Land plots attract more attention than apartments, is it time to 'put down money'? Procedures for converting garden land to residential land

Land plots and project land are attracting even more interest than apartments; experts suggest the best time to invest; Da Nang auctions off a trillion-VND land plot… These are the latest real estate news.

With the real estate market warming up at the beginning of the year, brokers, agencies, and developers have launched many business campaigns early to avoid missing out on opportunities to reach a large number of potential customers. (Source: Construction Newspaper)

New supply on the market will soon improve.

The latest data from Batdongsan.com.vn shows that, compared to the beginning of 2023, the real estate market this year has shown more positive signs in terms of both interest and the number of listings. This indicates that the demand for searching for properties for sale nationwide in January 2024 increased by 66% compared to the same period in 2023, and the number of real estate listings also increased by 52%.

Notably, in Hanoi and Ho Chi Minh City, interest in land plots and project land increased more sharply than in apartments. Specifically, in January 2024, searches for land plots in Hanoi increased by 110%, and project land by 77% compared to the same period last year. Meanwhile, searches for apartments in Hanoi increased by 71%. Similarly, in Ho Chi Minh City, search demand increased by 71% - 73% for land plots and project land, and only by 59% for apartments.

The above data partly reflects the desire of many people to own land, even though the market is no longer experiencing the land fever seen in early 2022. The Real Estate Consumer Sentiment (CSS) report and index from Batdongsan.com.vn for the first half of 2024 also indicates that up to 65% of respondents said they still intend to buy real estate in the next year; the proportion of purchases for investment accounts for 60%, and land plots remain the most sought-after type of property by prospective buyers.

With the real estate market gradually warming up at the beginning of the year, brokers, agencies, and developers have launched many business campaigns early to avoid missing the opportunity to reach a large number of potential customers.

Assessing the psychology and trends of real estate businesses, Mr. Dinh Minh Tuan, Director of batdongsan.com.vn, commented: Currently, many investors are determined to push sales early in 2024 because if they wait until 2025 when the 2023 Real Estate Business Law comes into effect, collecting funds will be more difficult and time-consuming. At that time, investors will only be allowed to collect a deposit of no more than 5% of the selling price of houses and construction projects under construction, and only after fulfilling all obligations to sell will they be allowed to collect another 25%. Therefore, this expert predicts that the new supply on the real estate market will soon improve in 2024.

According to Mr. Dinh Minh Tuan's research with more than 10 land plot businesses in Dong Nai, Binh Duong, and Long An provinces, all businesses shared that the number of land plot transactions increased at the beginning of this year. Most transactions focused on plots with proper legal documentation, priced under 2 billion VND, and located within a 60km radius of Ho Chi Minh City.

In the Hanoi market, for segments meeting real needs such as buying, selling, and renting secondary apartments or inner-city retail spaces, many real estate brokers have resumed work immediately after the Tet holiday. The scarcity of supply while demand remains strong has led to more active transactions in these segments after the Tet holiday.

When is the right time to invest?

According to a survey conducted at the end of 2023 by One Mount Real Estate, a market research and customer insights center, among the 63% of people with real estate needs in 2024, most were interested in apartments, land plots, and detached houses.

According to recently released data from a real estate research firm, interest in real estate quickly rebounded after the Lunar New Year holiday.

Previously, nationwide real estate search volume began to rise from the second day of Tet (Lunar New Year) and maintained a fairly strong upward trend, reaching a 124% increase by the tenth day of Tet compared to the week before Tet.

Notably, in Hanoi and Ho Chi Minh City, interest in land plots and project land has increased more sharply than in apartments.

A survey in Hoai Duc (Hanoi) shows that the demand for information about land plots in suburban areas has increased compared to the first months of 2023. However, the number of successful transactions is not high and has not improved much.

Currently, customers are still primarily engaged in market research and analysis. Investors' budgets typically range from around 2 billion VND.

Regarding the price of houses and land in alleyways in suburban areas, these are real estate products serving the needs of actual residents. The value per square meter is high, but the total value of the house is still much smaller compared to townhouses or villas because the area is small, only about 30-50 square meters, so houses in alleyways have continued to increase in price over time.

