After ThuThiem auction, people line up to buy land worth millions of dollars
Although Thu Thiem land auction winners have withdrawn their purchase contracts, the land market in Ho Chi Minh City remains hot and prices for some projects are rising.
The HCM City real estate market is experiencing a new wave of price increases. After being affected for two years by Covid-19, the market showed signs of improvement, particularly in the market segment of landed houses and luxury villas.
Some land house projects in Thu Duc City launched in the market have exorbitant prices.
One example is the 117-hectare project in An Phu district in Thu Duc city. At a recent event, the developer announced the planned price of VND 38 billion for the townhouse project. The area of each product is 100 m², while the land houses of the project have prices of 400 million VND per m², excluding VAT.
A villa project in ThuDuc City was introduced at a price of VND 100 billion for each product. There were only 13 products, so they sold out in no time.
More recently, the owner of a Sai Gon waterfront project in Hiep Binh Phuoc district of Thu Duc city launched 27 villas and boutique houses with sales prices of VND 160 billion and VND 60 billion per product. , respectively.
The exorbitant sale prices of landed houses in these projects not only surprised investors, but also brokers. However, they are located on advantageous positions and have good amenities, while supply is low.
The owner of a property trading floor that distributes commercial stores in a project in An Phu said he only has five products to distribute. People who want to buy products must pay a deposit of 100 million VND. However, the basket of products being limited, the trading room had to organize a draw.
Experts say the results of the Thu Thiem land auction had a big impact on the land market in HCM city. Although the auction winners canceled the purchase contracts, this did not dampen the market. The prices of some new projects have even reached a new high. The wave of price increases occurs not only in new projects, but also in the secondary market.
Townhouse prices on Nguyen Co Thach Road in Thu Duc City, for example, have risen from VND 35 billion to VND 45-47 billion. Luxury apartments in the area trade at 180-22 million VND per m².
Le Hoang Chau, chairman of the HCM City Real Estate Association (HOREA), said after the release of ThuvThiem’s auction results, land prices in ThuvDuc City started to climb.
He warned that the high ThuvThiem auction prices will have a negative impact on the real estate market. This will hamper the housing price reduction program.
In HCM City, it is almost impossible to find housing projects with sales prices of 30 million VND per sqm.
“Land prices that are too high, which are higher than the real value and do not keep up with supply and demand, could be a double-edged sword that would be detrimental to consumers and developers. If developers set high prices that are not accepted in the market, it will lead to high inventory,” he warned.
Experts have said that if housing supply is short and the market heats up, if developers push prices up, it will hurt the whole market, leading to another housing bubble.
“New projects with exorbitant prices don’t really reflect the ‘health’ of the market. A sustainable market must have a balance between supply and demand. As the prices of high-end products continuously climb to new heights, affordable products do not appear in the market,” said the owner of a real estate company in Thu Duc City.
A new report from HCM City People’s Committee shows that housing supply in the city in 2021 has decreased by 35.58%. The structure of the product does not meet the needs of sustainable development and social security.
In principle, the supply of affordable apartments should represent the highest proportion. But, in fact, the supply went from 1% to 0%. The proportion of mid-range apartments decreased from 59.6% to 26%. Meanwhile, high-end apartments have risen from 42% to 74%. These are indicators of a market that lacks sustainability.
In 2021, HCM City had 20 projects with 14,443 products that met the requirements for raising capital and selling products that will take shape in the future. Only one project, with 528 units, has completed construction.
Thu Thiem land auction scandal reveals worrying issues
In many cases, companies offered high prices at land auctions and then canceled the purchases. This created artificial land prices that allowed them to corner the market and buy and sell other land for illegal profit.
Another investor wants to cancel the contract for land in Thu Thiem
After Tan Hoang Minh Group, Binh Minh Trading and Development Investment Co. Ltd., which won the bid for the land lot coded 3-9 in Thu Thiem New Urban Area in Thu Duc Town of HCMC , offered to cancel a contract to purchase the land.