Tired of being forced to lower prices, real estate investors "turn around" and wait for the market to recover

The real estate market in general, and the land segment in particular, are in a situation of "easy to buy, difficult to sell".

According to experts, from 2019 to early 2022, the real estate market in many places was bustling. At that time, many people who invested money in land after a very short time of "surfing" were able to earn hundreds of millions of dong, even those with large capital could quickly earn billions of dong. In that wave, many amateur investors with little experience also participated in investing, making the real estate market even hotter. However, by mid-2022, the market suddenly plummeted and fell into a slump. