Hanoi land price begins to "cool down"

No longer increasing in price by 20 - 40%, the land segment in Hanoi is gradually stabilizing again and only recording a slight increase of 3 - 5%.

Investor sentiment changes

As someone who is willing to travel 30-40 km to the suburbs to see land, Duc Tung (a warehouse worker) has now given up chasing the real estate fever. Long trips without results have exhausted him both physically and mentally.

“Earlier this year, I successfully traded a plot of land and made a small profit. Seeing that real estate trading was “profitable”, I continued to hunt for residential land, but I still haven’t bought any. The reason is that the market is very chaotic, with different prices in the same area, making me very confused,” Mr. Tung shared.

Citing facts, Mr. Tung said that two weeks ago, a broker introduced him to a 135 m2 plot of land in Hop Tien commune (My Duc district, Hanoi) for 1.5 billion VND. However, after investigating, he discovered that the owner of that plot of land was selling it for about 200 million VND lower.

“Although it is common for brokers to receive commissions, increasing the price by more than 15% is unacceptable. Even the land owner did not expect the broker to sell at such a large difference,” said Mr. Tung.

Many newspapers questioned the fever of the land segment, causing the excitement from buyers to cool down. They were worried that they would rush into the market at the peak and buy at “sky-high” prices.

According to investor Nguyen Tuan Quang, the recent land fever has helped many “sharks” successfully sell their goods. The market is now in a period of stabilization and waiting for the next price increase. In addition, investors are no longer as enthusiastic about land compared to the first 3 months of this year.

“The fact that many newspapers questioned the fever of the land segment has cooled down the excitement of buyers. They are worried that they will rush into the market at the peak and buy real estate at sky-high prices. Therefore, investment intentions are temporarily put on hold,” Mr. Quang analyzed.

Statistics from Batdongsan show that in April 2024, the number of land plots for sale remained the same as the previous month, but the level of public interest (reflected through searches) dropped by 5%. In the project land segment alone, the level of interest dropped by 19%.

The above figures not only show that the land fever has cooled down, but also show that the project land segment is inferior. This is more clearly shown in the first quarter 2024 report of the Ministry of Construction. Although the total land transaction volume is nearly 20% higher than the first quarter 2023, the project land inventory still increased by more than 30%.

The market is entering a price adjustment phase.

Speaking to a reporter from Dau Tu Newspaper, Mr. Ngo Xuan Chuc, Director of a real estate transaction center in Hanoi, commented that the current market picture has changed compared to the beginning of the year.

“The land segment has slowed down for the past half month. Land prices have not decreased, but have not increased too much either, even in areas around Ring Road 4,” said Mr. Chuc.

Regarding the reason why land prices have cooled down, Mr. Chuc said there are three main reasons.

Firstly, investors want to observe more about the practical impacts of the 2024 Land Law, especially when in less than 2 months, this law will officially be applied.

Second, the continuous rise in gold prices has created a FOMO (fear of missing out) mentality among the public. Many people have switched to “catching the trend” of gold, instead of investing in real estate.

Third, it comes from the unreasonable price increase from the seller side. Some suburban areas recorded land prices exceeding 100 million VND/m2, while previously it was only 60-70 million VND/m2. This number has discouraged many investors.

According to Ms. Pham Thi Mien, Deputy Head of Market Research and Consulting, Investment Promotion of Vietnam Association of Realtors (VARS), land plots are still the priority segment in the real estate “collection” of investors. However, this product line is currently in the stage of adjusting the selling price.

“The land market in planning hotspots such as Dong Anh, Gia Lam, or areas around Ring Road 4 is still receiving attention from investors. Currently, land prices are gradually stabilizing, only increasing slightly by 3-5%. This is in contrast to the first quarter of 2024, when land prices in many places skyrocketed by 20-40%,” Ms. Mien shared.

However, the expert from VARS believes that land is a segment worth investing in the future. In particular, residential land products with a price range of 2 - 3 billion VND still have good liquidity.

Speaking further about the reasons why the project land segment is still gloomy, Ms. Mien said that project land often has incomplete surrounding infrastructure. This makes it difficult for investors to imagine the potential of the land they will put money on.

In addition, the success or failure of the project land also depends largely on the investor. In the context of the market in the recovery phase, many businesses are still weak, the ability to complete the project is still a big question mark. Therefore, buyers often tend to look for residential land to be more proactive in assessing the situation.

In general, the land market is no longer in a "feverish" state as before and is gradually entering a stable phase. Currently, investors in this segment are in a "wait and see" state, waiting for the impacts of the 2024 Land Law.

Source: https://baodautu.vn/batdongsan/dat-nen-ha-noi-bat-dau-ha-nhiet-d215732.html