The Housing Law, the Real Estate Business Law and the revised Land Law have all been passed and officially come into effect from January 1, 2025. Many investors are wondering whether this is the right time to invest in anticipation?
The "golden" time to invest?
Sharing with VietNamNet reporter, Mr. Le Dinh Chung, General Director of SGO Homes Real Estate Investment and Development JSC, assessed that for individual investors, this time, when interest rates have dropped sharply, gold prices are still high; while the real estate market has shown signs of recovery... this is the "golden" time for investors to research "putting money" in markets further away from Hanoi or in big cities.
“By 2025, when all three laws of Real Estate Business, Housing Law and Land Law come into effect; the real estate market will turn a new page; prices of existing real estate products will increase. Investing at this time, investors have the right to choose products with suitable prices and legal completion,” said Mr. Chung.
Also sharing with VietNamNet, Mr. Nguyen Anh Que, Chairman of G6 Group, said that the Land Law, Housing Law and Real Estate Business Law mark the end of the previous cycle and the beginning of a new cycle.
This can be called the “bottom” and is gradually entering a new period. Once the “bottom” of the real estate market has been determined, investors with available money should buy.
However, according to Mr. Que, the market will be divided into 3 types of investors.
“For investors with 100% money, this is the right time to buy real estate. However, for investors who are “bare-handed” or using too much financial leverage, this is not the right time to invest because liquidity is still low, at least for the next year.
As for professional real estate investors, using moderate leverage, about 30 - 50% and still having a plan to sell in a short period of 3 - 6 months, still ensuring a capital gain of about 10 - 30%, they have entered the market since the beginning of 2023. Therefore, it is difficult to say whether this is the right time to invest or not, but it also depends on the financial issues, experience of each investor and each segment", Mr. Que analyzed.
Which real estate segment to invest in?
SGO Homes General Director Le Dinh Chung said that this year, the high-rise and low-rise segments in big cities are still very attractive to investors. However, with apartments like in Hanoi, prices have increased by 15-20%, although there is still room for investment, the investment value is large. The minimum level is 3 billion VND for apartments or 6 billion VND or more for low-rise, so this will not be a common segment for everyone.
“In 2024, the land segment, which has the lowest price, will start to increase again, attracting more investors due to its suitable value, guaranteed legal status and also being the most optimal choice at this time. Therefore, the land market will have many positive factors, with clearer signs of growth.
Currently, this is the segment with the deepest price reduction, so buying land at this stage will be one of the advantages. When the market recovers, along with new regulations of the laws that will take effect from the beginning of 2025, new projects will have high prices," Mr. Chung assessed.
Meanwhile, the Chairman of G6 Group analyzed that at the present time, it is not advisable to invest in resort real estate, because it will take a very long time to make a profit. Or with apartments, at this time, buying for rent is too high, the capital recovery period is about 25 years. Buying an apartment to "flip" is not suitable at this time.
“The situation is similar for shophouses and podiums, the ability to rent out to recover capital also takes a long time. As for industrial real estate, investing and then renting or reselling, there is still room but it is no longer as “fertile” as in the 2018-2023 period because the price is already high,” said Mr. Que.
With experience in the profession, this leader believes that in every real estate cycle, there are two “king” segments. These are land plots and commercial centers, townhouses.
“Land has low value, high capital gain expectations, and high liquidity. Shopping malls or townhouses are the investment segment for rent, the “king” segment at the end of the cycle,” Mr. Que assessed.
However, when investing in this period, the leader of G6 Group noted that investors need to pay attention to planning issues.
“You should only buy real estate in places where planning has been stabilized or where planning is anticipated if you really have the information. When choosing the location of an investment product, it should be associated with residential or resort properties. If real estate is not associated with these factors, it is just speculation, “surfing” investment, and the risk for investors when wanting liquidity is very difficult,” Mr. Que noted.
Mr. Chung noted that when investing at this stage, investors need to pay attention to choosing products with full legal documents, choosing markets around Hanoi but closely linked to industrial parks, residential areas and products that aim at living values for residents, with full amenities such as schools, parks, hospitals, convenient traffic connections, etc.
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