Many buyers, land prices in the provinces are 'warming up' again

The market is warming up

More than 2 years ago, Mr. Tran Hoang Anh (an investor in Hanoi) spent more than 3 billion VND to buy a plot of land adjacent to an inter-provincial road, located near an urban area in Yen Phong district, Bac Ninh province. Although he bought it during a land fever, with the current price level, if he could sell it, he would still have a profit of about 1 billion VND.

Mr. Hoang Anh said that he bought the above plot of land in early 2021 - when the market was heating up. There was a time when the price of this plot of land increased to nearly 5 billion VND, but then the market was gloomy, and no one asked to buy the plot of land.

However, recently, especially since August 2024, when the Land Law takes effect, the land market in Bac Ninh has shown signs of warming up again. " Currently, many investors are asking to buy my land, some have offered up to 4 billion VND, I have made a profit of 1 billion VND. However, I do not want to sell at this time because in the coming time, land prices may increase even more ," said Mr. Hoang Anh.

Similarly, Ms. Le Thi Man (an investor in Hanoi) said that since the beginning of July, she has started hunting for land in Van Giang district (Hung Yen) to catch the investment wave. Her priority is areas with good locations, priced at 2-3 billion VND, with clean legal documents, located along inter-commune roads.

Land prices in the provinces show signs of warming up. (Illustration photo).

According to Ms. Man, the investment wave is currently starting to calm down in Hanoi because prices have been pushed up too high. Therefore, the provinces surrounding Hanoi will certainly have waves again.

" The two plots of land I bought in August for 5.2 billion VND have now been sold for 6.8 billion VND. Recently, beautiful plots of land in Van Giang have been sold within just a few days of being advertised. The market is gradually warming up and many investors are starting to flock to these markets ," said Ms. Man.

The trend of money flow is to "flow" into suburban provinces.

According to real estate "hunters", land prices in many provinces near Hanoi are gradually warming up for many reasons. Firstly, the Land Law is in effect, and the subdivision and sale of land in remote areas will be restricted in the near future.

Land plots in remote areas with "clean" legal status will become increasingly scarce, especially for plots of land that already have residential land. The reason is that the new land use price list will be applied nationwide after 2025, making the cost of converting to residential land very high, possibly accounting for 50% to 70% of the market price. This makes existing land plots on the market more attractive, which is also one of the factors leading to price increases.

In addition, after two years of stagnant real estate market, many investors have chosen to save money to protect their capital. However, now that the market is considered to have entered a new growth cycle, they tend to withdraw money from savings to invest in real estate in the hope of achieving higher profits.

In addition, the significant decrease in interest rates is also one of the reasons for the increase in the heat of land. Previously, savings interest rates could reach 8% - 10% per year, but in the past year, this interest rate has decreased sharply. Therefore, many investors no longer want to save money but switch to other investment channels.

Commenting on this issue, Mr. Le Dinh Chung, General Director of SGO Homes Real Estate Investment and Development Joint Stock Company analyzed: When Hanoi real estate prices increase, investment demand will not increase sharply in the near future. Currently, customers with 5-10 billion VND in hand have almost no opportunity to invest in the Hanoi market.

According to his observation, from May onwards, the cash flow trend is to "flow" into the suburban provinces of Hanoi such as: Bac Ninh, Bac Giang, Hung Yen, Hai Duong... Regarding the provincial market, Mr. Chung believes that land will recover because this is still the common taste of investors.

With the shift to the suburbs, the real estate supply in these areas will become more diverse, from land, apartments to townhouses and villas. This will give investors more options and meet the diverse needs of the market. Despite the investment shift, real estate prices in suburban areas are expected to increase but will still remain at a reasonable level compared to central areas. This stability will attract more investors.

" The shift of investment to suburban areas in the second half of 2024 is an inevitable trend due to factors such as prices, legal regulations and infrastructure development. Suburban areas have the potential for more sustainable development thanks to synchronous planning and infrastructure development. This not only helps increase real estate value but also improves the quality of life of residents ," Mr. Chung shared.

Sharing the same view, Mr. Le Xuan Nga, General Director of BHS Real Estate Company, also said that recently, real estate prices in Hanoi have increased too strongly because the cash flow is too concentrated in the inner city, not flowing out.

According to Mr. Nga, the game in Hanoi will be very fierce for investors and is only for "big" investors, with investment budgets of 15 billion or more. Smaller budget investors will find ways to move early to other provinces and other regions. Therefore, sooner or later, the cash flow will flow out of Hanoi, maybe at the end of 2024 or early 2025. This is also what happened in previous real estate cycles.

Chau Anh

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