The market for houses located in alleys is mainly concentrated in districts such as Dong Anh, Hoai Duc, Thanh Tri, Gia Lam... The price is mostly around 100 million VND/m2 for houses on alleys about 2.5-3m wide.

For investors, low interest rates for homebuyers are an advantage in leverage strategies. However, despite the decrease in interest rates, experts advise against overuse.

According to experts, investing at this time is only advisable if you have sufficient funds and can find properties at good, affordable prices. In the short term, the real estate market is unlikely to recover immediately. The 2024 real estate market is not the time for speculative investment; it's still a period for considering long-term investment or purchase for personal use. Therefore, excessive financial leverage should be avoided, and investors should only focus on projects with complete legal documentation, flexible sales policies, and favorable interest rates.

Da Nang auctions off a "golden" plot of land worth trillions of dong, bordered by roads on all four sides.

The Land Development Center under the Da Nang Department of Natural Resources and Environment announces the auction of land plot A1-2-1 located on the road axis from the Han River Bridge to the sea on Pham Van Dong Street.

The land near the Han River bridge in Da Nang is currently being put up for auction. (Source: Dan Tri Newspaper)

The total land area is nearly 10,000 square meters, with a starting price of over 137 million VND per square meter. The land use period is 50 years, and the lessee pays in a lump sum. This plot of land is bordered by roads on all four sides.

The city has completed land clearance and infrastructure development. The land is intended for the construction of a shopping mall and office space for rent, with a total estimated investment of nearly 2,000 billion VND from the winning bidder.

Da Nang has stipulated that participating entities must pay 20% of the total land value in advance. In cases where two or more companies have cross-ownership according to the law on enterprises, only one company is allowed to participate in the auction.

Bidders must also submit a comprehensive report on the investment project, including its intended function, planning indicators, progress, and projected total investment.

Documents proving minimum equity capital to implement the project must not be less than 20% of the total projected investment, and a commitment not to be bankrupt or in the process of dissolution must be provided…

What procedures are required to convert garden land to residential land in 2024?

Converting garden land to residential land requires permission.

According to Clause 2, Article 9 of the 2024 Land Law, agricultural land includes the following types of land: Land for annual crops, including rice fields and other annual crop land; Land for perennial crops; Forestry land, including special-use forests, protection forests, and production forests; Aquaculture land; Concentrated livestock farming land; Salt production land; and other agricultural land.

Thus, according to Article 9 of the 2024 Land Law, the law does not classify garden land into any specific land group. However, based on land use purpose, garden land can be understood as land for growing annual crops or land for growing perennial crops (belonging to the agricultural land group).

At the same time, according to Article 121 of the 2024 Land Law, the conversion of agricultural land to non-agricultural land requires permission from the competent state agency.

Sequence and procedures for converting garden land to residential land.

* Steps to follow

Based on Article 69 of Decree 43/2014/ND-CP, the conversion of garden land to residential land is carried out in the following steps:

Step 1. Prepare the documents. Households and individuals need to prepare one set of documents, including: Application for permission to change land use purpose; Land use certificate (red book, pink book);

Step 2. Submit and receive documents:

Application submission locations: Option 1: Submit the application at the One-Stop Service Center to be forwarded to the Department of Natural Resources and Environment; Option 2: In areas where a One-Stop Service Center has not been established, submit the application directly to the Department of Natural Resources and Environment.

Receiving applications: If the application is complete, the receiving department will record it in the receipt log and give the applicant a receipt slip (the slip clearly states the deadline for receiving the results); If the application is incomplete or invalid, within no more than 3 working days, the applicant must be notified and guided to supplement and complete the application according to regulations.

Step 3. Resolving the request: At this stage, citizens need to remember their most important obligation: paying land use fees.

Step 4. Return the results.

* Processing time: No more than 15 days from the date of receipt of a valid application; no more than 25 days for mountainous, island, remote, and economically and socially disadvantaged areas.

Note: The above timeframe does not include weekends and public holidays as stipulated by law; nor does it include the time required for land users to fulfill their financial obligations.

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