Land prices in Da Nang have dropped significantly after peaking in a ‘land fever’ at the beginning of this year, resulting in heavy losses and debts for many investors.
Prices of land plots in the central city, especially at the Hoa Xuan ecological urban area in Cam Le District, the Nam Hoa Xuan area in Ngu Hanh Son District, and the Golden Hills urban area in Lien Chieu and Hoa Vang Districts, have been plummeting due to the impact of the novel coronavirus disease (COVID-19) pandemic.
“Many land owners have lowered their prices by 30-40 percent, but are still unable to close any deal,” said Nguyen Van Huyen, an investor at the Golden Hills urban area.
At Hoa Xuan and Nam Hoa Xuan, many transaction offices for land traders have been shuttered while the cost of each land plot has dropped by about VND1 billion (US$43,100) compared to last year.
Land prices have also decreased sharply along such streets as Nguyen Tat Thanh, Tan Tra, and Son Thuy.
D.V.H., director of a real estate firm in Da Nang, said that his company was still able to secure several land sale deals following the wave of COVID-19 infections in Vietnam in March and April.
However, no clients have contacted the firm since a new wave broke out in late July, H. continued, adding that he has had to cut the salary of new employees and collaborators by 50-100 percent due to financial difficulties.
Da Nang was the country’s largest epicenter during the new wave, linked to most of the 551 local cases reported nationwide since July 25. The virus is now kept at bay in Vietnam and the coastal city, as the country has recorded zero additional domestic infections for nearly two weeks.
The present situation is more serious as it follows a ‘land fever’ that occurred in the resort city in early 2020, during which prices of local land plots were jacked up to be much higher than their real value, according to Nguyen Van Lan, director of Da Nang-based Minh Lan Real Estate Company.
During the land fever, many speculators purchased a lot of land plots and expected to resell them at an even higher price in the future.
These speculators now have no choice but to slash their prices to avoid further losses and debts, Lan elaborated.
Despite the price drop, demand for land in Da Nang is still very low due to the pandemic.
To support realty businesses, local banks need to provide support policies such as freezing or rescheduling loans that are related to real estate, said Vo Van Cuong, chairman of the Da Nang Real Estate Association.