Nguyen Anh Minh, general director of the Hanoi-based Housing and Urban Development Financial Investment Corporation, said that it was a clear sign that the country's real estate market is recovering. But other warned against speculation that could have an adverse effect.
On reason given is that they want to use gains made on the stock market to create property portfolios. Marc Townsend, general manager of real estate services firm CB Richard Ellis, and Economist Dinh The Hien both said that many investors had earned a lot of money so far this year. 'With the stock market soaring investors could start converting their gains into property,' said Townsend.
The Hien said that while property prices were rising, land was still relatively cheap. 'While houses are expensive and not so lucrative anymore, land lots at residential projects are still good investments,' Hien said.
An example is one investor who bought two land lots at the Phu Xuan residential project in Nha Be District early this year at VND7.5 million (US$420) per square meter who has just sold the lots at VND9.5 million and VND10 million per square meter, pocketing around VND500 million ($28,000) in less than half a year.
Tran Thu Hong, a sales executive at Van Phat Hung Joint Stock Company, said increasing demand has boosted prices sharply over the past two weeks.
'Two weeks ago some lots at the project could still be bought at VND28 million per square meter, but now prices have topped VND30 million,' he explained.
Land prices have also increased at other residential projects around the city. Lots at Phu Loi 1 project in District 8 are now offered at VND11-13 million per square meter, an increase of up to VND4 million from two months ago. Meanwhile, land prices at the Thai Son project in Nha Be District have surged about 13% over the past two months.
But Le Hoang Chau, vice chairman of the Ho Chi Minh City Real Estate Association, warned that the price increases are not purely demand-driven and issued a warning. 'Property speculators have forced prices to surge more than they should. Buyers should do their homework before making any purchases,' he added.
