People race to buy land in Binh Duong, Dong Nai

Some large projects have been launched, warming up the real estate markets in Dong Nai and Binh Duong in the second, third and fourth quarters. Many clients from different places are not afraid of long distance from HCM City to buy two or three land plots because of cheap prices compared with HCM City.

On October 3, EcoLakes Ecological Urban Area with an area of 226 hectares invested by SetiaBecamex Co in My Phuoc district, Binh Duong province launched 3.5-hectare-model villa village. The villa prices ranged from 600 million dong to 2.7 billion dong. Although the villas were relatively high, the project still attracted much attention from clients.

Prior to the above project, Huong Phuoc and Hoang Gia urban area projects in Binh Duong had attracted hundreds of people, mainly from HCM City and southern provinces. The selling price of Hoang Gia was 275 million dong for 150 square meters and 350 million dong for 300 square metre villas. Hung Phuoc’s selling price was 1.45-1.75 million dong a square metre. This was the reason why clients raced to buy land in Binh Duong despites long distance from HCM City.

At the same time, Dong Nai is also racing to prepare infrastructure for a series of new projects, which are considered satellite urban areas in East HCM City.

The biggest strength of Dong Nai-based projects is waiting in front for infrastructure planning. Choosing strategic locations regarding traffic, trade, those projects have employed the milestone from the express way connecting from HCM City to Long Thanh, Dau Giay, Long Thanh international airport, Phuoc An Port, national highway 51 to develop.

Dong Nai general Agriculture Corporative Association kicked off construction of Long Hung-Long Thanh open economic ecological urban area with total investment of USD 1.269 billion. Currently, the company is building two bridge routes of An Hoa-Huong Lo 2 (6.4 km long and 60 m wide) and Long Hung – Phuoc Tan (5.4 km long and 60 m long).

Nhon Trach Joint Stock Co is also developing East Saigon Urban Area Project with total investment of USD 6 billion in Nhon Trach district. The 759-hectare project with expected expenses for infrastructure construction of some USD 220 million is now experiencing the first phase. According to the project’s investor, by the end of 2010, main traffic roads, green parks, water channels, and others will be completed and the first buildings will be offered for sales.

Additionally, a series of projects including Cu Lao Tan van (Bien Hoa), Phu Tin, An Phuoc (Long Thanh) and others are attracting many clients because of reasonable prices, 2.3 million dong a square metre or less.

Although being seen to have strong development and preparing massive sources to launch real estate projects in the upcoming time, dong Nai and Binh Duong remain risky markets, said experts.

One of the reasons for under evaluation of the two provinces is easy purchase but hard sales because real estate prices sharply reduced in 2008 and hardly returned to the prime time 2007. Furthermore, Dong Nai and Binh Duong are relatively far from HCM City. It often takes at least 45 minutes to one hour to travel from the two provinces to HCM City. Additionally, residential areas traded in the market are empty without any people. Hunting for cheap land, many people targeted to buy land and then sell it for profits.

Talking about the land reduction of over 60 percent in Binh Duong during 2008 at the opening ceremony of EcoLakes model villa village, general director of SetiaBecamex Khoo Teck Chong analysed that “during the crisis period, any location faces up decrease in value somehow more or less. However, if investors make long-term investment for 10-20 years, they would not be afraid of temporary risks for short terms of one to two years.”

Chong added that investing into construction of urban areas is uneasy. How to sell products and convince residents from other places to come here is a more difficult challenge. However he said that according to the general development rule, HCM City would expand and extend residents in the future, infrastructure would also be connected better. Thus, Binh Duong would be attractive enough to lure residents from other places to come those urban areas if the projects have a better environment and style.

Director of Tin Nghia real estate trading floor Nguyen Thi Thanh Huong admitted that in addition to shortage of information which makes investors fail to see potential of Dong Nai real estate market, this market face up bad liquidity and only a few of residents come to reside here.

Huong expected that in the near future, one to two years, when a series of infrastructure projects are developed, traffic becomes more convenient, extending residents to the south Saigon would be stronger. Dong Nai would no longer be a strange market.

General Secretary of HCM City Real Estate Association Do Thi Loan said that at present big projects in Dong Nai concentrate into the luxurious apartment segment while almost all residents here have low incomes; particularly most of them are workers in industrial zones. This is illogical.

The expert warned that if Dong Nai’s real estate market wants to develop, businesses should concentrate into the common apartment segment.