Investors with deep pockets have flocked to a coastal area in the south-central province of Phu Yen, offering to buy seaside land at unreasonably high prices, sparking concerns of a possible land fever that may well lead to a real estate bubble.

The buyers, reportedly hailing from Hanoi and other northern provinces, are willing to pay three to five times the market price to purchase a piece of land in the coastal town of Hoa Hiep Trung in Dong Hoa District.

“Different groups of buyers have visited every house located near the beach, with the latecomers offering higher prices than the early birds,” a local named Binh recalled.

Binh said local residents at first thought the buyers were joking when they made the offers with unbelievable prices.

“But after seeing some of them actually made successful purchases and paid by cash, ‘to sell or not to sell' [our land] soon became the talk of the town,” he added.

Vo Thi Mi, a Hoa Hiep Trung resident, said one buyer has recently offered to buy her 266-square-meter piece of land for VND1.3 billion (US$56,875), or nearly VND5.1 million ($223) per square meter, almost three times the government rate of only VND1.8 million ($78) per square meter.

The lucrative offer has in fact given Mi more worries than joy.

“I have been in two minds since they made such a suggestion,” she said.

“I really want to sell the land to have money to afford treatment for my illness and share the fortune with my children, but on the other hand, I am concerned if this is nothing but a fraud.”

Mi said she has yet to accept any offer to buy her land as she heard that “Chinese people are behind this land-buying spree.”

A coastal land plot in Phu Yen, south-central Vietnam. Photo: Tuoi Tre

Tourism development?

In early May, a group of people, introducing themselves as coming from Hanoi and Nam Dinh Province, rented a house to open an ‘office’ in Phu Tho Quarter in Hoa Hiep Trung.

A sign was then put up at the 'office,' reading “Information about coastal land and houses in Phu Yen,” with the contact information of the group’s leader, Vu Ha.

Tuoi Tre (Youth) newspaper reached Ha on Monday, and was told that the investors only want to buy local land plots for tourism development.

The coastal area has emerged as an attractive destination thanks to the many tourism attractions of Phu Yen, and its close proximity to Van Phong, one of Vietnam’s three planned special administrative and economic zones, located in the neighboring province of Khanh Hoa, Ha explained.

Ha said she wanted to buy five to ten pieces of land to develop a ‘homestay village,’ adding to the list of tourism products of Phu Yen.

However, Ha underlined that she had only managed to buy one land plot before prices began to surge.

“Local residents were the first to ask higher for their land, and real estate brokers also joined in, causing prices to skyrocket,” she said.

“Why would we want to increase land prices?”

A coastal land plot in Phu Yen, south-central Vietnam. Photo: Tuoi Tre

Price manipulation

Tran Dinh Quy, member of the Vietnam National Real Estate Association, said a group of “professional brokers” is behind the land price surge in Phu Yen.

These brokers have formulated a sophisticated plan to create false demand for land in the area, he elaborated.

“They are manipulating land prices by sending ‘false’ buyers to the market, duping residents into thinking that their land is valuable and prices will continue to soar.

“Other investors may jump in the race to buy land, and these brokers will make the final move – selling the properties at whopping prices and disappearing.

“The bubble will then burst and the final investors to buy the land will get the biggest blow.”

Nguyen Chi Hieu, deputy chairman of the Phu Yen administration, said local police and relevant agencies have been tasked with looking into the issue.