Prices of land in Hanoi’s suburban areas have been increasing two or three times over the last few months, resulting in both positive sentiment and concerns over the suprising rise. 

Upgraded infrastructure in Hanoi's Gia Lam district. Photo: Pham Hung/Kinhtedothi

The momentum becomes familiar in the outlying districts of Hoai Duc, Thach That, Dong Anh and Ba Vi where intensified investment in infrastructure, new property projects and high demand are all seen.

Increasing prices

Some areas of Dong Truc and Thach Hoa communes in Thach That district and Yen Bai, Van Hoa, and Tan Linh communes of Ba Vi district record a two-fold increase than before, according to Kinh te & Do thi Newsppaper. 

Nguyen Quoc Tuan, a real estate broker working in Di Trach commune, Hoai Duc district, supported the idea by taking Kim Chung Di Trach New Residential Area as an example, saying that the project is invested by Vietnam Trading Engineering Construction Joint Stock Company (Vietracimex) saw a three-fold increase in the prices of shop houses compared to that in 2008.

Regarding infrastructure, Chairman of Hoai Duc district Nguyen Hoang Truong said the local authorities since mid-2019 have finished site clearance for a belt road and started building a road connecting the surrounding districts in October 2020 .

However, representatives of Vietracimex said the improved infrastructure has made no impact on the company’s property prices and surrounding projects. So far, the investor has not re-launched the project and listed the prices yet. The growing prices are merely made up by estate agents.

Concerns remain

Some experts attributed the price hike to the supply scarcity. But they warned that the momentum persists with significant support by real estate agents, resulting in some concerns about “price bubbles” that might distort the market.

Giving explanation for the momentum, Nguyen Van Dinh, the vice chairman of Vietnam Association of Realtors (VARS), said the suburban districts are home to affordable segment that has maintained high occupancy, around 70%. The excess demand of land is also another reason, he noted.

“The prices in some areas have been pushed up. It becomes unreal for people’s affordability and has kept investors away due to high compensation and thin profits,” Kinh te & Do thi Newspaper quoted Mr. Dinh as saying.