The southern land plot segment is witnessing improved liquidity, with brokers reporting better transactions compared to the first quarter of 2024. While well-priced land plots are quickly snapped up, even those with desirable locations and prices slightly reduced from the peak remain attractive to buyers.
According to a recent sharing by a real estate broker, there has been a growing demand for land plots since the announcement of tightened regulations on land subdivision in various cities and towns. The upcoming enforcement of the Real Estate Business Law from August 1, 2024, has also influenced investors’ psychology. Many understand that this type of land will become scarce in the next phase, leading to potential price increases. As a result, they have decided to act now. “Even with minimal price reductions, some land plots are still attracting investors. We’ve even seen instances of investors grouping together and engaging brokers to source additional well-priced plots,” the broker revealed.
Currently, land plot transactions are predominantly occurring in the outskirts of Ho Chi Minh City, with neighboring provinces exhibiting varied liquidity. Recently, a group of investors has emerged, scouting for large garden and forest land plots in certain provinces for future purposes, although this trend is not yet well-defined.
Southern land prices are gradually rising. Photo: HV
Compared to the end of 2023, land plots in the south have seen a 3-10% price increase in the secondary market, depending on the area. Deep discounts are less common now, except for cases where investors face financial distress and are forced to sell at 25% below their purchase price. Since the beginning of 2024, investor sentiment has stabilized due to positive market signals, fueling expectations of rising land plot prices in the coming phase.
Forecasts suggest that from now until the Real Estate Business Law of 2023 takes effect on August 1, 2024, the southern land plot segment will experience an increase in transaction volume. Both investors and end-users are seizing this opportunity to enter the market.
However, experts believe that a significant surge in land prices by the end of this year is unlikely. Prices are expected to remain stable or see only a slight increase. It will take until 2025-2026 for land prices and transactions to potentially rebound.
Mr. Vo Hong Thang, Director of Consulting and Project Development at DKRA Group, emphasized that the early enforcement of the Real Estate Business Law of 2023 will impact the real estate market, particularly the land plot segment. The tightened regulations on land subdivision could lead to a significant reduction in the supply of land plots, while demand is likely to remain robust in the long term due to the preference for this type of asset among Vietnamese investors. With limited supply and strong demand, land prices are expected to rise. Consequently, many investors are looking to capitalize on this trend and are actively seeking land plots before the new law takes effect.
However, from now until the end of the year, the land plot market is not expected to witness a surge in demand or prices. Mr. Thang predicts that the “tipping point” for this segment will occur from mid-2025 onwards. Additionally, investors entering the land plot market should prioritize medium to long-term investments with well-thought-out strategies, aiming for stable profits. The market is unlikely to deliver the exceptional returns seen in previous years.
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