VietNamNet Bridge – Every square meter of land in the areas is priced at billions of dong, which is equal to the price of an apartment in new urban areas.

The Vietnamese real estate market has fallen into the biggest ever crisis. Real estate developers all report increasingly high inventories and dim transactions, while secondary investors bargain apartments away, thus leading to the dramatic price falls of 30-50 percent in apartment prices.

However, surprisingly, the land prices of the “golden land areas” have been staying firmly at sky high levels. They seem to be uninfluenced by the current economic downturn and the frozen property market.

An expert has noted that the land prices in the areas are in no way inferior to that in the biggest cities in the world. The land price frame released by the Hanoi authorities, taking valid as of January 1, 2013, showed that a square meter of land on the ancient streets of Hang Ngang, Hang Dao and Ly Thai To in Hoan Kiem district is priced at up to VND81 million.

Meanwhile, in HCM City, the land in District 1 proves to be the most expensive. The land plots on three main streets of Le Loi, Dong Khoi and Nguyen Hue are priced at VND81 million per square meter; the same as Hanoi’s.

However, the prices posted in the land price frames released by local authorities are just for reference for people, or would be applied when investors calculate the sums of money to compensate for people when taking their land for project development.

In Hanoi, the land in ancient streets is always the most expensive with the prices always at sky high levels, because the areas not only have historical and cultural value, but also commercial values thanks to the advantageous positions.

With just several square meters of retail premises on Hang Dao or Hang Ngang streets, merchants can earn tens of millions of dong a year from trading. Meanwhile, many landlords can lease the retail premises for thousands of dollars a month.

Therefore, the front-street houses on Hang Ngang, Hang Dao always have the market price of no less than VND800 million per square meter, even though the houses are small and old because they were built a long time ago.

Meanwhile, the land on Hang Bo and Hang Buom Street is a bit cheaper--about VND600-700 million per square meter.

The streets in the Hoan Kiem lake area are also as expensive as gold. In late 2010, the investor of a shopping mall – office building complex project had to pay VND900 million per square meter to pay to the households at No. 22-24 Hang Bai and 25-27 Hai Ba Trung street for site clearance.

Even with the sky high compensation level, it was very difficult to persuade the residents relocate to give place to the project, because some people demanded the compensation level of VND1 billion per square meter.

Prior to that, the compensation level of VND500 million was described as “incredibly high” in Vietnam.

Similarly, in HCM City, the local authorities post the land price at VND81 million per square meter, but the actual market price in the golden land areas may be up to several billions of dong.

One can read an ad piece on a website that a house with the area of 100 square meters is now on sale at the price of VND95 billion , or VND950 million per square meter. The seller said he is now renting the house for US$10,000 a month, or VND200 million.

US$1= VND21,000

Tien Phong