Rich Hanoians inject money into Da Nang’s land

VietNamNet Bridge – The land price in Da Nang has bounced back after a long period of decline because investors from Hanoi have been flocking there to hunt for prime land areas

Real estate developers, while reporting that the land price has been escalating every day, noted that the massive investments would create “real estate bubbles” once again in the city.

“The land market has heated up again as investors from Hanoi have come back and injected money into prime land areas. Even the land plots further from the city’s center are also being hunted,” an analyst commented.

“More than 50 percent of the buyers in the deals made recently are from Hanoi,” he noted, adding that investors now tend to pour money into the real estate sector again as bank deposit interest rates have dropped.

Da Nang was once the ‘magnet’ that attracted investors from Hanoi and HCM City in 2009-2011.

The presence of major investors in the city in the central region then pushed the land price up to the sky high level. Some real estate projects have increased by two or three times in price.

Later, when Hanoi investors left the market, the Da Nang market was shaken, while speculators suffered heavily. Some speculators reportedly committed suicide because of big losses. The market faded away.

A report by CBRE Vietnam, a real estate service provider, in 2011 showed that 80 percent of the buyers of apartments and villas in Da Nang during that period were from Hanoi.

Later, when the Hanoi and HCM City real estate markets plunged, investors rushed to sell real estate projects to take back investment capital, Da Nang then became involved in misfortune. The real estate price then dropped dramatically by 30-50 percent.

Bad consequences

The same scenario is likely to happen in Da Nang in 2015.

Tran Ngoc Thanh, general director of Dat Xanh Mien Trung Real Estate Company, said of the 500 land plots traded this year at the company, 50 percent of the deals were made with investors from Hanoi.

“The number of investors from Hanoi has been increasing rapidly in recent years,” Thanh noted.

Nguyen Xuan Hiep from Cuong Hung Thinh Group also noted that Hanoians have not only targeted land plots, but they also are seeking to buy apartments and villas.

“Hanoians are our biggest customers,” said an executive from The Point project, which has put 20 villas on sale in the second phase of the project.

He estimated that 70 percent of buyers are from Hanoi, each of them buying more than one product.

Source: http://english.vietnamnet.vn/