Land prices "follow" the Northern high-speed railway

After information about the planning of Ngoc Hoi station, the main station of the North-South high-speed railway, land prices in this area have skyrocketed. With a budget of 3-4 billion VND, investors will find it difficult to buy a plot of land with a car parked at the door.

After information about the planning of Ngoc Hoi station, the main station of the North-South high-speed railway, land prices in this area have skyrocketed. With a budget of 3-4 billion VND, investors will find it difficult to buy a plot of land with a car parked at the door.

Ngoc Hoi station planning has caused land prices in this area to skyrocket. In the photo: Overall perspective of Ngoc Hoi Complex.

Over 100 million VND/m2

Since 2004, the Prime Minister has approved the investment policy for the Urban Railway Line No. 1 project, Ngoc Hoi - Yen Vien section. However, after about 2 decades, this area is still "inactive" and the site clearance process is still at a standstill. The gloomy atmosphere here was only truly dispelled when the Ministry of Transport identified Ngoc Hoi station as a part of the North - South high-speed railway system.

The above information has made the real estate market in Thanh Tri district (Hanoi) flourish, especially in Ngoc Hoi commune, where the station is located. According to local people, this area witnessed a sharp increase in prices at the beginning of the year due to the land fever in the suburbs of Hanoi in general. Then, with new information about the North-South high-speed railway, the price of residential land around the station construction site continued to be pushed up to a new level.

If at the end of the first quarter of 2024, buyers could still find plots of land with car parking at the door for about 60 million VND/m2, now the price has increased to nearly 80 million VND/m2. For plots located on main roads, the price is even over 110 million VND/m2.

For national key projects, the construction progress may take many years. Therefore, if investors have to borrow money, they will face the risk of cutting losses.

“In the area around Ngoc Hoi station, with a financial capacity of 3-4 billion VND, it is very difficult for investors to buy plots of land with cars parked at the door. If there are, they are usually small plots or have bad feng shui,” said Mr. Xuan Thanh, a broker.

The amount of residential real estate available on the market is relatively limited. For plots of land with good locations and wide alleys, the liquidity rate is calculated weekly. In the hands of experienced “surfers”, plots of land here can bring in profits of several hundred million VND after a short time.

“Ngoc Hoi commune and neighboring communes such as Dai Ang, Lien Ninh, Nhi Khe, Khanh Ha are the most interested areas in Thanh Tri district. In particular, Dai Ang and Lien Ninh communes will be the most developed areas in the near future, when there are two more urban areas in 2028 and 2029,” said Mr. Thanh.

According to CBRE, properties close to metro stations will have an average price premium of 10-20% compared to other areas. In case of a real estate market crisis, housing projects with good connections to metro lines will be able to recover faster.

Be careful when buying land "stuck" in planning

Speaking to reporters from Dau Tu Newspaper, Mr. Nguyen Huu Cuong, Chairman of the Hanoi Real Estate Club (HNREA), said that it is natural for real estate prices to increase along with the development of transport infrastructure. This trend has happened in the case of Ring Road 4, when investors raced to “scour” for land around the route to anticipate the planning.

“It is normal for land prices to increase in response to official planning information from government agencies, especially in the case of the North-South high-speed railway system. This is a key project, so not only real estate investors, but everyone is excited about the information surrounding this great project,” said Mr. Cuong.

However, the Chairman of HNREA also emphasized that buyers need to clearly define the planning scope of the project to avoid being subject to land clearance. This will be one of the factors that determine the “profit or loss” of the land plot. In addition, investors must also find out whether the land will benefit from the technical infrastructure system or social welfare projects of the State.

“This can be determined through detailed planning, regional planning, 1/2,000 planning, 1/500 planning... If the investor is sure that the land plot is not 'affected' by planning, then it is considered a partial victory. If not, the potential risks are very high. There have even been cases where the seller faked planning landmarks to commit fraud,” Mr. Cuong warned.

In addition to planning factors, the expert from HNREA also noted that investors need to determine their financial health, the purpose of using the land and their own "guts". According to Mr. Cuong, the land lots "following" the project will be suitable for medium and long-term investors and not too dependent on financial leverage.

“Buyers must balance their ability to pay and not be influenced by emotions. With key national projects, construction progress may take many years. Therefore, if investors have to borrow money and are not confident in short-term 'surfing', they will face the risk of cutting losses,” Mr. Cuong warned.

Similarly, Mr. Ngo Xuan Chuc, an investor and director of a real estate brokerage in Hanoi, stated that the market initially always reacted positively to planning information, and real estate prices also increased "dizzily". After that price increase, market sentiment would stabilize again and cause the price level to gradually level off, or even decrease in some places with unusually high prices.

“Ngoc Hoi Station is the largest railway station in the North, and the planning scope may be adjusted and expanded. If investors are unlucky enough to buy a plot of land within the planning, they will be considered to have lost money. Even when applying the new land price list, the compensation level will never be equal to the market price. Considering the current land price frame, the compensation level is less than 1/3 of the actual price,” Mr. Chuc frankly said.

According to this investor, the scale of the project is very large, so the site clearance work cannot be done overnight. Therefore, the project implementation time may be longer than expected. Therefore, investors with small capital and having to borrow money from the bank should think carefully, avoid being haunted by the feeling of FOMO (fear of missing out) and putting money down based on rumors.

Source: https://baodautu.vn/batdongsan/gia-dat-an-theo-duong-sat-cao-toc-bac---nam-d229040.html