Land fever hits Vietnamese cities
HO CHI MINH CITY - Although 160 million dong (US$10,700) is a hefty
price to
pay for 200 square meters of agricultural land on the outskirts of Ho
Chi
Minh City, Nguyen Thi Mai did not see sinking all of her savings into
the
deal as a gamble. Mai figured she could gain at least 100 million dong
in
clear profits once she resold it - which she planned to do as soon as
the
local government redesignated the area as an urban one. However, a new
directive scheduled to be issued this month by the local government has
left
Mai an unhappy speculator.
The new directive not only means she will not be able to see any profit
from
her investment any time soon, she may also be forced to return the land
back
to its former owner if she fails to use it in the next few months.
Le Thanh Hai, chair of Ho Chi Minh City's People Committee, said that
the
directive, which will impose stricter land management, will "rein in the
culture of chaos that is developing in the city's property market".
Indeed,
it has already gained the nod of Deputy Prime Minister Nguyen Tan Dung,
who
has even urged that other localities adopt similar measures.
Among the upcoming directive's expected stipulations is one that would
force
speculators to return the land they have bought if it is still unused
six
months after the issuance of a land use certificate. Hai said that he
will
also suspend all farmland transactions in outlying districts so as to
"spare
agricultural land for cultivators". This means farmers may well be the
only
ones allowed to buy agricultural land, which they can use only for
production. In the works as well are measures aimed at stopping the
illegal
alterations of land use certificates and the illegal transfer of land
use
rights.
All these have been prompted by a bad case of real estate speculation
fever
Ho Chi Minh City has been suffering since late last year, when the
central
government announced its plans to develop new urban centers around Ho
Chi
Minh City and Hanoi. Land prices have since been soaring in the
outskirts of
these two cities as speculators snapped up plots that once were devoted
to
growing crops. And while there have been some small-time speculators
like
Mai, there have also been major real estate dealers who bought as much
farmland as they could outside these cities, and then retailed the plots
at
prices 10-50 times their former value.
Local officials say that the land price explosion has had negative
impacts
on the social and economic development of the two cities' fringe areas.
For
one, many speculators have left thousands of square meters of good
agricultural land unused as they wait for prices to rise. For another,
many
landowners have temporarily suspended their development plans, just in
case
an opportunity would arise that would enable them to make more profit.
Hundreds of farmers have even quit working their land, channelling their
energies instead in trying to sell their plots at a huge mark-up.
Officials at rural Binh Chanh district - still considered part of Ho Chi
Minh City - say that as a result, some 350 hectares of land have been
left
uncultivated. They also say that they will have to alter their rice
production plan for this year.
Local officials say that the farmers who have already sold their land
have
spent the money on trivial things, such as motorbikes, beer or karaoke.
No
wonder that Mai, reminded that she may have to resell her land back to
its
former farmer-owner, exclaims: "How on earth could they find money to
buy my
land even if it is sold at half of the price!" Bui Huu Hoang, deputy
head of
Binh Chanh District's economic office, likewise said: "The land fever
has
rapidly increased numerous social evils."
Meanwhile, people who want to buy land either to build their house on or
to
expand production have been held back by the high prices. Nguyen Hoang,
a
worker who has saved money to buy a small lot, for instance, recounts:
"I
have made a down payment of five million dong for the land, but now the
land
prices are rising sharply, the land owner refused to sell and gave me my
money back."
Indications are, though, that the planned directive is already driving
land
prices down. Land speculators are now rushing to sell their plots ahead
of
the crackdown. One prominent example is the Phu My Hung Land and Housing
Trading Firm, which is now offering property at 20 percent lower than
the
original asking price.
Farmlot prices are also falling. At the Tan Kien Commune in Binh Chanh
District, a 100-square meter plot that was going at 80 gold taels
(US$26,700) just over a week ago now has a price tag of less than 60
taels.
But Ho Chi Minh City officials are not stopping at just issuing the new
farmland directive. The city government said that it will also begin
working
on measures to curb illegal construction that it said that is damaging
its
land and housing plans. Vu Hung Viet, deputy chair of the city's People
Committee, said that Ho Chi Minh City will no longer allot land to
individuals or corporations wanting to build just a single house on it.
Instead, the city will allot land to real estate companies that have
sound
infrastructure and housing development projects.
By Tran Dinh Thanh Lam - Inter Press Service - April 13, 2002
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