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HCMC Land Fetches Record $1 Million for 10m2

According to experts, the price of land in Thu Thiem Peninsula has increased to a record 2.4 billion VND (104,000 USD) per square meter, and this will affect all housing segments. The banquet price on the election of a plot of land in the new urban area of Thu Thiem in District 2 ranges from VND 470 million to VND 2.4 billion per square meter, 4-8.3 times higher than the starting price of the competition. price on December 10. In the downtown area in District 1, the current highest land price is 1.5 billion VND/m2.

Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, predicted that the record price would trigger a new land fever. In the past, such land rushes were short-lived, but this new one could last longer as more land auctions are expected to be held in the near future.

Mr. Huynh Phuoc Nghia, a senior expert of Global Integration Business Consulting Company, said that the high winning bid will create an incentive for real estate project investors on Thu Thiem peninsula to consider and increase price. According to him, the high prices of land plots, villas, houses and apartments on the peninsula will increase prices in neighboring areas in a short time, especially in Thu Duc city; and even throughout HCMC in the long run. Before the auction, many people had predicted that real estate prices in Ho Chi Minh City would increase by about 30% by 2022.

Mr. Nghia said many people were afraid that land prices were being inflated above their actual value. The price of high-end properties built on land that costs VND2.4 billion per square meter would surge to dozens of billions of VND for even one-bedroom apartments, many times higher than the current market price. “The virtual land price will rob growth opportunities for industries that use space such as commerce and manufacturing, which is not beneficial and can even harm the economy,” he said that

Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, said that after the record of land prices on December 10, the concept of “central area” of Ho Chi Minh City has officially changed.

People traditionally regard the downtown area as District 1 surrounded by Nguyen Hue, Dong Khoi and Le Loi roads, which has always had the highest land prices. With land prices on the Thu Thiem Peninsula topping that, the downtown can be understood as an expanded area that includes areas along either banks of the Saigon River, Mr. Chau said.

Potential land price hikes will pose big challenges to HCMC’s plans for stabilizing housing prices and could completely waylay them, he said, adding that the hikes will directly affect all segments of the real estate market.

In the immediate future, the price of luxury and super-luxury real estate segments will establish a new price level and the selling prices of the high- and mid-end segments will follow suit, he predicted. In the two years that Covid-19 has impacted the city, almost no low cost housing project has been implemented, Mr. Chau noted. With higher land prices, input costs for low cost housing projects will surge, forcing investors to abandon this segment, he warned.

Source: VnExpress International

Author: Trung Tin

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