Land Price Illusion: Land Owners’ Refusal to Sell and the Inevitable Outcome

Many HCMC homeowners are "pivoting" away from selling, believing that property prices are on the rise.

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Recent positive signals in the Southern real estate market are having several effects. In addition to investors seizing opportunities to sell and generate cash flow, some are holding back, despite financial strain. Several have listed properties with brokers but are now hesitating or withdrawing them.

Three months ago, an investor listed a 100m2 plot in District 9 (formerly, now Thu Duc City, Ho Chi Minh City) for VND 5.2 billion. When brokers recently contacted him to offer VND 4.8 – 5 billion per plot with potential buyers, he reconsidered.

Initially, he received no inquiries from brokers. Now, with increased broker interest and positive market signals, he believes real estate prices are rising and has decided not to sell.

Similarly, in the same area, a broker is urgently listing a 50m2 plot for VND 2.4 billion. Despite financial difficulties, the landowner is reluctant to sell at the listed price after repeated queries from the broker. After “considering” the price, the owner decided to only sell at VND 2.6 billion. However, brokers find it challenging to sell at this price in the current market.

According to brokers, land prices in Ho Chi Minh City are unlikely to increase significantly in the short term. Photo: Tieu Bao

Investors are becoming increasingly hesitant to sell due to the fear of missing out on potential gains. Expecting prices to continue rising, they are putting their properties on hold. However, brokers report that most properties (land and houses) in Ho Chi Minh City and surrounding areas are currently selling at 10-20% below early 2022 prices (depending on the property and location). There is also ample supply in the market. As such, investors hoping for a quick price surge may be disappointed. Only those with long-term financial stability may have an opportunity.

A broker shared an instance where an investor regretted not selling and later had to list at a lower price due to urgent cash needs. “With demand yet to fully recover, brokers may struggle to sell properties if sellers set unrealistic price expectations,” the broker said.

According to brokers, those reconsidering their decision to sell are generally financially stable. Rather than selling below their expectations, they are holding out for better offers.