Real Estate Expert Forecasts Booming Market for Land in 2024

Currently, land plots are still highly valued by experts as they bring high profits and minimize risks, even in a slow-paced and low liquidity market.

0
152

Low supply, high demand

The real estate market in the southern region has been facing difficulties recently, with project legalities not being smooth and funds flowing into real estate being slow, resulting in low liquidity in the entire market. The segments of this industry are considered to have the lowest development in the past 5 years.

However, experts believe that the land market is still able to maintain stability and attract investors, as land plots bring long-term value and are trusted. According to DKRA’s market research report, the land segment in 2023 will receive 22 projects with a supply of about 1,850 plots, a 73% decrease compared to 2022, the lowest level in 5 years.

The consumption volume is about 751 plots, approximately 41% of the total new supply, an 84% decrease compared to the previous year. Transactions mainly occurred in the price range of 12.9 – 14.9 million VND/m2 and common areas ranging from 70-90 m2.

The suburban land market continues to hold the main position, mainly focusing on Binh Duong, accounting for 47% of the total market supply. The primary price range recorded a 10% – 13% decrease compared to 2022.

The secondary market recorded a 13% – 17% decrease compared to the beginning of 2023. However, this decrease occurred locally in the group of customers using loans, as well as in some large-scale projects that have not completed infrastructure and legal procedures.

Mr. Ha Van Thien, Deputy General Director of Tran Anh Group, said, “Currently, the real estate market is facing many difficulties, but this is the overall picture of the market. However, among the real estate segments, land plots are still an attractive channel that attracts capital flow and creates high liquidity.”

Meanwhile, the current reduction in interest rates by banks and the gradual recovery of industries in 2024, including land plots, a segment that accumulates long-term sustainable value, are leading to increased investment sentiment in this segment.

Land plots are still expected to have sustainable development in 2024.

Real Estate Law amendments make land market transparent

Recently, the National Assembly passed the amended Law on Real Estate Business, effective from the beginning of 2025, which tightens the sale and division of land plots. This also shows that the heat of land plots is gradually being regulated.

With the quantity of land plots released in urban areas in recent years, this tightening of land plots will affect the entire market from North to South, and land plots may no longer witness many land price fever like before.

Specifically, according to Clause 6 of Article 31 of the draft Law on Real Estate Business (amended), the transfer of land use rights to individuals in the ward, district, city area of special type, type I, type II, and type III urban areas will not be permitted. This expands the scope of application compared to current regulations (in special type and type I urban areas under the central government).

According to most experts, this regulation is likely to increase pressure on new supply sources of land plots in the market in the near future.

However, this move also brings certain benefits, as it is the premise for the sustainable development of the real estate market in general and the land plot segment in particular in the long term.

Many land sale projects with affordable prices to attract investors.

According to Le Dinh Lang, Director of Song Long Construction and Development Investment Company Limited, “The amended real estate law will have a great impact on the real estate market, greatly enhancing transparency in buying and selling activities, especially the activity of land plot sales. Specifically, the law helps strengthen state management control over land plot sales activities; ensure the harmony of aesthetics in architecture and urban planning (houses must be built on the land before being sold to buyers); ensure rational and efficient use, avoiding waste of national land resources…”

Mr. Ngo Quang Phuc, CEO of Phu Dong Group, also said, “The amended land law is very helpful for the real estate market, especially in terms of transparency in real estate development activities.”

According to Phuc, in 2024, besides the apartment segment, land plots are also expected and evaluated by experts to continue to lead the market.

“The psychology of investors and the people has always been asset accumulation, namely land and houses… Therefore, when bank interest rates decrease and money is circulated, investors will turn to land for investment because this segment brings very sustainable and long-term value. While currently, the value of land plots is no longer overheated or virtual, land buyers will find areas with affordable prices that fit their budget considering the story of asset accumulation,” Phuc commented.

Real estate projects with completed infrastructure are expected to be a major supply source, attracting funds from investors.

According to Mr. Pham Lam, CEO of DKRA Group, the new supply source of land plots in 2024 will continue to be scarce. The new supply source is expected to range from about 2,900 – 3,100 plots, mainly concentrated in Long An, Dong Nai, and Binh Duong.

Market attention will focus on the product group developed by reputable investors with strong financial potential and projects that have completed infrastructure and legal procedures. The land price level will maintain a stable level, making unexpected price increases in 2024 unlikely.

SOURCEcafef
Previous article‘Unusual surge in prices of old apartments’
Next articleSeries of Violations in the Hoan Son Residential Project, Tien Du, Bac Ninh