On our last trip to Hoi An in 2016, on our way through Danang along the coast, we saw huge unfinished buildings, some of which belonged to well-known luxury hotel chains. This time, it felt like the number had tripled. For some, only the shell is standing, for others the shell is finished, others are finished and remain empty. Even an entire completed mall is empty.
Fotos by „Tuoi Tre News“ and „VietNamNet“
On the way to Halong Bay, we also saw finished villa districts in Halong, where one house looks like another and they are all empty. I had asked our guide at that time, but he was very vague.
I did some research on the internet and wanted to understand what this is all about. I only found a few articles in English that didn't provide any clear information. However, two facts seem clear:
The problem existed before Corona, in 2015 there were already reports of orphaned construction projects. And it's not just happening in Danang, but all over Vietnam.
The problem seems to be complex. I feel like I've read everything existing and will try to summarize it.
At the beginning of this century, tourism in Vietnam began to flourish. To give this an additional boost, the Vietnamese government has passed two laws since 2015. It allows foreigners to buy real estate in Vietnam through agencies, even with just a tourist visa. However, the land is not included because it is communally owned by the Vietnamese population. When buying real estate, the associated land must be leased for at least 50 years.
On the other hand, the long coastal strip of Danang and Hoi An has been approved for construction development projects. The 30 km long beach between the Son Tra peninsula in Danang to the headland in Cua Dai, Hoi An is considered one of the most beautiful sandy beaches in Vietnam. In 2015, large areas of it, especially in Danang, were allocated for construction projects.
In euphoric anticipation of further growth and due to the low interest rates, many companies secured such land and invested in huge buildings for resorts and apartment hotels. As many Chinese and Korean tourists like to travel to the center of Vietnam, there was hope that they would buy such apartments and villas. In fact, many Chinese investors had participated until the real estate bubble in China burst and the Chinese withdrew their investments, especially from abroad.
As a result of this and COVID, wars and high interest rates, the real estate bubble in Vietnam also burst. Construction work that had begun had to be frozen due to a lack of fund. Other construction companies refused to continue building as they were unable to find buyers and tourist numbers were unstable. The number of tourists has not yet recovered to pre-COVID level. Despite the lack of buying interest, property prices remain high. Many young Vietnamese families would like to buy a small apartment, but cannot afford these properties. As a result, ghost towns have sprung up in some areas.
For me, Halong is a good example of the thoughtless approach. Most tourists who come here want to see Halong Bay and not the town of Halong. They mainly stay overnight on cruise ships. Vietnamese don't live here either. There are an incredible 10 square kilometers of built-up area now occupied by empty houses, stores and streets. Why?
The madness is even less understandable when Vietnam, like many other places in the world, has a shortage of affordable housing. Why are thousands of apartments being left empty and falling into disrepair when there are plenty of people looking for a place to live? Vietnam is run by one communist party dictatorship. So why can't the government decide to provide balance?
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