Recently, following reports of a potential merger of several provinces, real estate investors and brokers in many areas have been aggressively inflating land prices, creating artificial surges that pose significant risks for genuine homebuyers and short-term speculators.
Land prices soaring
In Bac Giang Province, over the past two weeks, land prices in the southern part of Bac Giang City have surged dramatically. In some areas, prices have jumped by VND3-5 billion per lot within just a few days. Many investors from Hanoi and Bac Ninh have rushed in to buy, but most landowners are holding onto their properties, expecting prices to rise even further. Some transactions have fallen through as sellers back out, hoping to sell at higher prices.
Tran Van T. (45, Bac Giang City) has been looking for a plot in the southern urban area of Bac Giang City but has been unable to make a purchase due to the rapid price swings. "In the morning, a broker quoted VND6.5 billion for a plot, but by the afternoon, they said someone else had already offered VND7 billion," he said in frustration. Prices are rising so unrealistically that both buyers and sellers are struggling to close deals.
Rumors of a merger involving Phu Tho, Vinh Phuc, and Hoa Binh provinces have pushed land prices in Viet Tri City (Phu Tho Province) up by 20-50 percent within weeks. Previously abandoned urban areas have suddenly turned into hotspots, with prices climbing daily. For example, a 90-square-meter plot in Ben Got Urban Area (Viet Tri City) was priced at VND1.6 billion in October 2024 but has now risen to nearly VND2.4 billion. Nguyen Van Cuong, a longtime real estate broker in Viet Tri, said, "This area used to have only a few built houses, with the rest covered in overgrown grass. It had been on the market for years without buyers. Now, dozens of brokers and investors show up every day asking about it."
In Ninh Binh Province, speculation that Hoa Lu City could become the capital after a potential merger of Ninh Binh, Ha Nam, and Nam Dinh provinces has driven land prices up by VND300-500 million per lot in a short period. In Nam Dinh, land prices in some districts have surged three to four times over the past year, rising from VND900 million to VND2.8 billion for a nearly 500-square-meter lot.
In Binh Duong, recent social media rumors about a possible merger of several Southeastern provinces have fueled another wave of price hikes. On real estate listing websites, hundreds of postings advertise land, townhouses, and apartments at prices VND1-2 million per square meter higher than at the end of 2024. In Di An City, land in the Dong Binh Duong Urban Area is now priced at VND11-13 million per square meter, while listings along Thong Nhat Street (Di An City) have surged to VND66.5-70 million per square meter.
According to the developer of the Binh Minh Residential Project in Ben Cat City, the company is revising its pricing to account for rising investment costs, with new prices expected to be about VND1 million per square meter higher than before.
Risk of falling into the “high-price trap”
Real estate experts warn that the sudden spike in land prices due to speculation over provincial mergers is unfounded and carries significant risks. Mr. Vu Cuong Quyet, CEO of Dat Xanh Mien Bac Real Estate & Services JSC, emphasized that expecting land prices to rise solely because an area becomes an administrative center is a misconception. He pointed to Ha Tay Province, which merged with Hanoi in 2008—yet it took 10-15 years for land prices to stabilize as infrastructure gradually developed.
According to Dr. Nguyen Tri Hieu, inexperienced investors are especially vulnerable to getting caught in speculative waves. Artificially inflated prices may surge in the short term, but once the hype fades, liquidity drops sharply, leaving buyers stuck with overpriced assets that are difficult to sell and have low profit potential. In reality, provincial mergers are primarily administrative changes aimed at streamlining government operations, not immediate triggers for large-scale infrastructure development or economic growth.
Another major risk is excessive financial leverage. Many investors take out bank loans to speculate on rising prices without considering the risks of floating interest rates after promotional periods. If the market does not grow as expected, they may struggle with repayments and face financial distress. Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam National Real Estate Association, urged investors to rely on official information rather than brokers, rumors, or market hype. Sustainable land price increases only occur in well-planned areas with strong profit potential, economic growth, and high local incomes.
Economists note that the current speculative land rush in many areas reflects how Vietnam’s real estate market remains highly influenced by rumors and "FOMO" (fear of missing out). Without careful evaluation, investors risk holding onto a "burning coal" when the property bubble bursts.
In Can Gio District (Ho Chi Minh City), land prices have started to escalate over the past month. Nguyen Van Hung, a longtime land investor in the area, said, “I own a 300-square-meter plot on 30 Thang 4 (April 30) Street in Long Hoa Commune, which I bought years ago. By the end of 2024, the asking price was around VND35 million per square meter, but in the past two months, someone has already offered VND55 million per square meter.”
In some nearby areas, land prices have also increased by about 30 percent compared to late 2024. However, this surge is not driven by speculation over a provincial merger but by major upcoming projects, including the Can Gio Sea Reclamation Urban Area, the Can Gio International Transshipment Port, and the Can Gio Bridge, which will connect the district to Nha Be.
