Land prices increase rapidly following merger news with 'speculative elements'

Land prices in many provinces and cities with merger information increased by more than 20% in a short period of time, posing many potential risks to the market, according to the Ministry of Construction. In the first quarter market report, the Ministry of Construction said that housing and land transactions fluctuated compared to the previous quarter due to information about mergers of provinces and cities. The whole country had nearly 33,600 individual housing transactions, up 32% quarter-on-quarter. The land segment also recorded more than 101,000 transactions, up more than 16%. Regarding selling prices, the Ministry said that in provinces and cities with information about being the location of new administrative agencies, land prices were pushed up. For example, in Phu Tho, some residential areas, even abandoned urban areas in Van Phu, Trung Vuong, Tho Son, Thanh Mieu, and Gia Cam wards, were advertised for sale with land prices 20-30% higher than the same period last year. In Hai Phong, land prices in Kien Thuy, An Dong, and Thuy Nguyen increased by 15-20%. Similarly, in the South, land prices in some areas of Nhon Trach (Dong Nai) increased by about 20-30%, in some places by over 40% compared to the same period in 2024. "The increase in land prices and transactions has speculative elements, posing many risks to the market," the Ministry of Construction assessed, saying that management agencies in many localities have warned about the above situation and have strengthened control and management of the market. According to VnExpress, at the beginning of the year, real estate in many localities with information about mergers and administrative centers showed signs of local heating. Land prices in many places such as Hung Yen City, Van Giang District (Hung Yen), Viet Tri City, Ninh Binh City, Bac Giang City... have been bustling to increase by 5-15% compared to the end of last year. Many landowners even increased prices by more than 30% to benefit from the merger wave. In the southern region, the interest and selling prices of areas such as Binh Duong, Ba Ria - Vung Tau or Nhon Trach (Dong Nai) also tend to increase rapidly. Data from the Batdongsan channel shows that selling prices in some areas show signs of "heating up" when they have increased by 20-30% compared to the end of last year.

Image of a land project in Nhon Trach, Dong Nai . Photo: Phuong Uyen

Land prices quickly cooled down in the beginning of the second quarter, when rumors did not come true in some localities. Typically, in the Dong Nai real estate market, there was a situation of deposit cancellation because investors could not arrange capital in time even though the payment deadline was coming.

Data from real estate service company DKRA Group shows that since April, demand for buying in Nhon Trach and Long Thanh has begun to cool down by 20-30%, price growth has slowed down and there has been a situation of deposit cancellations because these localities are not merged into Ho Chi Minh City as previously "rumored".

Many experts have warned about the situation of losing money on the rumor wave. Mr. Pham Duc Toan, General Director of EZ Property Company, said that chasing the "land fever" makes investors easily fall into the situation of buying high and selling low, even losing liquidity, burying capital for many years.

Recalling the time 17 years ago, before Ha Tay merged into Hanoi and the National Assembly pressed the button, the situation of "jumping" land prices, people rushed to buy land once swept this market. A series of segments from residential land, land plots to service land, garden land... were all pushed up 2-3 times after half a year. However, when the information about the merger officially took effect, the psychology of buying and selling according to expectations also decreased very quickly.

Mr. Toan said that areas that were once predicted to be the strongest "wave-catching" places sometimes had to reduce prices deeply to gain liquidity. Many venture capitalists used leverage to rush into the land fever, then struggled to "cut losses" to quickly withdraw money, otherwise they would lose their assets.

A group of brokers offers land plots for sale in suburban districts of Hanoi. Photo: Anh Tu

At a recent meeting with ministries, Deputy Prime Minister Tran Hong Ha also commented that the real estate market still shows many signs of instability. He pointed out that the rate of increase in real estate prices in Vietnam is among the highest in the world , while people's ability to access housing is decreasing. This is a worrying situation.

The Deputy Prime Minister said that it is necessary to study taxing fallow land and slow-moving projects. However, he noted that this requires a clear distinction between real housing needs and speculation, in order to avoid double taxation, which would affect people using legal real estate.

The Ministry of Construction said it will work with other ministries and sectors to study a pilot project for a real estate and land use rights transaction center managed by the State. This solution is expected to increase the openness and transparency of real estate transactions.

The agency also recommended that the Ministry of Finance proposes a tax policy to limit speculative activities, including studying the option of collecting taxes on the difference between transactions.

According to vnexpress.net

Source: https://baoapbac.vn/lanh-te/202505/gia-dat-tang-nhanh-theo-tin-sap-nhap-co-yeu-to-dau-co-1043035/