With billions of dollars, should you invest in Hai Phong real estate?

Mr. Dinh Thanh, an investor in Hanoi, has 3 billion VND and wants to invest in real estate in the northern provinces.

Some markets such as Quang Ninh, Hai Phong, Bac Giang… are where Mr. Thanh is “aiming” to invest. In particular, he intends to “pour” investment money into Hai Phong at this time, but is wondering about the potential for price increase, as well as choosing the segment.

Perhaps, not only Mr. Thanh but many other investors are having the same concern.

Sharing with VietNamNet reporter, Mr. Le Dinh Chung, General Director of SGO Homes Real Estate Investment and Development Joint Stock Company said that investors need to choose markets with stable and sustainable economic growth. The Northern region, Quang Ninh, Bac Giang, Hai Phong are having good and stable growth rates.

In 2022, all three provinces ranked 1st, 2nd and 3rd respectively in the Provincial Competitiveness Index (CPI) rankings.

Regarding foreign direct investment (FDI), Hai Phong has so far attracted more than 1,000 FDI projects with a total investment capital of nearly 28 billion USD. In the first 8 months of 2023, the city has granted new licenses to 45 FDI projects with a total investment capital of nearly 2.1 billion USD and 11 domestic investment projects (DDI) with about 15,000 billion VND (nearly 600 million USD).

According to Mr. Chung, Quang Ninh, Hai Phong, and Bac Giang all have investment potential.

With billions of dollars, investors wonder whether they should invest in real estate in provinces on the outskirts of Hanoi? (Photo: N.Le)

However, in a deeper analysis, Mr. Chung said that the real estate market in Quang Ninh started to develop since 2015 and became stronger since 2017. Up to now, when many "big guys" entered to develop projects over the past 5 years, real estate prices increased 3-5 times.

Real estate prices in Quang Ninh are currently very high, with prices in many places starting at 100 million VND/m2 or more. With a period of rapid and hot development, the room for investment at this time will not be quick, but must be long-term.

In Bac Giang, in the past 3 years, it has also been a booming market, receiving the attention of investors, especially in the land segment. However, at this time, land investment is not a trend, it is slowing down, not a priority segment. The trend is focusing on residential real estate and cash flow real estate.

Meanwhile, according to the leader of SGO Homes, in Hai Phong, the supply of housing products over the past 5 years has not been too much.

“Low-rise supply is almost non-existent. Meanwhile, high-rise buildings are around 40 million VND/m2; this price is equivalent to Quang Ninh and Hanoi. Low-rise houses are currently priced at only about 1/3 of the price in Hanoi and Quang Ninh.

Hai Phong is oriented to develop demographic expansion, the population will increase by about 1 million people in the next 7 years or the industrial scale in the period of 2021 - 2025, the city plans to deploy construction of more than 6,200 hectares.... With a clear development orientation, the market has a low price base, strong investment speed shows that this is a potential market", Mr. Chung assessed.

Many large investors are investing in Hai Phong, which will be the driving force for the market to excel in the coming time. Mr. Chung commented that in the next 3 years, low-rise real estate products will increase in price by at least 30-50%; high-rise buildings will increase in price at a slower rate.

Notes when investing

Besides the above advantages, Mr. Chung also said that the Hai Phong real estate market still has some limitations such as relatively small project scale due to the project being located in the city center and scarce land fund.

Another limitation is that in Hai Phong, low-rise products will include both land and pre-built houses, so the total investment is larger than in some markets that only sell land, without houses.

When investing at this time, Mr. Chung noted that investors need to have 70% cash and should only use 30% financial leverage.

In this way, if an investor has about 3 billion VND, he can invest in products worth over 4 billion VND in the city center.

“Investors need to determine whether to invest short-term, long-term or medium-term. At this stage, it is best to determine medium-term investment, at least 2-3 years or more. At the same time, determine financial capacity to choose the right product. For example, if you have 5 billion VND, you should only choose a product worth 7 billion VND to buy; if you only have 2 billion VND, you should not choose to invest in a product worth 5-7 billion VND.

On the other hand, choosing a project in a central location, a project with solid legal status, and a capable investor are indispensable points when deciding to invest," Mr. Chung recommended.

What to invest when you have 300 million VND idle? Single, stable job with a monthly salary of 10 million VND; 350 million VND currently in savings at the bank. Should I continue saving to get interest or invest to make a profit?

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