The real estate market in Vietnam has had an astonishing comeback in late 2021 – 2022. Even though the concern related to COVID forms a somewhat worrisome feeling for many investors, the big names in the market still hold their strong belief that the market will keep moving forward in 2022.
The impressive comeback of the market
One remarkable highlight of the Vietnam real estate market was the steady incentives of demand in houses and grounds. More surprisingly, the growth was truly outstanding in the last quarter of 2021.
The first quarter of 2021 was certainly an ease as there was a “Land Fever” that took place in some areas such as Quoc Oai, Ba Vi, Hoa Binh, Bac Ninh, Hung Yen, Thanh Hoa, Bac Giang, Bien Hoa, Thu Duc, Nhon Trach, Long Thanh, …
The second and the third quarter were gradually slowing down because of the alarming increase of COVID cases. Most of the real estate activities had to be canceled. This also led to a decrease in land prices. Ho Chi Minh was heavily damaged by the 4th wave, as opposed to the slow recovery of Hanoi during the time.
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In this interview, we are talking about :
- What’s the specificity of lands in Vietnam;
- What’s the general setup foreigners use if they want to acquire lands in Vietnam;
- 3 examples to illustrate the value and potential of lands in Vietnam;
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The “Land Fever” phenomenon
Everything began to reopen slowly in the 4th wave. Another land fever appeared making the real estate market as hot as a Backstreet Boys live concert.
Such events happened in areas like Bac Giang, Hanoi, Quang Tri, Ha Tinh, and one of the biggest showdowns of the year: The Thu Thiem auction. The auction at Thu Thiem attracted 21 giants of many industries, namely International Transportation and Trading Joint Stock Company; Gia Dinh House Business and Investment LLC; Ngoc Lam Trading – Tourist LLC; Dong Tien Real Estate Investment Joint Stock Company; Phat Dat Real Estate Development Corp; Cat Tuong Real Estate Group Joint Stock Company; Northern Thu Thiem Investment LLC; Ngoi Sao Viet Real Estate Investment LLC (belongs to Tan Hoang Minh); …
Highest auction of the Vietnam history
4 plots were successfully auctioned, with a total of 37.346 Billion VND – 7 times higher than the initial price. Viet Star won the biggest plot of the 4, which is 10.059 m2. The initial bid was only 2.942 Billion VND, but Viet Star took a huge step and bid 8,3 times higher, making the final bid worth 24.500 Billion VND.
Unfortunately, Ngoi Sao Viet decided to take a step back after the win. According to the Ministry of Finance, winning the bid with such a huge amount of money will leave behind a big fuss for not only the real estate market in Vietnam but also the economy of the country. “The most important criteria is to embrace the mutual benefit of the community and take it beyond your good” – said the Head of the Ministry of Finance. After considering such advice, Ngoi Sao Viet (known to be owned by Tan Hoang Minh) solely terminated the auction contract related to the buying activity at this plot and will face all the sanctions mentioned in the contract that was mutually agreed by the Land Fund Development Center and the Auction Center of Ho Chi Minh City.
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Another bidder known as “Binh Minh Trading Business and Investment LLC” also decided to give up the plot. The news came on the 8th of February and was reported by Mr. Le Duy Minh – The Director General of Tax Department. For now, there has not been any further information related to their motivation behind the termination. (Fun fact included: Even though bidding over 5.000 billion VND for the plot, this company’s charter capital is only somewhere around 100 – 200 billion VND. Moreover, the company has been established for only 3 months in Hanoi). For now, the Tax department is still working with this company to solve all the related matters.