"Catching the wave" of new policies, land traders hunt for urban land

Hunting for urban land

A series of new regulations in the revised Law on Real Estate Business will take effect from January 1, 2025. This law has stricter regulations on land subdivision and sale than current regulations, which is of interest to public opinion, especially land traders.

Specifically, the new regulation will prevent the subdivision and sale of land plots in wards, districts, and cities of special-class, class I, class II, and class III urban areas; areas with high requirements for landscape architecture, central areas and around buildings that are architectural highlights in urban areas; frontages of regional-level roads and above, and main landscape roads in urban areas.

According to many real estate experts, in the long term, the regulation on tightening land subdivision and sale will help the market develop in a more transparent and sustainable direction. However, the market will have major fluctuations after the new Law takes effect in early 2025.

New projects will be harder to get approved. In addition, land subdivision projects in urban areas of type II and III that have been implemented are still being transferred normally, and may even benefit from price benefits. The relationship between supply and demand makes the prices of these products increase rather than decrease.

Đón sóng chính sách mới, giới buôn đất săn lùng đất nền đô thị - 1 — A corner of Hanoi seen from above with dense townhouses (Photo: Ha Phong).

Catching the "wave" of this new policy, many investors with many years of experience in land trading have also started looking for land in areas where subdivision and sale of land is prohibited under the new regulations. In particular, in this context, the land market is showing signs of slowing down, with some places having deep price reductions and cutting losses.

Mr. Nguyen Van Khanh - a real estate investor in Hanoi - said that the land market in the coming time will be especially scarce in urban areas where land is not divided into plots for sale. Obviously, when supply is scarce, this product will have many opportunities to increase in price.

"Previously, we investors targeted large plots of land in the suburbs, aiming to divide and sell the land. But with the upcoming new regulations, many investors will hunt for plots of land in residential areas, auction areas, and resettlement areas with certificates in the central district," said Mr. Khanh, and commented that existing plots of land with full legal documents will have the potential to increase in price quickly in the near future.

However, according to Mr. Khanh, although he sees the potential for high price increases, not all investors can buy this land product. Because the prices of legal land plots in some central districts of Hanoi are currently high.

With more than 20 years of experience in real estate investment, Mr. Tran Van Huy, in Thanh Xuan district (Hanoi) commented that the land market in areas that are not allowed to be divided into plots for sale according to the new regulations will have many fluctuations in the trend of increasing prices. The most obvious reason is that the supply of this real estate product will fall into a state of scarcity.

"The price of subdivided land has shown signs of decreasing after a period of "land fever", but is still high. In the market, there are only a few plots of land that have been reduced in price or sold at a loss because the landowners are under financial pressure and have bad locations," said Mr. Khanh.

Still need long term

According to experts from the information website Batdongsan.com.vn, in the context of the real estate market going through a challenging year, the need to own real estate of the people is always present. In terms of segments, land is the type that potential buyers are most interested in (accounting for 33%), followed by private houses (accounting for 26%) and apartments (accounting for 24%).

Explaining this leading trend of land, Strategic Director Le Bao Long of the above information site said that consumers have high expectations for land. With a low price range, this type of land always attracts the attention of investors.

Đón sóng chính sách mới, giới buôn đất săn lùng đất nền đô thị - 2 — A housing project that was once allowed to divide and sell plots of land in Hoang Mai district (Illustration: Ha Phong).

People tend to invest in real estate whenever they have extra money and see the market is getting a little better. The first type that comes to mind is land, and they think that land is a type of property with a very good, very high profit margin.

In fact, land products are easier to buy and sell than other types of real estate. The price of a private house is about 7-12 billion VND, but with land, buyers can buy it for only 3-5 billion VND.

According to many real estate experts, the real estate market has recorded a recovery, but is still at a low level.

However, if you want to invest in land at this time, the most important issue is that investors must consider their financial capacity because this is no longer the time for speculative investors. Along with that, investors should choose products with clear legal status, serving real housing needs.

"The market needs more time to recover. I think this is the stage where investors who do not use too much financial leverage will buy more. Land investors at this time must determine the medium and long term," Mr. Nguyen The Diep, Vice President of the Hanoi Real Estate Club, advised.

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