Escaping the Burden: A 3-Year Saga to Sell a Plot of Land
Hoping to secure a handsome profit during the market’s peak, Ms. Lien, a grocery store owner residing in the Tan Binh district, listed her square-shaped plot of land in the Binh Tan district for 7 billion VND in early 2021.
Unfortunately, her aspirational price proved to be far above the land’s actual value, leaving it unsold for the past three years. Despite dropping her asking price to 5 billion VND (a nearly 30% decrease from the initial listing), Ms. Lien’s wait continued.
Her fortunes finally turned in late March 2024, when she sold the land for 4.7 billion VND, marking a 33% drop from her original demand. “After more than three years, I’ve finally unloaded this parcel,” Ms. Lien remarked with relief. “It’s not the price I hoped for, but given the current climate, it’s a fair outcome. What matters is that I can finally rest easy.”
Similar sentiments were echoed by Mr. Can, the sales manager of a real estate firm in Ho Chi Minh City. He observed a significant increase in transactions and interest in well-located land plots with clear legal documentation and reasonable pricing during the first quarter of 2024.
Explaining the shift, Mr. Can attributed it to the government’s recent efforts to remove obstacles and the passage of crucial legislation, including the Real Estate Business Law, the Housing Law, and the amended Land Law.
“In the past, our agents often spent their days idle, with no inquiries from potential buyers. However, we’ve witnessed a surge in inquiries and scheduled viewings recently. Plots under 2 billion VND are particularly sought-after and command the highest demand,” Mr. Can noted.
Property Seekers Cautiously Re-entering the Market
According to a report by Batdongsan.com.vn, there has been a notable increase in user searches for land plots in the early months of 2024. Specifically, the first quarter of 2024 saw a 48% rise in the interest towards land plots nationwide, compared to 44% in the last two quarters of 2023.
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Surge in Interest for Residential Land Plots |
In northern regions, demand for land plots within Hanoi’s suburban districts of Dong Anh, Long Bien, and Hoai Duc has climbed sharply, with a 1.7-2-fold increase compared to Q1 2023.
Meanwhile, in the South, the interest in land plots has stabilized. Areas like districts 9, 12, Thu Duc, and Hoc Mon have experienced a 13-25% surge in demand.
Despite this uptick, average asking prices for land plots in the southern region have declined by 3% in the first quarter of 2024 compared to the same period last year. In contrast, prices have increased by 25% in the North and 4% in the Central region. Land plots below 2 billion VND continue to garner the most attention.
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Price Drops for Residential Land Plots in Southern Provinces |
Mr. Dinh Minh Tuan, CEO of Batdongsan.com.vn, stated that the appeal of residential land plots as a “prime investment channel” is regaining momentum, with sub-2-billion-VND plots attracting the most interest. Since late 2023, there has been a growing presence of affluent investors acquiring large quantities of land plots.
While the market may not be as feverish as in 2021, data suggests that the desire to own property is gradually returning.
According to Batdongsan.com.vn’s Property Market Sentiment Index for Q1 2024 (based on a survey of 1,000 individuals), 65% of respondents still intend to purchase property within the next year. Notably, land plots remain the most sought-after type, accounting for one-third of expressed interest.
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Three Drivers of Land Market Recovery
Batdongsan.com.vn analysts believe that the land market’s resurgence is fueled by three primary factors. Firstly, the market’s cyclical nature dictates that demand for land plots typically rises in March, following the Lunar New Year.
Secondly, price adjustments in certain areas have enticed investors to consider re-entering the market. Several southern provinces, such as Ba Ria – Vung Tau, Long An, Lam Dong, and Dong Nai, have witnessed a 12-19% drop in land plot asking prices compared to early 2023.
The third driving force is the anticipation of significant changes brought about by three new laws that will come into effect in 2025.
“The stricter regulations on land subdivision are a hot topic, and experts predict a significant reduction in the supply of subdivided land plots after 2025. However, the demand for land plots is unlikely to diminish in the long run, given the strong cultural preference among Vietnamese for this type of asset. As supply dwindles and demand remains high, prices will inevitably increase. Many investors are eager to capitalize on this trend and are actively seeking land plots before the new laws take effect,” Mr. Tuan explained.
Mr. Tuan emphasized that residential land plots offer investment opportunities for individuals across the market spectrum, due to the wide range of sizes, prices, and locations available. In areas experiencing rapid economic growth, the residential land market is expected to continue its sustainable growth trajectory.
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According to the Socio-Economic Report for Q1 2024 by the Ho Chi Minh City Department of Statistics, the real estate sector generated revenue of nearly 61 trillion VND in the first three months of the year, marking a 15.7% increase year-over-year. The Department noted that the real estate market’s positive performance was driven by government policies and initiatives related to legal frameworks, interest rates, and project implementation. |
