When the bubble inflated in 2007, My didn't see it coming.
Like many others, the Vietnamese car dealer quit his job to become a real estate investor, after seeing robust growth in a market that appeared to have an army of homebuyers willing to line up for villas and apartments from midnight — an image perpetuated by the local media at the time.
The infatuation had a short shelf life.
The market in Ho Chi Minh City crashed that same year, triggering a long phase of freezing that followed. Some refused to admit that the bubble had burst, or even rejected the idea of a bubble in the first place.
For My, the damage of the burst has always been real.
As home prices plunged and the costs of bank loans soared, he turned from a hopeful investor to a debt-ridden man.
He was developing an apartment project in District 8, which then had to be delayed for the following five years due to cash shortages. In 2013, failing to do anything to restart the project, he faced foreclosure.
But even though all of his company’s assets have been seized, creditors are still following him every day, hoping to recover more for their own losses. The banks themselves have been struggling to chase away the specter of bad debt since. After efforts by the central bank to clean up the financial system, non-perfoming loans, mostly linked to the real estate market, remained at 2.56 percent of loans as of the end of February.
Khai, another investor hit by the 2007 crisis, has counted himself among the lucky ones.
Betting on several properties in Binh Duong, he always hoped he could reap a 15-20 percent return as promised by his brokers. He even mortgaged his house in Ho Chi Minh City to secure the deals.
What came after that was a nightmare for him: land prices dropped, interest rates surged and buyers disappeared. He rushed to sell his properties despite huge losses. Then he borrowed from his relatives to pay the banks.
“Had I not acted quick enough, I would be a homeless man now,” Khai said, asking to be identified by his first name only.
Casualties kept piling up through to 2012, the year when the market was believed to have hit bottom. The government, however, still decided to tighten lending rules.
Data from the Ministry of Construction showed that in 2012, 17,000 property companies posted losses. More than 2,600 construction and real estate firms also shut down by the end of the year.
Watching the so-called land fever in Ho Chi Minh City unfold in recent months, a businesswoman couldn't stop thinking about the bubble a decade ago.
Speaking on condition of anonimity, she said she has been warning everyone around her about a possible bubble. Her advice: investors should stay out if they have to rely on bank loans.
She turned to leveraging when she entered the market in 2007. Bank loans accounted for half of her investment and, after three years, "I had nothing left but debts to pay," she said.
Land prices in suburbs skyrocketted in the first five months, increasing by 30 to 40 percent between January and May in many outlying districts.
The Ho Chi Minh City Real Estate Association has warned that the upward trend is not real and is driven by rumors and speculations.
It has asked the city authorities to make any urban development plans clear and transparent to prevent brokers and land speculators from creating such bubbles.
Figures from leading real estate advisers CBRE and Savills showed that the land market is cooling down.
Sales in the residential sector in the first quarter fell 13 percent from late last year with a 47 percent drop in the apartment sector, according to Savills.
Duong Thuy Dung, director of CBRE Vietnam, said in a statement issued last month that the market in the megacity has shown signs of a slowdown and the question is how long it will be able to maintain a safe distance from crashing.