‘Land fever’ made some millionaires while others have lost their fortunes

VietNamNet Bridge – The recent ‘land price fever’ in Hanoi brought billions dong to some speculators and landlords, but it also made many other people lose their fortunes.

The Hoc, a media executive of a big group, thinks that he is a lucky man. A friend of Hoc’s, who is now a real estate broker, advised him to get rich by trading land. Listening to the friend’s advise, Hoc invested all the money he saved in recent years, and money he borrowed from relatives, in land.

Having one billion dong in hand, Hoc decided to buy 53 square metres of land in Gia Lam area at 25 million dong per square metre. One month later, the land price here soared to 34 million dong per square metre, and Hoc decided to sell the 53 square metre land plot.

“I could earn nearly 500 million dong just within two months. Meanwhile, my job as a media executive just allowed me to save 4-5 million dong a month,” Hoc said.

After that, Hoc used the big sum of money he earned to purchase a land plot in Thanh Oai district at one million dong per square metre. Just two weeks later he saw the land price skyrocket to three million dong per square metre. Encouraged by his early luck, Hoc purchased and then sold a number of land plots. The deals has made Hoc become a billionaire: he has pocketed nearly three billion dong from land trade from ‘surfing’ investments.

Dac Lan in Thanh Oai district related that the land price fever not only helped speculators, but farmers as well, become rich. A lot of farmers in his hamlet sold their land when the price was at its peak, earning hundreds of million dong. The land price fever helped many households change their lifestyles, because they now can purchase LCD TVs to watch football matches and scooters for transportation.

Nevertheless, the land price fever did not bring good fortune to everyone. Since the ‘fever attack’ lasted only two months, many people did not profit from their trade deals.

Lan Anh, an officer of a big bank in Hanoi, related that she tried to invest in real estate to follow other officers in her bank. However, unlike her friends, Anh has not seen large profits from the land trade deal like she expected.

Anh related that she bought two 100 square metre land plots in Me Linh district at 10 million dong per square metre. In order to have money to purchase the land, Anh’s parents sold nearly 70 square metre of their land in village in Phu Ly town and Anh had to borrow money from a bank.

The problem was that Anh did not know when she should sell the land plots she purchased. Anh did not sell the land when the price reached its highest peak, because she hoped that the price would go up further. However, contrary to Anh’s prediction, the land price did not go up, but in fact went down.

“I am incurring a loss of 500 million dong,” said Anh.

The unexpected falling prices of the land in the west of the city has made many people lose their fortune. This has deal a strong blow not only to amateur land traders, but to professional traders as well.

Hung, a real estate broker and an investor, said that he purchased 1000 square metres in Ba Vi district at a very low price of 1.8 million dong per square metre, before the market witnessed the land price fever. He also spent 8 billion dong to purchase four land plots in a project invested by Geleximco. However, the problem was that Hung did not sell the land plots when the land price was high. Now the only thing he can do now is to waiting for the next surge in Hanoi land prices.

According to Pham Trung Ha, General Director of Hoa Phat Land, when the land price increased, many people felt that it was so easy to earn money with land trade deals and they rushed to hunt for land, which pushed the land price up further. Besides, the rumour that the new national administration centre would be located in Ba Vi district also made people think that they would get huge profits if they purchased the land in the area.

“However, amateur investors do not have much information and they do not have much experience about the fluctuations of the market, therefore, they faced higher risks than professional investors,” Ha said.