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Phú Quốc struggles to control land speculation

Update: April, 13/2018 - 09:00
Dozens of hectares of agricultural land have been divided illegally for sale in Cửa Dương Town on Phú Quốc Island. — Photo dantri.com.vn
Viet Nam News

Bồ Xuân Hiệp

PHÚ QUỐC What comes to mind when you think of Phú Quốc Island? Pristine beaches, historic sites, Buddhist shrines, or fishing villages?

These are the dominant images among visitors and tourists, but today you cannot enter a café or shop on the island without hearing heated conversations about the price of land. 

Early next year, the island is slated to become a special administrative economic unit, which has sparked a firestorm of interest among real estate brokers, mostly from Hà Nội and HCM City.

Investors are flocking to the island looking for land, pushing prices up in anticipation of the new administrative designation, which would offer preferential incentives for development.

Phú Quốc, known as the Pearl Island of Kiên Giang Province, was once a sleepy area of around 100,000 people. In recent years, however, the 567sq.m island has become a tourist mecca for thousands of visitors from around the world.

The inevitable problems that come with such rapid growth have not escaped the area. Land disputes, fraud, pollution and social disorder are only a few of the issues that local authorities now face.

Because of the massive profits from land speculation, nearly every resident on the island, including motorbike drivers and vendors, wants to take part in the risky but lucrative game.

One broker, who declined to be named, said land prices at prime locations on Trần Hưng Đạo Street had reached “crazy” heights of more than VNĐ100 billion (US$4.38 million) per công (1,000sq.m), while land costs in Cửa Dương Commune had soared to VNĐ1.5 billion-VNĐ5 billion per công.

Beachfront property can cost over VNĐ25 billion ($1.1 million) per công, but land owners are waiting to sell because the price is expected to rise, according to the broker.   

Land that has been divided into lots has also seen price rising, from VNĐ250 million ($10,967) per lot last year to VNĐ1 billion now.

A “land for sale” sign on Phú Quốc Island, where prices have soared in recent months. — VNA/VNS Photo Lê Huy Hải

Hồ Thanh Tú of Cửa Dương Commune, who once worked as a driver transporting buyers looking for land, now earns hefty commissions as a land broker.

“I intended to buy a car for my driving service, but instead I invested in property because I can earn a lot from land speculation,” he said.

Many people on the island have become wealthy from selling their land. Even so, some of them have regretted selling at “low” prices to buyers, mostly land brokers or speculators.

Some land lots have seen ownership transferred dozens of times in a short period, pushing up prices far beyond the real value, according to experts.

For example, a land lot sold in the morning can be sold to another buyer at almost double the price later the same day.

Nguyễn Văn Thiệu, 50, a land broker from HCM City’s Gò Vấp District, said that land prices on the island had risen to astonishing heights.

“When I visited the island a few years ago, I advised my friends to buy lots of 100-200sq.m for VNĐ500-700 million each. But they didn’t, so now they regret  because the price has gone up to several billion per lot,” he told Việt Nam News.

In recent years, many Việt kiều (overseas Vietnamese) have also been buying a great deal of property in Việt Nam, including on Phú Quốc Island.

A “disputed land” sign on Phú Quốc Island. — VNA/VNS Photo Lê Huy Hải

Land disputes

Land fever on the island has led to many cases of fraud and disputes related to transactions, according to local authorities.

Kiên Giang Province’s police, for example, recently detained Phạm Thị Thảo Trang, 39, of Hàm Ninh Commune for “appropriation of property charges”. She was charged with selling the same land lots to two different people.

She first sold two land lots covering a total of 5,500sq.m on Trần Hưng Đạo Street in Dương Đông Town to a resident on Phú Quốc for VNĐ50 billion. She said the sale had been notarised. 

A month later, she sold the land lots to another person for VNĐ63 billion. She received a deposit of VNĐ10 billion and pledged she would complete transfer procedures at the notary office within 30 days, but she never did, according to police.

At a recent meeting of the Phú Quốc District’s People’s Committee in Cửa Dương Commune on April 4, committee chairman Đinh Khoa Toàn said the district had recently received around 253 complaints related to land disputes.

“Land disputes are occurring wherever there is a real estate project,” he said. “The number of cases is increasing as land fever continues unabated.”

Due to the number of land sales, the notary offices on Phú Quốc are always overloaded with work. Every day, hundreds of transactions are recorded at Notary Public No 1 Office on April 30th Street and at Notary Public No 2 Office on Nguyễn Trung Trực Street.

Another serious issue involves fraud committed by members of organised crime groups, according to Phú Quốc District Police, who have resolved 13 land disputes involving such groups.

At least 138 members involved in organised crime have been questioned by police investigators. Of the number, 23 people had criminal records, and 66 were residents of other towns or provinces in Việt Nam.

Besides these violations, dozens of illegal land and mineral exploitation cases have been discovered in recent months.

Phạm Vũ Hồng, chairman of Kiên Giang Province’s People’s Committee, said that more and more people, especially workers from other cities and provinces, were coming to Phú Quốc every day.

“The People’s Committee is now paying a great deal of attention to organised crime on Phú Quốc,” he said.

Forested land on Phú Quốc Island is cut down illegally for sale as land plots. — VNA/VNS Photo Lê Huy Hải

Environmental protection

Besides rampant land speculation, the authorities are dealing with massive amounts of waste because of rapid development. On average, Phú Quốc Island discharges more than 150 tonnes of waste per day.

The island has only two landfill sites, one of which has been closed for months, while the other is now overloaded and cannot receive more waste, according to Huỳnh Văn Minh, head of the Public Works Management Board of Phú Quốc District.

“The waste treatment plant in Hàm Ninh Commune’s Bãi Bổn Village has also been closed for maintenance and upgrading,” he said.

Phạm Văn Nghiệp, vice chairman of Phú Quốc District’s People’s Committee, said the waste treatment factory in Bãi Bổn would be closed until June. 

Hồng, the chairman of Kiên Giang Province’s People’s Committee, said the committee over the past 10 years had not been able to attract investment in wastewater treatment projects.

In the face of such development, Phú Quốc authorities have urged people to carefully consider their decision to buy land.

“Buyers should think carefully before making land purchases and should not chase after prices. Many of these areas are included in overall planning, and these might not be granted permits to build hotels or restaurants,” they said.

In an effort to stabilise prices, the district plans to introduce strict measures to manage land transactions, prevent speculation, and handle illegal land appropriation.

Deputy Prime Minister Trương Hòa Bình has asked the Government Inspectorate to improve inspection of management and use of agricultural land on Phú Quốc.

Many land-use violations have occurred, including the transfer, leveling, and division of farmland, as well as the building of houses and infrastructure on agricultural land. 

The Deputy PM has asked the Kiên Giang Province’s People’s Committee to resolve the violations on Phú Quốc and report the results to the Prime Minister before July.

Since 2010, there have been three periods of land fever on Phú Quốc. This year, land prices rose by three to four times compared to mid-2016.

Located 46km from the mainland, the island can be reached by air from HCM City within 50 minutes and from Hà Nội within two hours. — VNS

 

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