Property Prices In Vientiane Continue To Soar
Property prices in the capital Vientiane saw a remarkable increase in 2012 as land purchasers grew more confident about the economic growth prospects of the country, thus willing to speculate on future increases.
Price of houses and land in Vientiane saw an increase of between10 to 15 percent in 2012, thanks to growing investor confidence.
“There are a number of mega land development projects underway in Vientiane and this is making people feel more confident that the price of the land will continue to increase,” Mr Houmphan from Rentbuy told Vientiane Times yesterday.
The government has given the green light for Chinese firms to develop the That Luang wetlands, Nongchan pond and the Donchan riverfront green field sites into new urban centres, while a Vietnamese firm has received permission to develop Nongtha wetlands into an accommodation and recreation precinct as well.
Planned infrastructure development projects such as the construction of a high speed railway from China to Laos, the accession of Laos to the World Trade Organisation and the establishment of the Asean Economic Community is also generating confidence in the investment potential of houses and land in Laos.
The Lao government also has a policy to allow foreign investors who invest more than US$500,000 to own 800 square metres of residential and office land in their own right, aiming to entice more overseas investors to come and set up business in Laos, which will further boost the market.
He said the price of prime locations in Vientiane such as land along the Mekong river bank in the Vat Chan area was now about US$3,000 per square metre, increasing from around US$2,000 last year.
“The price of land in the Vat Chan area has seen a remarkable increase since the development of the river embankment and the public park took place,” Mr Houmphan said.
People who had information on road and infrastructure development could use it to their advantage to make profits from trading in houses and land, he explained, pointing out that the price of land along newly built roads and renovated roads saw a more than 50 percent increase in short periods of time.
“Once the road is built, prices of land see a big surge,” Mr Houmphan said. However, despite the recent increase of property prices in Laos, the p rices of houses and land in Laos are, on the whole, still much cheaper than neighbouring countries including Thailand.
Observers said that the expansion of infrastructure in Vientiane is very slow, meaning there is an insufficient supply of developed land to meet the rising demand for accommodation and office space, due to rapid population growth.
Development of roads and public infrastructure in Vientiane is also not predictable, one of the main causes which makes the price of the land along newly built roads increase rapidly.
Only a few people have access to the city infrastructure development plan, but once roads are built many people are keen to buy.
In developed countries, the government plays an important role to lay down a coherent city plan and attract investment to ensure a sufficient supply of accommodation, one of the main ways to ensure property prices are affordable.
published with the permission of Vientiane Times