Since the beginning of the year, many investors and brokers have taken advantage of the expanding urban plan to speculate lands and push the land price up high. Typically, in Hoai Duc (Hanoi), land prices in many places increased by 30-50% compared to the end of 2018. The same situation happened for Dien Ban (Quang Nam province) as speculators spread the rumor of merging the district into Da Nang city. The price of agricultural land by then has increased to VND600 million for 100-sqm land plot. In Bien Hoa (Dong Nai province), prices of land plots increased by 3 to 4 times compared to a few years ago when the rumour that said 6 communes in Bien Hoa would be “officially” presented as wards from July 1.
Notably, despite the climbing price, there is no actual transaction. It turned out that they are all “fake news”. So as the investors rushing to catch the “golden chance”, they poured money into the market without a second thought. Many people even quit their jobs to become an investor or broker in the real estate market.
From these incidents, it is nothing more than an old-fashion scenario with unclear master plans and rumours. As people fell for the same trick, the land price is pushed up. So how to distinguish the fault alarm with the actual property fever?
Aswering this question, Mr. Vu Duc Ngoc, Business Director at Kosy Group has made specific comments in the talkshow Having appointment with real estate Ep. 2 by Batdongsan.com.vn.
According to Mr. Ngoc, the boundary between fake and real property fever is very fragile.
“Fake fever” occurs when the market value of a product is much higher than its actual value due to the fake news of construction plan approval, which often followed by an instant drop once there is a delay in deployment. Meanwhile, in the real property fever, the news is real and the specific implementation time has been determined.
Besides, the price factor is considered the most accurate and recognizable element to distinguish these fevers.
In fake fever, the selling price of property might drop at any time as it’s just an illusion built by fake news. Meanwhile, in real fever, the cost that the buyer spends commensurate with the potential of the product and that value may increase over time.
Business Director of Kosy Group also noted that making money in real estate fever is not an easy task whether it is fake or real. If you want to risk investing in fake fever, you need to be very alert and keep your head cold.
It is essential for investors to evaluate the real market price and the potential rising value of the property before investing. For example, if the selling price of surrounding projects is VND15 million per sqm, then the acceptable price to buy products at the project may be at VND17 million per sqm. If the price is incredibly high, for instance, VND30 million per sqm, there should be a logical explanation such as the prestige of the investor, planning issues, construction density, development potential, future population size, etc. If not, then investors should give it a second thought.
