Instead of saving at the bank, Mr. Quoc Dung from Dong Da, Hanoi, wants to invest in real estate at the end of the year. He is considering two options: land and apartments.
With the belief that “investing in land is never a loss” – as land prices tend to increase over time, Mr. Dung plans to invest in a plot of land in the province near Hanoi. However, with his current budget of 4 billion VND, he could also consider purchasing an apartment and renting it out monthly.
“I’m not sure whether to invest in land or buy an apartment. Which option is safer, more profitable, and less risky?” Mr. Dung wonders.
Mr. Le Dinh Chung, CEO of SGO Homes Real Estate Investment and Development Joint Stock Company, shared his analysis with our reporters. He said that in Hanoi, if you invest in an apartment for rent, there is high demand and it’s easy to find tenants. However, investing in apartments at this time may not be as profitable in terms of capital gains.
Mr. Chung explained that apartment prices are nearing their peak, leaving little room for capital appreciation. With the high purchase price of apartments, the rental yield is also less attractive. In reality, the rental yield for apartments in Hanoi fluctuates around only 3-4%.
 Investors are wondering whether to invest in land or apartments at the end of the year. Photo: Hoang Ha |
Therefore, according to Mr. Chung, land remains an attractive investment option as the supply of such products will be limited in the future due to restrictions on subdivision and sale. Additionally, land investment caters to various budget ranges, making it accessible to many people.
“With rapid urbanization, the demand for housing in peripheral provinces will increase. Hence, for capital gains, investing in land is still a good and safe option. With a budget of 3-4 billion VND, you can consider investing in land near Hanoi or in economic hubs associated with industrial zones such as Bac Ninh, Bac Giang, Hung Yen, Hai Duong, Hai Phong, or Quang Ninh. These areas are currently attracting many investors,” suggested Mr. Chung.
However, the CEO of SGO Homes also cautioned that when investing in land, it is crucial to pay attention to projects with adequate legal documentation, at least a purchase contract or a red book (land use right certificate). Investors should also consider the reputation and track record of the developer and choose locations that will attract future residents.
Mr. Pham Duc Toan, CEO of EZ Property, advised that investing in apartments or land in large cities like Hanoi and Ho Chi Minh City is currently not attractive or efficient. He explained that prices have already reached high levels, but liquidity is decreasing.
“Apartment prices have exceeded the affordability of many potential homebuyers. Previously, with 2.5-3 billion VND, one could purchase an apartment, but now it requires 4-5 billion VND. While investment prices have doubled, rental prices have not increased proportionally, leading to reduced investment efficiency. Land prices have also increased along with apartment prices. A 30 sqm house in an alley, built 3-4 stories high, which used to cost 3 billion VND, now costs 5-7 billion VND, depending on the location,” said Mr. Toan.
He added that many investors are shifting their capital from major cities like Hanoi and Ho Chi Minh City to other areas such as Hai Phong, Binh Duong, Dong Nai, and Ba Ria – Vung Tau.
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