The Ha Noi property market is once again seeing a wave of increased land prices in suburban areas, thanks to rumours of some districts being developed under the model of "city within a city".

The first land price rise in those districts, including Dong Anh, Soc Son and Me Linh, happened in March after information came out about the Red River urban planning project.

The project is still in the planning phase and is expected to be approved at the end of this year. However, land prices are now increasing again in those districts because of a rumour on further developing these areas.

A piece of land near Dong Do Lake in Soc Son District is currently valued at VND12 million per sq.m, much higher than that the VND5 million evaluation last year, according to the local people.

Land prices in Minh Phu Commune of Soc Son District have increased by 30 per cent year on year. Land prices in Minh Tri Commune have surged to VND10-12 million per sq.m, up from VND7-8 million at the beginning of this year.

However, according to the local people, most of the land offered for sale in those villages is in protected forest areas. If buyers are not careful they will buy forest land and will not be able to build, the Vietnam News Agency reported.

The property market in Me Linh District has been frozen for a few years because of the development of 50 urban projects, invested by private capital. However, the project, over a total area of 1,905 hectares, has been suspended due to a lack of capital.

Based on the rumour of converting Me Linh District into a city, real estate brokerage centres have returned to Me Linh, pushing the price of land up by 30 to 40 per cent.

"Every time there is new information relating to the Red River urban plan, the land prices in those districts increase. Investors are interested in regional planning; if there is investment potential, they will visit the land areas and quickly make investment decisions", said Nguyen Nam, a real estate broker in Me Linh.

Meanwhile, Dong Anh District has always had a busy real estate market thanks to its location near inner-city districts. The district has promoted infrastructure development for many years. Thanks to the rumour of developing a 'city within the city', investors are paying more attention to land investment in Dong Anh, causing land prices in some communes like Vinh Ngoc, Hai Boi and Xuan Canh to see an increase of 15-20 per cent and even 40 per cent.

A representative of the Me Linh District Land Fund Development Centre said that the land prices in Dong Anh, Soc Son, Me Linh and Hoa Lac are increasing, but there have not been many successful transactions.

In the future, Me Linh District will enhance site clearances and build infrastructure to continue auctioning land plots in the district. The district will also publicise planning information and progress on infrastructure development projects, to prevent further rumours on land price and land speculation.

Regarding the rise in prices of land in those districts, the chairman of the Viet Nam Real Estate Brokers Association, Nguyen Van Dinh, said that due to low property supply in the inner districts, investors tend to find investment chances in suburban districts like Soc Son, Dong Anh and Me Linh. Together with the rumours relating to the Red River urban planning, the land prices on those markets have been pushed up to a very high level.

However, few investors need long-term investments so land prices usually only increase for a while before falling back to their usual levels, according to Dinh.

Ha Noi plans to develop five suburban districts of Hoai Duc, Dong Anh, Thanh Tri, Gia Lam and Dan Phuong to become inner-city districts by 2025. With a large land fund, these districts will be key residential development regions in the future, according to Dinh.

In 2021, four districts, Hoai Duc, Dong Anh, Thanh Tri and Gia Lam, account for 30 per cent of apartment supply. This figure is expected to increase to 36 per cent by 2023.

"When the land fund in the inner city becomes limited, investors also tend to expand to the suburban areas. In addition, improved infrastructure also contributes to promoting the tendency of people moving away from the city centre,” said Do Thu Hang, Senior Director, Advisory Services, Savills Hanoi.

“When the future supply is in remote areas, it will bring more options in terms of location and price.”

Experts also note that investors who want to buy real estate at present need to determine whether this is a long-term investment, especially in the areas of Dong Anh, Me Linh and Soc Son or suburban districts. Those areas are all waiting for planning and large projects to be implemented, while the transport infrastructure connecting to the inner city is still developing. Therefore, these investments will not be profitable quickly.

Before deciding to invest, buyers need to find out about planning projects and land prices. This will help them avoid buying land plots without legality and abandoned projects, according to the leader of Dong Anh District. — VNS