Photo: Ha Vy
Once predicted to recover the slowest in the real estate market, the earliest in late 2024. However, recently, the land market has recorded a strong growth in demand for buying and trading.
According to Batdongsan.com.vn’s Q1/2024 Report, the land market has started to “thaw”. The level of interest in land in the last 2 quarters of 2023 only reached 44% of the demand in the 2021 fever period, but in the first quarter of 2024 it increased to 48%. In the North, demand for land purchase increased sharply in some suburban districts. In the South, land interest has stopped declining.
Compared to Q1/2023, currently, land demand in District 9, District 12, Thu Duc, Hoc Mon has increased from 13% to 25%.
Batdongsan.com.vn experts forecast that the market is gradually entering a new cycle. Around the beginning of 2025, the market will enter a consolidation phase. Currently, there are still many debts stuck in bonds, in the consolidation phase, if there are good measures to push cash flow into the market, most types of real estate will recover and enter a stable development phase around the beginning of 2026.
The representative of this unit also emphasized that land has shown the attractiveness of the “king investment channel” returning. The type under 2 billion is the most interested. From the end of 2023 to the beginning of this year, the market has seen more and more “shark” investment groups hunting for a large number of land. When demand increases more clearly, prices will increase.
The above data somewhat reflects the increasing demand for real estate ownership, although the market is no longer experiencing a land fever as in early 2022. Batdongsan’s consumer psychology index report indicates that there are up to 65% of respondents who intend to buy real estate within the next year. In which, the proportion of buying for investment accounts for 60% and land is still the type of real estate that future buyers are most interested in.
Previously, in the report of the Ministry of Construction, it also showed that land transactions had a positive growth in the second half of last year. Specifically, in the fourth quarter of 2023, the whole country had about 27,590 successful land transactions, accumulatively in the last 6 months of 2023, the number of land transactions increased by 28.4% compared to the first half of the year.
There are 3 motivations driving the recovery in both demand and price of the land segment.
The first is the cyclical nature of the land market, in March (after the Lunar New Year), the demand for land usually increases.
The second is that land prices have adjusted in some areas, prompting investors to consider entering the market. Many southern provinces such as Ba Ria – Vung Tau, Long An, Lam Dong, Dong Nai witnessed the current land selling price decreasing from 12% to 19% compared to the beginning of 2023.
The third is the wave of anticipation of changes in the 3 new laws that will take effect from 2025. The strict regulations on land division are a hot spot, it is forecasted that the supply of subdivided land will decrease sharply after 2025, but the demand for land will hardly decline in the long term because the psychology of Vietnamese people still favors this type. When supply is low and demand is high, land prices will go up.
Sharing about this segment, Mr. Vo Hong Thang – Director of DKRA Group’s Project Development & Consulting Services Division, stated that the Law on Real Estate Business (amended) taking effect from January 1, 2025) will certainly have certain impacts on the real estate market in general and the land segment in particular.
Typically, according to Clause 6, Article 31 of the draft Law on Real Estate Business (amended), the right to use land will not be transferred to individuals belonging to wards, districts, and cities of special-grade cities, type I cities, grade II, and type III. Expanding the scope of application compared to the current regulations (in special-grade cities and type I cities directly under the Central Government).
“These regulations are likely to contribute to increasing the pressure on the new supply of subdivided land coming to the market in the near future. From there, it will affect the price level of this segment,” emphasized Mr. Thang.
The Q1/2024 report of this unit also shows that the secondary price of land has recently increased by about 1% to 3% compared to the end of the year. Liquidity has many positive changes after the Lunar New Year, transactions are concentrated in the group of products – projects that have completed infrastructure, legal procedures deployed by prestigious investors in the market. Thus, it shows that the decline in land prices has stopped; signs of price increases have begun since the end of Q1/2024.
Along with the positive signs of the socio-economic situation in the first quarter of 2024, credit interest rates are at a low level, legal policy absorption,… are expected to create a foundation for the recovery of the land market in the near future.
However, according to most experts in the industry, land prices are unlikely to return anytime soon. The market is still in a stage of price adjustment and is affected by other factors such as confidence and macroeconomic factors.
