Developers race to buy lands post-pandemic

Hung Thinh Group recently acquired 1,000 hectares in the Central Highlands province of Lam Dong, home to travel hotspot Da Lat.

An Gia Group said at its annual general meeting in June that this is a "golden" time to expand its land holdings. It plans to spend VND3-5 trillion ($130-216 million) this year to buy in Ho Chi Minh City and nearby Dong Nai, Long An, Ba Ria – Vung Tau, and Binh Duong provinces.

Nam Long Group plans to spend VND2 trillion ($86.5 million) this year to buy in provinces and cities near HCMC.

Phan Xuan Can, chairman of real estate consultancy SohoVietnam, said several factors were behind developers expanding their reach to cities and provinces surrounding Hanoi and HCMC over the last couple of years.

For one, improved road network has reduced commute time from these localities to downtown city areas. Another reason is that the rising number of industrial parks established in these localities has drawn more residents and pushed house prices up.

Moreover, land prices in the surrounding localities are lower than in the big cities and there is abundant supply of the same, he added.

With many other deals being negotiated, industry insiders said developers are taking the opportunity thrown up by firms facing financial difficulties due to the pandemic and being forced to sell.

Nguyen Thanh Huong, CEO of Dai Phuc Land, said that the pandemic is one of the reasons why there has been many land deals in the first six months. Many are scrambling to buy quickly since they fear they might lose the chance to get prime lands at good prices, she added.

Prices have been surging in recent years since the government has been increasing official prices on which compensation is based, she said.

But she explained that only companies with deep pockets could join the race since they do not know when they could begin development and see profits.

After acquiring lands, they need to go through a challenging and time-consuming process of acquiring licenses, she said.