According to the report of PropertyGuru Vietnam experts, by the end of 2023, the secondary land market liquidity has shown signs of a slight increase, with investors starting to show a trend of investing in projects with high discounts, full legal documentation, located in densely populated existing residential areas, and convenient transportation connectivity to the central area.
Buyers now have stricter demands on the quality and legal aspects of projects. They tend to use more data to make decisions. These are data with many years of price fluctuations, investment profits, and supply-demand sources.
Although land plots are still one of the promising types of investment that attract people’s attention, in the short term, when the Land Law (amended), the Real Estate Business Law (amended), and the Housing Law (amended) take effect, there will be more difficulties for this segment from 2024.
Specifically, with the current regulations tightening on land subdivision, it is forecasted that the demand for land plots will significantly decrease as buyers are concerned about legal risks. At the same time, land prices will also be adjusted downward, especially for large plots.
Land plots are only suitable for long-term investors. (Illustrative image)
Economist Nguyen Minh Phong believes that due to the new regulations tightening on land subdivision activities under the amended Real Estate Business Law and the low liquidity throughout 2023, this segment will also need more time to recover. It is predicted that around the end of 2024, the land plot market may reverse.
” Investors who use financial leverage should not participate in the land plot segment at this time. As for large investors with strong financial resources, they have started to seek opportunities recently. “, Mr. Phong said.
Similarly, Mr. Dinh Minh Tuan, Director of a real estate information channel, forecasts that the land plot market will continue to face difficulties in the near future.
The amended Real Estate Business Law will officially take effect, and it will tighten the activities of land subdivision. This may further decrease the level of interest in land plots. Land plot prices will also be adjusted downwards, especially for large plots.
However, in the long run, land prices may continue to rise and transactions will resume. 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 run, land prices may continue to rise and transactions will resume as real estate prices depend on factors such as infrastructure development, economic growth, and people’s income. Land plots are a type of investment that anyone in the market can participate in due to the diversity in area, price, and location. Land plots in economically developing areas will still experience sustainable growth. “, Mr. Tuan commented.
Despite facing many difficulties, land plots are still a segment with great potential. Mr. Le Bao Long, Chief Strategy Officer of PropertyGuru Vietnam, provided evidence that in a survey of 1,000 candidates for the most attractive types of real estate in 2024, 33% said they would be interested in land plots, although this segment experienced a significant decline in transactions. Following that, individual houses and townhouses ranked second with 26% interest; apartments ranked third with 24%; followed by townhouses and villas at 9% and 6% respectively.
For land plots, the price range below 2 billion VND/plot attracted the most attention, accounting for 42%; the price range of 2-4 billion VND ranked second with 24% interest; the price range of 4-6 billion VND ranked third with 10% interest. The remaining two price ranges of 6-10 billion VND and above 15 billion VND had 9% and 15% interest respectively.
” Due to the mindset of “land is gold” inherited from previous generations, the demand for owning land and property accumulation of the Vietnamese people is very high. Therefore, it is not surprising that land plots receive the most attention from consumers in 2024. “, Mr. Long emphasized.
Real estate expert Tran Khanh Quang predicts that land plots will only recover demand from the second quarter of 2024 at the earliest. However, this segment will not experience a hot frenzy like before. Transactions will mainly occur in certain specific areas, without spreading widely. It may only be from 2025 onwards that the land plot market enters a period of price increase.
