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Dong Nai property market poses high risk

Cao Ban
Friday,  Sep 15,2017,22:09 (GMT+7)
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Dong Nai property market poses high risk

Cao Ban

HCMC – Dong Nai Province's real estate market holds potentially high risks despite the rapid growth being helped by improved traffic connectivity with HCMC, heard a seminar on the provincial property market on September 14.

Among HCMC’s neighboring provinces, Dong Nai has the better advantage as it is home to many important traffic intersections, with many axis routes cutting through it such as National Highway 1A, North-South Railway, HCMC – Long Thanh – Dau Giay, Ben Luc – Long Thanh and Dau Giay – Phan Thiet expressways, Phuoc Khanh Bridge connecting Can Gio to Nhon Trach, and Ben Thanh – Suoi Tien Metro Line which will link to Bien Hoa City.

Especially, Long Thanh International Airport project has made Dong Nai’s real estate market more attractive to HCMC investors as people tend to move to neighboring areas of HCMC.

At the seminar “Dong Nai real estate market: opportunities and risks” held by Dau Tu newspaper, it was announced that the province is home to nearly 300 property projects of domestic and foreign enterprises including those with investments of billions of U.S. dollars.

According to statistics of the market researcher Savills, Dong Nai as of 2016 had 55 housing projects supplying 30,200 apartments and land lots. However, the secondary market accounted for up to 90% with 27,600 products while the primary market provided only 2,600 products.

In general, investors focus on the land segment with long-term investment targets of five to seven years. Land prices remain low with VND4-4.5 million per square meter in Long Thanh and Nhon Trach districts and VND3.5 milion in Trang Bom and Giang Dien districts.

The market has shown signs of uncontrolled development as many local people have divided their farm land into lots to sell. Many areas of farmland of 3,000-4,000 square meters each had already been divided into smaller ones many years ago, said Nguyen Minh Khang, acting general director of LDG Group.

Due to this rampant development, numerous projects in the province without technical and social infrastructure facilities remain unsold. 

Nguyen Thanh Lam, deputy director of Dong Nai Department of Construction cum chairman of the Dong Nai Real Estate Association, said the provincial housing market becomes active thanks to infrastructure development projects, especially Long Thanh International Airport project.

Industrial park and urban area development projects measuring up to 21,000 hectares around the airport have been suspended pending adjustment of zoning plans. The province has also halted the certification of farmland being split into small lots.

Lam categorized real estate projects in Dong Nai into three groups. The first group comprises of land resources in urban areas in Bien Hoa City, Long Thanh, Trang Bom and Long Khanh districts, which have been almost exhausted.

In the second group, projects with an area of 200-300 hectares each are located in localities with poor infrastructure, mainly land plots. These projects are only suitable for investors with medium-term investment targets from five to seven years.

The third group includes projects in areas without essential infrastructure facilities, and are only suitable for investors with over-10-year investment targets, he said.

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