Why is Nghe An land price increasing?

Article: Nguyen Hai - Editor: Lam Tung DNUM_AHZABZCACB 07:06

(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 belongs 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 price manipulation is no longer present, 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.

Do đầu tư hạ tầng cơ bản, khu đất xóm 5 xã Nghi Phú (TP. Vinh) với hàng chục lô được đưa vào đấu giá sẽ mang lại nguồn thu cho ngân sách. Ảnh: Nguyễn Hải
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 and directly learns at land auctions, we realize that, unlike every year, most 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 land techniques, 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), in the first phase, the commune put up for sale 91 lots, 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.

Mr. Dang Ngoc Binh - Vice Chairman of Quynh Luu District People's Committee said: The starting price of the land lot is only 1.1 billion VND, for a long time, bidders have only bid from 1.15-1.2 billion VND/lot, but "shark" investors bid up to 1.5 billion VND/lot, so it is easy to win the price. After winning the bid, they can wait for a new price to sell but are also willing to resell immediately if it is profitable. In fact, most of the land lots are then resold with a difference of 70-100 million VND/lot.
Similarly, recently, “land brokers” have also joined forces to form companies of 5-7 members, each member contributing 2-3 billion VND to bid. The participation of new “shark” investors in the market has created interesting competition in land auctions and partly pushed up land prices.

Do đầu tư hạ tầng cơ bản và vị trí thuận lợi nên khu đất đấu giá ở Quỳnh Hồng có giá đấu cao nhất Quỳnh Lưu năm 2020. Ảnh: Nguyễn Hải
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 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.

Having the opportunity to survey and learn, we learned that not only the land plots put up for sale by districts building infrastructure, but also theland in the suburbs of Vinh cityand neighboring districts of Vinh city such as Nghi Loc and Hung Nguyen all have the participation of large investors in land auctions, causing the general land price level to increase by 30-50%.

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/m.2. 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, the land price has doubled. 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.

Khu tái định cư đường 35m xã Nghi Đức giá đất tăng gấp đôi so với thời điểm đấu giá. Ảnh: Nguyễn Hải
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 land transfer, sale and subdivision transactions.

Mr. Le Quoc Tuan - Director of Vinh City Land Use Registration Office

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 a safer capital shelter.

In previous years, in rural areas,remittanceBecause children send money back home to save or invest in production and business, now they switch to buying land to keep the money. On the other hand, after initial concerns 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: The 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 at a price 30% higher than before, the demand for land is still high, people from Yen Thanh and Do Luong areas come down to buy it so that their children can return to Vinh city to study and work.

Chung cư thuộc Dự án Khu đô thị mới Vinh Tân (TP. Vinh). Ảnh: Nguyễn Hải
Apartment building in Vinh Tan New Urban Area Project (Vinh City). Photo: Nguyen Hai

Explaining the increased demand for land, from his perspective, a representative of the Infrastructure Construction Joint Stock Company in Nghi Phu Commune (Vinh City) said: Compared to previous years, the volume of construction works is much less, so instead of spending money to find construction works, 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, he only needs to spend 10 billion to buy 5-7 plots of land, after a few months he can make a profit of 1-2 billion VND, which is normal, more effective than doing construction.

Because land prices are on the rise, some contractors have construction machinery that is not working and will break down if left idle, so they have to sell their construction machinery and equipment to buy land. A contractor in Hung Loc commune (Vinh city) explained: Machinery and equipment worth tens of billions of dong and without a project, will break down and need maintenance if left idle, so it is better to sell the machinery and buy land in plots of land with good planning.
On the other hand, from a macro perspective, in 2020, the State Bank adjusted interest rates, interest rates decreased 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 VND of people from banks have been transferred to other investment channels.

Khu tái định cư tại Nghi Ân bên cạnh đường 35 m có giá từ 16-18 triệu mỗi m2. Ảnh: Nguyễn Hải
Resettlement area in Nghi An next to 35m road has price from 16-18 million per m2Photo: Nguyen Hai
Although land transactions in Nghe An have not shown any signs of price fever, through discussions with leaders of some localities, land prices in some areas have shown signs of abnormality when prices are inflated, higher than the real value. Some plots of land along the 72m Vinh - Cua Lo road or the 35m Nghi An - Hung Hoa road, some land plots in Dien Chau, Do Luong were bought and sold many times or had too many people asking to buy before being "finalized" for sale to a customer with real demand.

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 land plots with poor drainage infrastructure and unclear planning; when buying, they should choose reputable trading floors, clear land documents, and must carefully study the planning.

Mr. Nguyen Quoc Khanh - Chairman of Nghe An Real Estate Association


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