Le Van Binh, Deputy Director of the MAE’s Land Management Department, shared hus view with VietNamNet amid news about administrative boundary mergers of provinces and cities.

Binh said that merging provinces and altering boundaries will impact the real estate market. Citing Ha Tay’s merger with Hanoi some years ago, he noted that merging a province with the capital city clearly swayed public sentiment and lured investors.

Yet, the Deputy Director said mergers don’t always mean higher property prices, but also lower prices in some areas.

Previously, people thought that people’s committees at different levels must be located in the central area. The land prices in these areas were always higher than in other areas because of better infrastructure. 

Currently, many rumors exist about the merging of 3 to 5 communes. Due to assumptions about mergers, land prices are pushed up in places where headquarters are expected to be located, but the prices will decrease in places that are no longer the center. Similarly, prices in the provinces that are no longer the center when merged may also decrease.

“The real estate market is psychological. Real estate investors become more excited when there is more information about planning and new urban development in merged areas. They will take advantage of rumors about the policy of merging provinces and cities that are in the 'gestation' period to inflate land prices for profit,” he said.

“But this fever is short-lived. Today’s investors aren’t easily swayed by rumors,” Binh added.

Asked whether mergers affect ongoing real estate projects’ legal processes or land use fees, Binh said current land price lists are stable and zoned by local areas, so valuations stick to those bases. Changes in land prices must stick to changes in urban area planning.

“Boundary shifts and urban scale changes surely affect real estate. But whether the changes are positive depends on specifics. Property prices hinge on many factors, including planning, investment attraction, and execution. Without urban planning and business investment, price impacts stay minimal.”

Localities warn of artificial price hikes

The prices of land for sale in many places such as Hung Yen City, Van Giang District (Hung Yen), Viet Tri City, Ninh Binh City, Bac Giang City, and the border area of ​​Quang Nam – Da Nang have reportedly increased by 5-15 percent compared to the end of last year. 

Many landowners even have increased prices by more than 20 percent amid the "wave" of mergers.

In response, many localities have warned of “fake land fever”.

Recently, Quang Nam’s People’s Committee ordered provincial police to investigate organizations and individuals showing signs of fraud, manipulation, or market destabilization.

In Thai Binh, the police urged investors to stay calm, avoid trusting merger rumors, and report fraud or market rigging to the nearest authorities.

Ninh Binh authorities have requested the police to inspect real estate deals, especially in Hoa Lu City, to verify abnormal price surges.

Similarly, authorities in Phu Tho, Ninh Binh, Tuyen Quang, Bac Giang and more have issued caution against falling into price-inflation “traps.”

After officials stepped in with warnings, real estate markets in many provinces quickly cooled down and are emptying of investors.

In Viet Tri, G. Hoang, a local broker, said that after years of stagnation, land prices in communes and wards at Phu Tho province’s administrative center and Viet Tri City’s gateways near Vinh Phuc province have surged since early March.

Notably, surveys show this “land fever” strikes long-vacant plots with sparse construction. Meanwhile, adjacent housing projects hold steady prices, with no considerable fluctuations.

As crowds swarm to buy land in Viet Tri City, driving prices skyward, reports from local real estate exchanges to the provincial Construction Department reveal trading floors remain nearly “frozen,” with no transactions logged.

Tran Quang Tuan, Director of Phu Tho’s Construction Department, suggested this “land fever” might stem from individual-to-individual deals.

On real estate forums, brokers have frequently spread merger rumors to inflate prices in these areas.

Nguyen Anh Thai, Deputy Secretary of Tho Son ward’s Party Committee, said no property transfer procedures have occurred in the ward, including the Ben Got urban area, since March 1.

Decree 96, elaborating on some articles of the 2023 Real Estate Business Law taking effect on August 1, states that the state will intervene in the market when transaction price indexes rise or fall over 20 percent in three months.

The Ministry of Construction is assigned to assess market fluctuations using price indexes, transaction volumes, and socioeconomic indicators tied to real estate.

Hong Khanh