Land prices in Vientiane have increased many times over in recent years due to the inflow of foreign investment and developing urbanisation.
Officials involved in the sector told Vientiane Times yesterday that land in the city centre now sells for US$2,500 to US$3,000 per square metre, especially in areas close to the Morning Market.
They attributed the soaring price to growing demand by businesses for land in the city centre, where the necessary facilities are readily available and the population density is highest.
Vientiane authorities have formulated a master plan that would oversee urban development up until the year 2030. The plan envisages creating several sub-centres to encourage businesses to move out of the city centre.
But the shortage of facilities in the suburbs means business operators are only interested in a location in the city centre, where they can earn the most money.
As the authorities expand the city, the price of land in the suburbs is soaring as many people and businesses seek to make a quick profit by buying land and selling it on.
In the Done Noun area about 15km outside the city centre, land that had only dirt road access was selling for 256,000 kip per square metre last year, but this price has now almost doubled.
In locations about 20km outside the city centre that have potential road access, land sold for about 40 million kip per 1,600 square metres a few years ago. But when word leaked out that development projects were planned for the area, the price of land jumped to more than 200 million kip per 1,600 square metres.
Along 450 Year Road, land is expected to sell for a minimum of US$80 per square metre, but the actual price is likely to be higher as people will have to submit a bid to buy a plot.
Office Head of the central bank Mr O Vilaphan said authorities are now allocating land along the six-lane 450 Year Road linking the Dongdok area to the Lao-Thai Friendship Bridge in Dongphousy village, Hadxaifong district, over a distance of 20.3km.
He said zoning of this area is expected to be completed this year, when people will be allowed to buy land alongside the road.
Some people are eager to buy land which they then sell at a profit, and say that buying a plot of land earns them more money than the interest rate offered on a bank account.
Buyers find out where a development project is planned, including the location of paved roads, before buying land in that area. In places that are close to newly paved roads, the price of land is significantly higher.
Meanwhile, the government is drafting a decree to better manage the situation. Farmers are now selling their land to buy a car or pick-up truck, build a house or invest in some other enterprise. Business operators are all too eager to buy the land so they can sell it and make a profit.