Land prices are on the rise
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, reached only 44% of the demand during the peak period in 2021, but increased to 48% in Q1/2024. In the North, the demand for land purchase increased sharply in some suburban districts. In the South, the level of interest in land has stopped declining.
According to the Vietnam Real Estate Brokers Association (VARS), many areas recorded a “sudden” increase in the number of land transactions, especially for plots that had been subdivided. There are more investors going to “hunt” for land in the suburban areas of big cities, localities with strong infrastructure development, and high urbanization rate.
The successful transaction prices of land have decreased by 20-30% compared to the peak of the fever, but have stabilized and show no signs of decreasing. Compared to Q4/2023, prices have increased by about 5%, with the market in the outskirts of Hanoi and those associated with industrial parks recording an increase of 10-20%.
However, the market also recorded some areas with an “unreasonable price increase”. “It is necessary to be extremely cautious to avoid creating “false” fevers, which could lead to risks of insecurity, when the market is still recovering”, according to the warning from the report.
“Spring” for land is coming early
Mr. Dinh Minh Tuan – Director of Batdongsan.com.vn in the South, said: “At the end of 2023, when assessing the recovery potential of the real estate market, we had predicted that land will be one of the segments that would recover slowly and would need more time to regain liquidity compared to apartments, private houses, and townhouses. However, it is highly likely that the “spring” for land is coming sooner than the market had expected”.
Mr. Tuan thinks that this segment has shown that the attraction of the “the king of investment channels” has returned. In the first 3 months of the year, an increasing number of “big” investor groups have appeared on the market to purchase a large amount of land. This movement is likely to push up the land price increase cycle earlier than previously forecasted, possibly from Q2 this year.
According to Mr. Tuan, the price of land is still stable, but as the end of Q1 approaches, the number of investors with available cash to collect goods and buy land will increase. When the demand increases more clearly, the price will increase. Many land brokerage firms have also confirmed that land prices have been adjusted as early as March of this year.
“Currently, it is a good time to look for land investment funds. However, investors should choose plots of land with reasonable prices, under 2 billion VND, with full legal documents, and with a certificate of ownership. It is predicted that this group will record an increase in transactions in the coming time.
When the amended laws are all applied from January 1, 2025, the supply of land will be scarcer because investors will be restricted from subdividing plots for sale. At this time, land prices may move into a new price increase cycle. In the previous law adjustments, land prices have only increased, not decreased. 2024 – 2025 could be the last chance to buy land for those who have real demand, while for investors, this is still a difficult period. Therefore, investors should consider carefully before spending,” said Mr. Tuan.
In the long term, Mr. Tuan thinks that land prices may continue to increase, and transactions will recover. The reason is that real estate prices also depend on other factors such as infrastructure development, economic growth, and people’s income. Due to the “every inch of land is gold” mentality, Vietnamese people’s demand for owning land and assets is very high. Therefore, it is not difficult to understand why land received the most attention from consumers in 2024.
Dr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS) thinks that the first half of the year is a “once-in-a-lifetime” opportunity, a suitable period for experienced investors and professional investors to collect good inventories. Long-term investments within 3-5 years will bring high profits.
