Just a few days after the information about merging provinces and cities spread on social networking sites, including the merger of the three provinces of Phu Tho - Hoa Binh - Vinh Phuc, named Phu Tho, with the administrative center in Phu Tho, it created a real estate fever in some areas of Viet Tri city, in some places up to 50% compared to the beginning of 2025. Land prices increasing too quickly can easily lead to a real estate bubble in the short term. The risk of a bubble bursting is entirely possible if expectations about profitability do not come true.
Investors learn about the real estate market at the Tay Nam Viet Tri Urban Area Project.
The cause of this "land fever" is said to stem from rumors of provincial mergers, rumors that Phu Tho will be the headquarters of the new province, based on the consolidation of provincial administrative units. Several other localities have also recorded a "hot" increase in land prices in the past two weeks, all from rumors of mergers. One of the most obvious impacts of the merger is the shift of the administrative-political center, along with the possible movement of a part of the population. This has led to a "land fever".
From the investor's perspective, it is necessary to clearly recognize the hidden problems behind the "land fever" due to merger rumors. Firstly, when localities merge, they will receive infrastructure investment. Expectations about infrastructure are a reason for the increase in land prices. However, where, how, and for how long will the infrastructure be invested... are things that cannot be confirmed in the short term. Only real estate in areas with roads and bridges will have the momentum to break through. In fact, with a favorable traffic location and the orientation to develop into a regional center, Phu Tho is becoming a "promised land" for investors. In particular, Viet Tri City is currently the strategic administrative center of the region when it is chosen as the headquarters of the State Bank (region 4), the Tax Department (region 8), the State Treasury (region 8) and the Social Insurance (region 18). The advantage of the administrative center not only brings comfortable living space, ensures security and traffic connection but also opens up potential for real estate.
In fact, with its convenient traffic location and orientation to develop into a regional center, Viet Tri City is increasingly attracting investors.
Second, it is almost certain that the current “land fever” areas are mainly due to speculators “inflating prices”. In the past, speculators have repeatedly used tricks to build market confidence from virtual, unverified information. They also organized groups of people to spread rumors about hunting for large quantities of land. All of this is aimed at increasing the expectation of profit in a certain area, thereby finding opportunities to buy quickly and sell quickly to make a profit in the short term. Therefore, investors in this type of movement face risks, especially those who have bought land after buying and selling it several times (not to mention the legality of these plots of land).
Third, and most importantly, rumors are just rumors, meaning they may be true or false. If true, investors may enjoy some profits. On the contrary, can the plots of land that have been invested in be sold? It is difficult to say. Because when the rumors are not true, investors who "hold land" will fall into the situation of "dying on a pile of assets" as happened when the real estate market suddenly plummeted at the end of 2022.
Land in Ben Got Urban Area, Tho Son Ward, Viet Tri City has been bought and sold actively in the past 2 weeks.
Furthermore, the overheating of land prices can easily lead to a short-term real estate bubble. The risk of a bubble bursting is entirely possible if expectations of profitability do not come true. However, investing in real estate in Phu Tho or other provinces and cities is entirely possible, if there is careful calculation based on good information. For example, areas that have policies for industrial, urban, and tourism development... Real information will shape real profit value.
Therefore, before there is official information about the province merger, investors should direct their cash flow to projects and investment channels that are feasible and highly effective. Avoid following the crowd trend, investing in real estate by buying land, creating bubbles like today.
Tat Cuong
Source: https://baophutho.vn/nguy-co-vo-bong-bong-co-the-xay-ra-khi-dat-ky-vong-sinh-loi-vao-bat-dong-san-229785.htm
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