Beware of "land fever" before information about province and city mergers

Is the land market really "stirring up" due to merger rumors?

The plan to merge provinces and abolish the district level was requested by the Politburo to be studied and implemented urgently, not only as an administrative issue, but also opening up many opportunities and challenges for the economy, especially the real estate sector. Although there is no official information yet, land prices in many areas subject to merger have been pushed up several times in a short period of time.

According to Mr. Nguyen Van Chung (a long-time investor in the real estate sector), land prices in Rach Gia City (Kien Giang Province) have increased sharply by 20% - 30%, a significant increase compared to previous land prices. Land transactions are advertised at higher prices than actual prices, attracting attention and a large number of investors. This is creating strong fluctuations in the land market. The main reason is the rumor that An Giang province will merge with Kien Giang province, with the expected headquarters of the new province being located in Kien Giang (?).

In addition to Mr. Chung, a “land broker” named Le Minh T., operating in Kien Giang, also said that information about the merger has caused land prices in many areas in Kien Giang, especially Rach Gia City, to increase sharply. Mr. T. said: “In just a few months, land prices in some areas have increased from VND20 million/m2 to VND28 million/m2. In particular, areas near newly opened traffic routes or near infrastructure projects have increased more sharply.”

Another investor, Ms. Tran Thi Lan, said that she invested in land in the areas subject to the merger as soon as the information was available. Ms. Lan shared: “I see that land prices in these areas are still below the actual price compared to the expected development. The opportunity for price increase is huge, especially when the planning is implemented.”

The nature of "land fever"

In the past, we have witnessed many land fevers, each with its own causes. However, the common point is that when there are rumors, land prices are often pushed to very high levels. When these rumors die down, or when official information is not as expected, land prices will fall rapidly, even sharply, causing the market to become quiet.

A clear example is that in 2008, before Ha Tay merged into Hanoi, land prices in Ha Dong only fluctuated between 12 and 15 million VND/m2. However, after the merger, the infrastructure of this area has developed strongly with expanded traffic routes and metro station projects, causing land prices here to skyrocket to more than 100 million VND/m2 in just a few years. This has made many people expect further development in the areas where there is information about the merger, although it is just a rumor.

What are the risks for investors?

Investors need to be clearly aware of the potential risks when participating in the real estate market. One of the major risks is investing in areas without clear planning or unsynchronized development. This can cause real estate values ​​to plummet if the implementation progress does not meet expectations. In addition, buying land in areas where prices only increase due to rumors or market excitement can cause investors to "bury capital" when land prices cannot maintain the increase. Furthermore, investors also face legal risks if they do not carefully check the project's legal documents and records.

Investors need to stay alert and avoid being swept away by the crowd. Thoroughly researching land prices in the area they intend to invest in, along with keeping up with planning progress, will help accurately assess risks and development potential. When investing in real estate, thorough research and making decisions based on real data will help minimize unfortunate risks.

NGUYEN TRI

Source: https://baoangiang.com.vn/kinh-te/tieu-dung-thi-truong/canh-giac-voi-con-sot-dat-truoc-thong-tin-sap-nhap-tinh-thanh-pho-a418080.html