Land prices plummet but no one is buying
“In 2021, I bought 3 hectares of land in Dak Song district, Dak Nong province for 4.5 billion VND, but now I’m selling it for over 3 billion VND and no one is buying,” said Mr. Tran Van Quang, an investor in District 3, Ho Chi Minh City.
According to Mr. Quang, at that time, his friends often encouraged each other to buy agricultural land for investment because many people wanted to “return to the countryside”. It was because of this trend that he bought land in Dak Nong and waited for the right time.
In 2023, seeing the economy showing signs of decline, he decided to sell the land to recover his capital, but it has been over a year and he still hasn’t sold it.
“I have reduced the price by 30% but still have no prospective buyers. My family is also under pressure from loans and decreasing income. If the land cannot be sold, the difficulties will continue to pile up,” Mr. Quang shared.
Mr. Quang, an investor in Ho Chi Minh City, is willing to take a 30% loss to sell the agricultural land he bought in 2021. (Photo: D.V)
Mr. Quang is also just one of many investors who are unable to “get rid of their stock” during this period. Those who missed the trend have no choice but to wait for the next wave, and during that waiting period, they have to overcome financial pressures.
According to VTC News, many investors in Ho Chi Minh City are selling agricultural land in Lam Dong, Binh Phuoc, Dak Nong, and Dak Lak provinces at prices reduced by 10-30%. The selling prices of these land areas range from 4 to 15 billion VND, depending on the location and size. However, very few investors have made deals during this period. Most of the potential buyers want to negotiate a significant discount and are not in a hurry to pay.
The trend of “returning to the countryside” peaked during the COVID-19 pandemic, causing the prices of agricultural land and production forests in regions such as Lam Dong, Binh Phuoc, Dak Nong, and Dak Lak to soar.
From 2020 to 2021, the prices of agricultural land in these provinces increased four to five times higher than normal, attracting the attention of many investors in Ho Chi Minh City.
At that time, a hectare of land in Dak Nong and Dak Lak provinces was priced at around 300-400 million VND and suddenly increased to 1.2-1.5 billion VND/hectare within 5-6 months. Land prices in Binh Phuoc and Lam Dong provinces also skyrocketed two to three times due to the influx of real estate brokers from Ho Chi Minh City.
Speculators and land brokers inflated prices because of the increasing demand for land. However, when the wave passed, some investors became wealthy, while others were left bankrupt because they were slow and became the last buyers who couldn’t sell off their stock.
Many land plots in Dak Lak are being sold at low prices. (Photo: D.V)
Valuable lesson for investors
Mr. Le Van Long, a representative of a real estate company in Thu Duc City, said that the trend of “returning to the countryside” has cooled down. Many investors are now selling the land they purchased between 2018 and 2021. However, to sell the land, investors often have to accept heavy losses.
Mr. Long shared that when “returning to the countryside” was called a trend, it only existed for a very short period. Investors and residents need to remember that the majority of agricultural land traders are local land brokers or small speculators. They are operating during specific periods and in specific areas, being willing to inflate prices continuously to create virtual land price surges. When the surges subside, the main losses are borne by investors.
Mr. Nguyen Hoang, a real estate expert in Ho Chi Minh City, believes that the trend of returning to the countryside has been declining since the end of 2021. At present, many investors have “broken their dreams” with this trend, and only a few have succeeded in the homestay and farmstay models. This is inevitable when people do not carefully consider the feasibility of the projects they are pursuing.
“In the Central Highlands region, many agricultural land parcels are divided into small plots of 100-200m2. Unwise investors easily fall into buying these plots because they are cheap, but they fail to realize that customers will not spend billions to buy such small plots in the Central Highlands, and liquidity will be low. In addition, many large land plots with affordable prices are located in remote and underdeveloped areas, with inconvenient transportation and limited amenities, leading to a limited number of potential buyers,” Mr. Hoang said.
Mr. Hoang stated that even though the land area is large and the prices are affordable, if there is no clear business plan, investors are likely to suffer losses if they fail to “dispose of their assets” early or do not have a specific financial plan. This is also the outcome for many investors at present.
According to Mr. Hoang, when investors cannot keep up with the situation, they are forced to “hold onto their land” for a long time, incurring financial costs and interest rates. For example, many investors who bought land in Lam Dong have been unable to sell their properties for a long period of time.
Mr. Hoang also believes that if investors can sell their land at a 30-40% loss, it can be considered lucky.
Mr. Hoang suggests that investors and individuals who want to “return to the countryside” should have specific plans for their land. It must be a detailed and clear project with established risks.
When people want to operate a homestay or farmstay, they need to have a clear plan. For example, what crops to grow, what animals to raise, the costs of land reclamation and construction, operating costs, and land management. The land area also needs to be well-connected with convenient transportation, and basic amenities such as markets, hospitals, and schools should not be too far away.
