Despite positive information regarding the real estate market, transactions for suburban and adjacent land are still low, and the downward trend in the secondary market continues.
As of early September, VnExpress observations have shown that the downward trend in land prices in districts, districts on the outskirts of Ho Chi Minh City, and surrounding areas has shifted from a significant decrease to a more modest decrease or stagnation. This process is not uniform across all regions.
Specifically, in Ho Chi Minh City, in districts like Binh Chanh and Nha Be, there is still localized price reduction in secondary transactions (investors buying to resell), with many land plots being offered at a discount of 20-30%. Some larger land plots are open to negotiations for an additional 5-10% reduction if paid promptly. Land in areas such as Phong Phu and Long Thoi, which experienced significant price drops of 30-35% in the first half of the year, is still maintaining the same reduced prices due to a lack of buyers.
In the Thủ Đức district, newly listed land transactions have seen an average reduction of 15-20%. Some properties have experienced more significant reductions of over 30% in areas like Phuong Long Thanh My and Long Binh, although they are not widespread.
In Hoc Mon district, certain main road land plots in Xuan Thoi Son, Xuan Thoi Thuong, and Ba Diem are holding prices at around 17-21 million VND per square meter, which is an additional reduction of 7-10% compared to the beginning of the year. In Can Gio district, land transactions in areas like Phuoc Loc are taking place around 13-17 million VND per square meter for land with foundations already set. In Can Thanh town, transactions currently revolve around 25-27 million VND per square meter. Most have maintained their pricing from the previous quarter, but some landowners are willing to offer an additional 10% discount on the reduced prices.
For neighboring markets like Binh Duong, Long An, Dong Nai, Binh Phuoc, Tây Ninh, the pressure to sell is increasing as the year progresses. Many investors are struggling with liquidity and are forced to reduce prices by up to 40% from their peak values. Some land plots with individual land titles have also seen reductions of 15-20% compared to the beginning of the year.
A land investor involved in subdividing land for sale in Bien Hoa, Dong Nai, mentioned that he has 12 subdivided land plots, each with its own title, which he has been trying to sell since late 2022, and six plots are still unsold. He stated, "The initial price was 22 million VND per square meter, but it was reduced to 18 million VND. Currently, I am willing to sell at 16 million VND per square meter to clear the inventory quickly."
Phu, a land broker in Dong Nai, shared that over the last three months, successful land transactions have been scarce. While interest in this type of property has increased, most potential buyers are just inquiring about prices and have not committed to buying. Many landowners who have been trying to sell for 8-9 months have had to further reduce their prices.
A report from DKRA Vietnam shows that in the third quarter, Ho Chi Minh City and its surrounding areas recorded the launch of six land plot projects with a supply of about 271 plots, equivalent to 21% compared to the same period in 2022. The absorption rate reached only 25% (about 68 plots), which is 18% less than the previous quarter and 12% less than the same period last year.
Primary market prices increased by 1-3% compared to the same period in 2022. However, in secondary transactions of buying and reselling, prices continue to decrease by an average of 8-12% compared to the beginning of the year. Most of these transactions involve products that have experienced significant price reductions and have completed infrastructure and legal requirements.
A recent report from the Vietnam Real Estate Brokers Association also indicated that in the third quarter, the real estate market in major cities showed signs of hitting bottom. The purchasing power for apartments and houses priced below 10 billion VND in the central city areas has improved. However, for land plots, except for auctioned land, there have been slight improvements, and projects and free-market transactions are not gaining much attention yet.
According to the Batdongsan website, the search for land plots has continuously decreased from the second quarter of 2022 to the present. In the third quarter, the search for this segment decreased by 10% compared to the previous quarter and by 57% compared to the same period in 2022. Compared to the peak of the property fever in March last year, demand for land plots in the Southern region has dropped by 71%.
Nguyen Quoc Anh, Deputy Director of Batdongsan, believes that the recovery of the land plot market might be slower compared to other types of properties due to various factors, and a reversal might not occur until the end of 2024.
"Credit for real estate investment is still limited, and although interest rates are gradually decreasing, it would take 3-4 quarters to return to the interest rates of 2021. Market sentiment is still low for investment and speculation-driven real estate segments, serving less of a real housing need. Therefore, the recovery of land plots will be slower compared to other property types," Quoc Anh stated.
In agreement, CEO of Asian Holding, Nguyen Van Hau, believes that the segment catering to real housing needs will recover first. For land plots, the market will only recover once cash flow returns.
Despite being optimistic, Hau only expects a possible recovery of the land plot market in the second half of 2024. He believes that there won't be significant changes in this segment this year due to the unstable macroeconomic situation, with both individuals and businesses facing economic difficulties.
Taking a cautious approach, Tran Khanh Quang, CEO of Viet An Hoa Real Estate Company, also thinks that there is still some interest in land plots, but it is not enough to revive the market. Land plots on the outskirts are currently experiencing a challenging period. As this type of investment is speculative, the recovery is expected to be slower compared to other property types. Investment sentiment is weak at this stage, so a short-term recovery in land prices is unlikely.
However, according to Quang, land plots have always had an appeal to the Vietnamese people, and once the market begins to recover, land plots will be a sought-after property type. He predicts that the price struggle in transactions will end around the first half of next year, but the recovery will not be uniform. Land plots in the outskirts of Ho Chi Minh City will recover first, and then extend to neighboring provinces.