Why is land price in Nghe An increasing?
(Baonghean.vn) - 2020 is a memorable year for land and real estate business. After a slow and quiet start in the first and second quarters due to concerns, starting from the third quarter, land transactions became more active and towards the end of the year, there were more transactions and prices increased.
"Reversing" the rural land market
Anyone interested in the market and land transactions can easily feel that 2020 is quite special and unpredictable for this field. If in previous years, the price increase belonged to the apartment segment or land in the urban center, then in 2020 the "reversal" advantage belonged to the rural land area and the suburbs of urban areas.
According to an expertreal estateIn Vinh City: The reason for the above "reversal" is that after the Covid-19 pandemic was controlled from the end of the second quarter, land auctions were reopened. Because land auctions are all organized in the form of indirect voting, the phenomenon of small "land brokers" participating in haggling and raising prices no longer exists, but has now shifted to a new form of real estate floors participating in auctions and are considered "shark" investors in the rural and suburban land market.
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| Due to investment in basic infrastructure, the land plot in Hamlet 5, Nghi Phu Commune (Vinh City) with dozens of lots put up for auction will bring revenue to the budget. Photo: Nguyen Hai |
In the role of a person who wants to buy land as well as directly learning at land auctions, we found that, unlike every year, most of the auctions of districts and cities, from Hung Nguyen, Nghi Loc or Do Luong, Dien Chau, Quynh Luu, Yen Thanh... have "shark" investors with quite strong financial capacity and knowledge of planning and engineering of land plots, so they often choose to bid for the best lots, along with bidding at a competitive price, so they often win over small investors.
Not only that, they often buy in large quantities, accounting for 20-40% of the lots, so they easily influence the price level. Specifically, in Hung Thong commune (Hung Nguyen), the commune put up for auction 22 lots, but "shark" investors bought nearly 10 lots; in Quynh Hong commune (Quynh Luu), the first batch of 91 lots put up for sale, and an investor from Dien Chau bought nearly 40 lots. Similarly, in Yen Thanh, Dien Chau and Do Luong districts, the situation is similar, so the total land value has nearly doubled.
Similarly, recently, “land brokers” have also joined forces to form companies of 5-7 members, each member contributing 2-3 billion VND for auctions. The participation of new “shark” investors in the market has created interesting competition in land auctions and partly pushed up land prices.
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| Due to investment in basic infrastructure and favorable location, the auctioned land in Quynh Hong had the highest auction price in Quynh Luu district in 2020. Photo: Nguyen Hai |
The representative of the Auction Service Center under the Department of Justice said: Although we know that auctions with the participation of large investors will impact and affect land prices at the auctions and people who really want to buy land are losing money, but because the state regulations are allowing it and more importantly, it brings revenue to the budget, we must comply.
At the area of way 2 parallel to the 35m road in Nghi An commune (adjacent to National Highway 46), a landowner here said: Normally, the land price in this area is only 4-5 million VND/m2But since August, because many people have asked, the price has been pushed up to 8-9 million VND/m2. Similarly, in Vinh City, the area bordering the 35m road from Nghi An commune to Hung Hoa commune and the resettlement area of Nghi Duc commune, the 24m road in Hung Loc commune, the 72m road area in Quan Bau ward has doubled in price. Specifically, at the end of last year, these areas fluctuated between 12-15 million VND/m2At this time, it has been pushed up to 19-20 million VND.
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| Land plot on 35m road in Nghi Duc commune has doubled in price compared to the auction time. Photo: Nguyen Hai |
Recently, the land prices in the city have increased rapidly, not only in areas with good locations but also in deep areas where prices have not changed for a long time, but now they have increased even more. On average, every day, the Vinh City Land Use Rights Registration Office confirms 40-50 transactions of transfer, sale and subdivision of land.
Investment capital flows to real estate
Faced with the bustling land transactions and rising prices at the end of the year, Mr. Nguyen Quoc Khanh - Chairman of Nghe An Real Estate Association explained: In 2020, due to the Covid-19 pandemic, people's psychology was somewhat affected, with a tendency to choose safer capital shelters.
In previous years, in rural areas,remittancesMoney sent back by children is saved or invested in production and business, but now it is being converted to buying land to keep the money. On the other hand, after initial worries due to the pandemic, but then land prices did not drop sharply and had an upward trend, so people boldly invested in buying land, so the heat increased.
A resident in Xuan Huong hamlet, Nghi Duc commune shared: His family has a resettlement land plot that they do not need to use and need money so they put it up for sale; every day they receive 3-5 customers asking to buy it. Although the land plot has been sold for about 30% more than before, the demand for land is still high, people from Yen Thanh and Do Luong areas come down to ask to buy it so that their children can go back to Vinh city to study and work.
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| Apartment building in Vinh Tan New Urban Area Project (Vinh City). Photo: Nguyen Hai |
Explaining the increased demand for land purchase, from his perspective, the representative of the Infrastructure Construction Joint Stock Company in Nghi Phu Commune (Vinh City) said: Compared to previous years, the current volume of construction is much less, so instead of spending money to find construction, he himself knows that many land planning areas have value, so he switched to investing in land auctions, which is more profitable and safer. If things go well, just spend 10 billion to buy 5-7 plots of land, after a few months, making a profit of 1-2 billion is normal, more effective than doing construction.
On the other hand, from a macro perspective, in 2020, the State Bank adjusted interest rates, interest rates dropped sharply, so instead of leaving them in the bank, people withdrew their savings to buy land. Although there are no official statistics from the State Bank on the amount of money people withdrew from banks, discussions with some bank transaction offices in the area show that thousands of billions of dong from people's banks have been transferred to other investment channels.
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| Resettlement area in Nghi An next to 35m road has price from 16-18 million per m2Photo: Nguyen Hai |
Currently, the planning areas in the districts are put up for auction, the technical infrastructure is basically invested, and the traffic is convenient. To ensure safety, people should avoid buying plots of land with poor drainage infrastructure and unclear planning; when buying, they should choose reputable trading floors, clear land documents and must carefully understand the planning.
