People rush to invest in real estate, ignoring risks

In the first months of 2017, the number of real estate transactions at the Notary Public Office No 1 in HCMC increased by 17-27 percent compared with the same period last year.

The figure was released by a representative of a notary office at a workshop held several days ago in HCMC. This showed the number of transactions at only one public notary office, but could reflect the current ‘land fever’ in HCMC.

In January 2017, the number of transactions notarized increased by 17.71 percent in comparison with January 2016.

Increases of 17.45 percent and 27.37 percent were reported for March and April. The increase was small in February, when people stopped transactions to prepare for the Lunar New Year.

The representative from the Notary Public Office No 1 revealed that there were many transactions of agricultural land.

“We received the dossier for a transaction of 1,000 square meters of agricultural land, in which the buyers were more than 10 households,” he said.

“We issued warnings about the risks the buyers may face, but they ignored the warning,” he said. “The current land fever attack raises big worries for the people who watched the real estate market 10 years ago."

An analyst commented that the statistics of other notary public offices, especially ones in the suburbs, might even be higher, because ‘land fever’ was hot in the areas.

He said the number of transactions has soared because the real estate market has warmed up. Those who have idle money at this moment would buy land plots to resell for profit, rather than injecting money into gold and dollars.

Many experts have warned about the ‘real estate bubble’ as the prices are escalating day after day.

According to the HCMC Real Estate Association (HoREA), the land price in HCMC has increased by 1.5-2 times within 15 days. Many people buy land not for accommodations, but just to resell for profit.

“The land fever attacks originated from the suburbs, including districts 9, 2 and Cu Chi,” said Le Hoang Chau, chair of HoREA.

Nguyen Huy Vu, CEO of BanViet Land, also expressed his concern about the real estate bubble.

“Once the bubble bursts, people will lose money, while the national economy will suffer,” he warned. “After that, the market will enter a slight recession or crisis period."

Mai Chi / vietnamnet