According to a report by PropertyGuru Vietnam experts, by the end of 2023, the liquidity of the secondary land market has shown signs of a slight increase again, with investors starting to invest in projects with high discounts, full legal documents, locations near crowded existing residential areas, and convenient transportation connecting to the central area.
Buyers are more demanding in terms of quality and legality of projects. They tend to use more data to make decisions. That is data with many years of history on price fluctuations, investment returns and supply - demand.
Although land is still one of the promising types attracting people's attention, in reality, in the short term, when the Land Law (amended), the Real Estate Business Law (amended) and the Housing Law (amended) come into effect, it will bring more difficult impacts to this segment from 2024.
Specifically, with the current tightening regulations on land subdivision, it is forecasted that the demand for land will decrease sharply due to buyers’ concerns about legal risks. At the same time, the land price level will also be adjusted down, especially for large plots of land.
Land is only suitable for long-term investors. (Illustration photo)
Economist Nguyen Minh Phong said that due to the new regulations on tightening the subdivision and sale of land plots in the revised Law on Real Estate Business and low liquidity throughout 2023, this segment will also need more time to recover. It is forecasted that by the end of 2024, land plots will be able to reverse.
" Investors using financial leverage should not participate in the land segment at this time. As for large investors with strong cash flow, they have recently started looking for opportunities ," said Mr. Phong.
Sharing the same view, Mr. Dinh Minh Tuan, Director of a real estate information channel, predicted that in the coming time, the land market will continue to face difficulties.
The revised Law on Real Estate Business officially takes effect, tightening the subdivision and sale of land, which may cause the interest in land to continue to decline. The land price level will also be adjusted down, especially for large plots of land.
However, in the long term, land prices may continue to increase and transactions will return. The reason is that real estate prices also depend on other factors such as infrastructure development, economic growth, and people's income.
" In the long term, land prices may continue to increase and transactions will return because real estate prices depend on factors such as infrastructure development, economic growth, and people's income. Land is a type that any member of the market can invest in due to the diversity of area, price, and region. In localities with economic growth rates, land in these places will still grow sustainably ," Mr. Tuan commented.
Despite many difficulties, land is still a segment that is considered to have great potential. Mr. Le Bao Long, Strategy Director of PropertyGuru Vietnam, cited that in a survey of 1,000 candidates on the most interested real estate types in 2024, 33% said they would be interested in land, even though this type of transaction volume has decreased sharply. Next, private houses and townhouses ranked second with 26%; apartments ranked third with 24%; townhouses and villas were 9% and 6%, respectively.
For land, the price segment under 2 billion VND/plot attracted the most interest, accounting for 42%; the price range of 2-4 billion VND ranked second with 24% of interest; the price range of 4-6 billion VND ranked third with 10%. The remaining two price ranges of 6-10 billion VND and over 15 billion VND had interest levels of 9% and 15%, respectively.
" Because of the "every inch of land is gold" mindset of our ancestors, the demand for real estate ownership and the need for asset accumulation of Vietnamese people is very large. Therefore, it is not difficult to understand why land plots receive the most attention from consumers in 2024 ," Mr. Long emphasized.
Real estate expert Tran Khanh Quang predicts that it will take at least the second quarter of 2024 for land demand to recover. However, this segment will not be as hot as before. Transactions will mainly only appear in certain areas and have not spread widely. It will not be until 2025 onwards that the land market will enter a price increase cycle.
Chau Anh
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