Vietnamese investors snap up land in earmarked 'special economic zones'

By Staff reporters   April 13, 2018 | 02:27 pm GMT+7
Vietnamese investors snap up land in earmarked 'special economic zones'
An expanse of shoreline in Phu Quoc, where Vietnam is planning a special economic zone. Photo by AFP
Tax breaks and rising real estate prices have got investors champing at the bit.

Land prices have shot up on Vietnam’s largest island Phu Quoc following news that the government is planning to turn it into a Special Economic Zone (SEZ).

The current land prices on the island are now about 10 times higher than before Vietnam’s traditional new year, which fell in February, local investors said. A square meter of land on the island can now fetch from VND20-60 million ($875 to $2,625), the Vietnam Real Estate Agency (VREA) said.

Shophouses are considered hot properties on Phu Quoc, with prices ranging from VND25-50 million per square meter, up around 5-7 percent from recent months, the VNREA said.

The property market is buzzing on Phu Quoc, with thousands of billboards advertising plots strewn across the island, and authorities have reported an unprecedented number of transactions each day.

“This land rush is getting out of hand for local authorities,” said Dinh Khoa Toan, chairman of Phu Quoc District.

Property fever has also hit two other areas earmarked to become SEZs: Van Don in northern Quang Ninh province, Bac Van Phong in central Khanh Hoa province, and Phu Quoc in southern Kien Giang province.

Investors are pouring money into these areas because, with SEZ status, they will enjoy tax and land use breaks if the proposal is approved in October by the country's legislative National Assembly, opening the door to local and foreign investors.  

Speculators are also banking on the proposal going through to cash in on inflated prices.

As a result, the Ministry of Construction has instructed local authorities in the three areas to take control to prevent a potential real estate bubble.

Local authorities have also been urged to tighten control of transactions, identify the causes of market volatility and handle cases of land legislation violations.

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