Apartment prices cool down, experts predict land prices will soon 'rise'

According to the Q1/2024 Report of Property Guru Vietnam, the land market has begun to "thaw". The level of interest in land in the last two quarters of 2023 only reached 44% of the demand in the hot period of 2021, but by the first quarter of 2024 it had increased to 48%. In the North, the demand for land increased sharply in some suburban districts. In the South, the level of interest in land has stopped decreasing.

Previously, the report of the Ministry of Construction also showed that land transactions had positive growth in the second half of last year. Specifically, in the fourth quarter of 2023, the whole country had about 27,590 successful land transactions, accumulated in the last 6 months of 2023, the number of land transactions increased by 28.4% compared to the first half of the year.

The real estate market report for the first quarter of 2024 by the Vietnam Association of Realtors (VARS) also said that many areas recorded a sudden increase in land transactions, especially plots of land that have been divided. More investors are hunting for land in suburban areas of large cities, localities with strong infrastructure development and high urbanization rates.

The price of successful land transactions decreased by 20-30% compared to the peak but has stabilized and there are no signs of price reduction. Compared to the fourth quarter of 2023, the price has increased by about 5%, especially the market on the outskirts of Hanoi and associated with industrial parks recorded an increase of 10-20%.

Land is expected to attract investors. (Illustration photo).

According to Mr. Dinh Minh Tuan - Director of Property Guru Vietnam, the number of investors with money available to buy land is increasing. When demand increases more clearly, prices will increase. Many land brokerage units have also confirmed that land prices have been adjusted since March this year.

Explaining the above statement, Mr. Dinh Minh Tuan said that the early recovery of the land market was driven by two factors: the wave of anticipating changes in the three new Laws that will take effect from 2025 and the "saturation" of other investment channels.

More specifically, the Law on Real Estate Business (amended) and the Law on Housing (amended) will affect the land market quite a lot from 2024 onwards. Tightening regulations on land subdivision are a hot spot, it is forecasted that the supply of subdivided land will decrease sharply after 2025, but the demand for land is unlikely to decrease in the long term because Vietnamese people still favor this type. When supply is low and demand is high, land prices will increase. Many investors want to grasp this trend and will start hunting for land before the new law is applied.

In addition, the real estate market currently does not have many products to invest in. The apartment segment is "stuck" with new projects due to unfinished legal procedures, private houses and townhouses are not diverse, and the selling price is high. Meanwhile, land is an easy-to-buy product, easy to transfer, has a certificate and keeps the asset stable, safe, has good profitability and most importantly, the current land price is still very "soft" compared to 2-3 years ago.

Land is a type of investment that any member of the market can invest in due to the diversity of area, price, and region. In localities with rapid economic growth, the land in this place will still grow sustainably thanks to the trend of population dispersion and the large infrastructure systems that are gradually forming.

However, Mr. Dinh Minh Tuan also emphasized that not all land products can increase in price and be accepted by the market.

" Only land products with clear legal advantages, good locations, close to infrastructure or industrial zones, and commercial value will be sought after by buyers and may increase in price in the future. However, the price increase of land will hardly be as strong as the peak period and it is unlikely that there will be a "shocking" price increase like what happened a few years ago ," Mr. Tuan commented.

Sharing the same view, Mr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS) said that investors are starting their journey of "hunting" for land in suburban areas of big cities, localities with strong infrastructure development and high urbanization rates with prices considered quite "bargain", with much room for growth in the future.

Besides, the demand for buying land as an asset is still favored by investors and continues to be the top choice segment.

" Land is always popular with investors thanks to many factors, typically the preference for houses attached to land and the need to accumulate safe assets as well as the ability to increase profits from land is still high ," said Mr. Dinh.

Chau Anh

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