Land Market in Ho Chi Minh City’s Outlying Districts Shows Signs of Improvement
Despite the proposal to elevate five suburban districts – Cu Chi, Hoc Mon, Binh Chanh, Can Gio, and Nha Be – to city status, the real estate market in these areas has yet to experience the anticipated surge. However, compared to the beginning of 2023, the land market in Cu Chi, Hoc Mon, and Can Gio has shown signs of increased demand. Additionally, the trend of deep price cuts has ceased, and demand in the 1-3 billion VND price range has improved.
These areas, which were once real estate hotspots and highly sensitive to infrastructure and planning news, have always attracted investor interest. From mid-2022 to mid-2023, land plots in Cu Chi, Hoc Mon, Binh Chanh, and Can Gio remained stagnant in both supply and transactions. During this period, there was a noticeable trend of investors selling land plots and townhouses at a loss. In early 2023, brokers reported a complete lack of transactions, even with significant price reductions.
Since the third quarter of 2023, the phenomenon of deep real estate price cuts has subsided, but transactions have not improved significantly. As 2024 began, the news of the cityhood plan once again had an impact on the real estate market in these areas, but overall, the pace of recovery remains slow. However, investor sentiment has improved with expectations of rising real estate prices.
According to observations, while prices of land plots and secondary homes dropped by 15-30% in early 2023, resulting in few transactions, this decline has moderated by the end of 2023. In Hoc Mon and Cu Chi, the rate of secondary price reductions has been around 10-20%. Currently, based on a survey of secondary prices, land plots and individual houses in stable areas are experiencing a slight decline of less than 10% compared to the prices at the beginning of 2022, and transactions are taking place. Properties owned by investors facing financial distress have registered price reductions of 25-30%, but the number of such properties has decreased significantly compared to early 2023.
Between January and August 2023, the land market in Cu Chi witnessed a surge in investors rushing to sell their properties due to financial difficulties.
For instance, a 90-square-meter land plot in Tan An Hoi commune was put up for sale at a clearance price of 820 million VND. A 100-square-meter plot with a pink book in Thai My commune is now being offered for 750 million VND, while a 98-square-meter land plot in Tan Phu Trung commune is being sold for 920 million VND. In the case of large land plots with a mix of agricultural and residential land use in Tan Phu Trung commune, there were numerous instances of landowners reducing prices from 9 billion VND to 6 billion VND to dispose of their properties. Currently, the extent of price reductions and the number of investors exiting the market have both decreased noticeably. Many investors are holding on to their properties in anticipation of price increases resulting from the planned infrastructure and zoning changes from 2024 onwards.
In mid-2023, an investor named Ms. Chi V, who owned two land plots in Cu Chi, was eager to sell them to raise cash, offering discounts of 20% and 30% on the respective plots. Now that she has secured alternative funding, she has decided to hold on to the properties until the market recovers. According to Ms. V, there were no buyers at the time, even with the reduced prices. She would have incurred a loss had she sold them. With the current positive market signals, she plans to wait for the market to improve further.
After a period of slow transactions, data from Nha Tot indicates that around October 2023, the downward trend in land prices in Can Gio, Cu Chi, and Hoc Mon districts transitioned from a sharp decline to a more moderate or even flat decline. This process has not been uniform across all localities.
Simultaneously, the demand from buyers in the townhouse segment in Hoc Mon and Cu Chi districts has increased by 50% and 23%, respectively. Notably, in Cu Chi district, the number of leads generated after viewing property listings has also shown a slight increase of 1.2%.
Nha Tot also highlights that the number of inquiries for townhouses below 3 billion VND in Hoc Mon has experienced a significant increase of around 9% at the end of 2023. Conversely, the townhouse segment above 3 billion VND in Hoc Mon has shown signs of decline.
In contrast, in Cu Chi district, the proportion of inquiries for townhouses over 3 billion VND has seen a slight increase of 2-3%, while the inquiry rate for properties below 3 billion VND has decreased by about 5%.
Land plots under 3 billion VND and between 3-7 billion VND have experienced growth in inquiry rates in Hoc Mon district, with increases of 1% and 4%, respectively. In contrast, land plots above 7 billion VND have seen a 7% decline in inquiries and searches.
In Hoc Mon district, residential land on major roads in Xuan Thoi Son, Xuan Thoi Thuong, and Ba Diem communes is currently priced at around 18-23 million VND per square meter, a slight decrease of 7-10% compared to the beginning of 2022. Discounted properties had already been transacted before the Lunar New Year.
Meanwhile, in Cu Chi, large plots of garden land or land for long-term crops, previously priced at 6-8 billion VND, are now typically discounted by 500 million to 1 billion VND per plot for investors who need to sell quickly. While these plots had no takers at the beginning of 2023, they have now started to receive inquiries.
The situation in Can Gio is similar. Data from Nha Tot indicates that at the end of 2023, real estate in Can Gio district showed positive signs of growth in supply (up 31%) and demand in the price segment below 4.3 billion VND per plot. The extent of price reductions for secondary land plots has declined significantly compared to the beginning of 2023. Some plots in communes such as Phong Phu and Long Thoi, which were heavily discounted by over 30% in the first half of 2023, are now seeing reductions of around 20%, and some have been sold. Additionally, small residential plots on Giong Ao Road, which were priced at 34 million VND per square meter at the beginning of 2023
