Real estate prices are soaring in Laos’s capital, Vientiane, residents say, as the city develops at a rapid pace.
Land prices in Vientiane, the country’s economic center, have risen to over U.S. $2,500 per square meter in some areas, up to two hundred times the price in areas in the outskirts of the city.
Residents said prices in prime business areas of the capital were around U.S. $2,500 to $3,000 per square meter in January, but now they have climbed even higher.
The price per square meter is about the same as annual income of the average city resident, which city officials in April said was $2,750, according to the Vientiane Times newspaper.
By comparison, in residential areas of Vientiane, one square meter goes for between $500 and $700, and in rural areas nearby, between $15 and $50, sources said.
One city official said the prices are expected to keep rising.
“Due to economic growth, it is certain that the prices of land will not stop rising,” a land management official in Vientiane told RFA.
The swift increase in the value of real estate comes amid a new city development plan that officials outlined last year.
According to the plan, several new sub-centers will be created to expand the town and reduce traffic congestion in the city center, the Vientiane Times reported.
The plan will also help accommodate the city’s expanding population, currently at about 700,000 and expected to double by 2030, the paper said.
The city is on track to see economic growth of 12 percent this year—compared to 7.8 percent in the rest of the country—driven mostly by industrial development projects, Laos’s Planning and Investment Department said in April, according to the Vientiane Times.
Anticipating higher values, investors are scrambling to buy land for resale in areas where the government has planned to build new road and satellite cities, residents said.
But some people are being left behind in the real estate boom as they are pushed out of their homes to make room for development projects.
Since all land in Laos is owned by the state, some are left with little choice when the government chooses to use their land for a development project.
One resident of Vientiane prefecture’s Sikhottabong district, not far from the capital center, said that when she was told she had to move for a development project, the compensation she received from the state was inadequate.
“The appraisal committee estimate of the price of my land was too low,” she said.
“My land, I think it should have cost between U.S. $100 and $200 per square meter, [since] it is along the road, but they give me only 300 Thai baht [U.S. $10] per square meter,” she said.
Her compensation was also slow in coming, she said.
“I did not receive the compensation yet… They said they will look for new piece of land for me somewhere else to exchange mine, but so far I have not received yet,” she said.
Reported by Krongkran Koyanakkul and Waroonsiri Sungsuwan for RFA’s Lao service. Translated by Somnet Inthapannha. Written in English by Rachel Vandenbrink.