Land prices drop sharply but no one buys
“In 2021, I bought 3 hectares of land in Dak Song district, Dak Nong province for 4.5 billion VND, but now I am selling it for more than 3 billion VND but no one is buying it,” said Mr. Tran Van Quang, an investor in District 3, Ho Chi Minh City.
According to Mr. Quang, at that time, his friends often invited each other to buy agricultural land for investment because many people wanted to "leave the city for the forest". Because of this trend, he bought land in Dak Nong to wait for the right time.
By 2023, seeing signs of economic decline, he decided to sell the land to recover capital, but after more than a year, he still has not sold it.
“I reduced the price by 30% but still have not found any customers. My family is also under a lot of pressure due to interest rates and reduced income. If the land cannot be sold, the difficulties will only increase,” Mr. Quang shared.
Mr. Quang, an investor in Ho Chi Minh City, accepted a 30% loss but still could not sell the agricultural land he bought in 2021. (Photo: D.V)
Mr. Quang is also one of many investors who cannot “exit” during this period. Those who cannot jump over the “wave” in time will have to wait for the next wave, and in the meantime, they have to overcome financial pressure.
According to VTC News, many investors in Ho Chi Minh City are selling agricultural land in Lam Dong, Binh Phuoc, Dak Nong, Dak Lak at a discount of 10-30%. The land for sale is priced from 4-15 billion VND, depending on location and area. However, very few investors have customers during this period. Most of the customers who ask to buy want to lower the price and are not in a hurry to pay.
The trend of "leaving the city for the forest" has become popular during the COVID-19 pandemic, causing prices of agricultural land and production forest land in areas such as Lam Dong, Binh Phuoc, Dak Nong, and Dak Lak to increase sharply.
In the period 2020 - 2021, agricultural land prices in these provinces increased 4 - 5 times compared to normal, causing many investors in Ho Chi Minh City to rush into the "game".
At that time, 1 hectare of land in Dak Nong and Dak Lak provinces costing around 300-400 million VND suddenly increased to 1.2-1.5 billion VND/hectare after only 5-6 months. Land in Binh Phuoc and Lam Dong also skyrocketed 2-3 times because many real estate brokerage companies in Ho Chi Minh City came to the market.
Speculators and land brokers compete to “inflate prices” because of the increased demand for land. However, when the wave passes, some investors become rich, but there are also those who “go bankrupt” because they are slow and become the last buyers, unable to get rid of the goods.
Many plots of land in Dak Lak are being sold at cheap prices. (Photo: D.V)
Expensive lesson for investors
Mr. Le Van Long, representative of a real estate company in Thu Duc City, said that the trend of "leaving the city for the forest" has cooled down. Many investors are selling land purchased from 2018 to 2021. However, to sell the land, investors often have to accept heavy losses.
Mr. Long shared that when "leaving the city for the forest" is called a trend, it only exists for a very short period. Investors and people need to remember that agricultural land businesses are mainly local land brokers or small speculators. These are groups that operate on a temporary and local basis, they are willing to continuously inflate prices to create virtual land fevers. When the fever passes, the main victims are still investors.
Mr. Nguyen Hoang, a real estate expert in Ho Chi Minh City, commented that the trend of leaving the city for the forest has been on the decline since the end of 2021. Currently, many investors have become "disillusioned" with this trend, not many people are successful with the homestay and farmstay models. This is also inevitable when people do not carefully consider the feasibility of the project they are pursuing.
“In the Central Highlands, many agricultural lands are divided into small plots of 100 - 200m2. Investors who are not alert will easily rush into these plots because of the easy price, but they do not notice that customers will not spend billions to buy such small plots of land in the Central Highlands and liquidity will be low. Besides, many large plots of land with affordable prices are located in remote areas, inconvenient transportation, limited utilities, leading to a lack of buyers," said Mr. Hoang.
Mr. Hoang said that although the land area is large and the price is easy to buy, if there is no clear business plan, investors can easily lose money if they cannot "sell off" early or do not have a specific financial plan. This is also the end result of many investors today.
According to Mr. Hoang, when investors cannot "keep up", they are forced to "hold land" for a long time, incurring financial costs and interest. Typically, many investors who bought land in Lam Dong were unable to sell their products for a long time.
According to Mr. Hoang, currently, if investors cut losses of 30-40% and can sell land, they are also lucky.
Mr. Hoang believes that investors and people who want to "leave the city for the forest" should have a specific plan for their land, which must be a detailed, clear project with established risks.
When people want to build a homestay or farmstay, they need to have a clear plan. Typically, what to plant, what to raise, what are the land improvement costs, construction costs, operating costs, land maintenance costs, etc. The land also needs convenient traffic connections, basic amenities such as markets, hospitals, and schools not too far away.
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