Experts fear satellite urban areas could turn to ghost towns

By Trung Tin   July 18, 2020 | 08:00 am GMT+7
Experts fear satellite urban areas could turn to ghost towns
An unoccupied satellite urban area in Binh Duong Province, southern Vietnam. Photo by VnExpress/Quynh Tran.

Property analysts worry that satellite urban areas near HCMC could end up as ghost towns, creating a nightmare for the market.

At a seminar on post Covid-19 real estate market trends on Thursday, they said the investment in satellite areas near Ho Chi Minh City that began in 2018 would continue to pour, with new projects emerging in provinces such as Dong Nai, Binh Duong and Long An.

Though a lot of inter-regional infrastructure is being developed, they feared that the new urban areas might have no occupants.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA), said the number of satellite areas around HCMC is increasing, including in Long An's Can Giuoc and Ben Luc rural districts, Dong Nai and Binh Duong provinces, and elsewhere.

A poll by HoREA centered around disputes and complaints related to these projects found only around 10 percent of respondents saying they plan to move in and live there, and the rest considering it an investment, which poses the risk of creating abandoned projects.

"If these projects are unoccupied and investors only sell them for profit, this will be disastrous for the market," Chau said. "The most important concern now is how to attract residents and this requires all the investors to have comprehensive and synchronized solutions."

In recent times some developers have begun limiting the maximum number of units a customer can buy to two to prevent them buying in bulk and selling when prices increase.

Nguyen Minh Hoa, vice chairman of the HCMC Urban Planning and Development Association, said the recent wave of investment in satellite urban areas was inevitable since large investors could no longer find large parcels of land in HCMC.

But people buying houses and land in surrounding provinces not only need houses but also infrastructure and amenities such as electricity, roads, schools, hospitals, shopping malls, markets, even places of worship, he said.

Developing urban areas in satellite regions, if not done carefully, will create ghost towns, he added.

Real estate giants are gobbling up huge areas of land in HCMC’s neighboring localities like Binh Duong and Long An for mega projects.

A recent survey by VnExpress found that these companies have pocketed hundreds and even thousands of hectares in satellite urban areas in several provinces as of mid-June.

From 2018 until June this year, an average enterprise in Saigon holds at least two to three projects in satellite urban areas, according to the latest report of Ho Chi Minh City-based real estate firm Ngoc Chau A.

 
 
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