. Mr. Manh, leader of a real estate company in Hanoi, said that real estate prices increased too strongly, not based on actual value. Mr. Manh analyzed, for example, that information on Ring Road 4 appeared, land prices increased by 4.5 times while the road had not been started or built. So that means the price has been calculated to increase at future milestones. It is a virtual increase in price.

Experts from also recommend that the price increase too high and the transaction volume is low is the reason that individual investors, especially investors using financial leverage, need to consider. carefully before investing.

Meanwhile, VARs recommended that, in order to keep the market stable, state management agencies are focusing on strengthening mechanisms, legal corridors, credit policies…

According to Trieu Vuong

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