‘Land fever’ spreads to Con Dao

Friday, May 11, 2018 08:46

A view of Đầm Trầu beach, one of the most beautiful beaches on Côn Đảo Island. —Photo vietnamtourism.gov.vn

Land prices have surged on Con Dao Island, a popular tourist destination in Ba Ria - Vung Tau Province, due to massive land speculation.

Speculators from HCM City and Ha Noi are now looking for land for tourism services on the island, local media have reported.

A resident on the island who declined to be named said land prices have surged since late last year, creating a new wave of land fever in yet another area of the country.

“Many people from HCM City and Ha Noi are pouring money in tourism services on the island, pushing up prices every day,” he said.

“Land prices on mountain roads, mostly agricultural land, have increased six or seven times from VND1-2 million per square metre, depending on location,” he added.

A resident paid around VND1 billion (US$43,910) for more than 2,000 square metres of land, of which 300 square metres was residential land, located on the edge of a mountain 2km from the island district’s centre.

Last year, an investor in HCM City agreed to pay VND3 billion to buy the plot, but he hesitated and decided not to sell.

“Recently someone agreed to pay VND8 billion to buy the plot, but I did not agree. According to the market price of land on the island, it should be sold at VND10 billion or more,” he said.

On the main roads such as Tran Phu, Pham Van Dong and Nguyen Hue, land prices have soared to VND50-70 million per square metre, with no signs of stopping.

A resident said he sold 100 square metres of land on Pham Van Dong Street for more than VND3 billion to a French-Vietnamese couple who wanted to invest in tourism services.

Nine months later, someone is willing to pay over VND6 billion for the plot, but the land owner did not agree to sell.

“Land in prime locations is very expensive since supply does not meet demand. A 200-square metre land on Tran Phu Street was sold for VND16 billion a few days ago,” he said.

According to Con Dao Land Registration Office, nearly 100 land transfer transactions have been recorded in the first three months, a sharp increase compared to before.

Nguyen Anh Nhut, vice chairman of Con Dao Island District People’s Committee, said that better connections by air and boat between the mainland and the island had resulted in an increasing number of tourists.

“On average, some 2,000 visitors come to the island per day,” he said.

Seeing the potential, many investors have rushed to buy land to build restaurants, hotels and resorts, but the land fund is limited. That has led to the present land rush and rising prices, he said.

“The highest selling price recorded was VND40 million per square metre, but in reality the price was much higher,” he added.

Con Dao Island District People’s Committee has already suspended issuance of licenses to build new restaurants and hotels on the island, according to Nhut.

“The district authorities will strictly manage the planning and land regulations to prevent illegal transfer and construction. But we cannot prohibit people from selling land or stop investors from developing legal construction projects,” Nhut told local media.

Lack of long-term tourism planning is the main cause for the massive development of the sector, a phenomenon that has occurred in many other areas in the country, experts have warned.

In a related issue, the authorities on Phu Quoc Island in Kien Giang Province and Van Don Island in Quang Ninh Province as well as the Van Phong Bay area in Khanh Hoa Province have been struggling to control surging land prices on the islands.

These areas are slated to become special administrative economic zones if approved by the National Assembly in October.

The special designation would allow them to receive preferential incentives. As such, land speculators have been flocking to the three provinces, driving property prices up.

Con Dao Island, a former penal colony, consists of 15 islands and islets. It has become one of the country’s most popular attractions because of natural beauty.

The island is 45 minutes by flight from HCM City. Tourists can also visit the island by boat from Vung Tau City, which takes about 12 hours. — VNS

Comments (1)

I am global real estate expert and was employed to visit Con Dao Island in June 2018 to conduct a land assessment for a major property investor and have advised strongly against the island. Land prices in Con Dao Island are massively over priced. Speculators have been talking up prices but in reality this has resulted in setting false expectations and a stagnation in the property market on the Island and little or no quality developments coming through. Coupled to this much of the land is subject or earmarked for Government projects which brings great uncertainty around future usage and ownership rights. I visited a number of properties for sale on the island which were earmarked for demolition in the short term due to being in a Government project zones being marketed at 5 times the compensation rates. There are some developments taking place in the center of town but the cost of building on the Island is prohibitive at 3 to 4 times that of the mainland due to having to ship all building materials to the Island. There is wild talk of tourist numbers increasing with new ferry routes to the Island but in reality the numbers remain muted, and with massive over capacity already existing with the hotels on the Island there is little scope to invest in hotels/ tourist accommodation. Many land owner who are looking to sell at the current inflated prices are in reality struggling to find buyers and a correction is expected in the short to medium turn.

Paul - Thursday, 28/06/2018, 16:55 Reply | Like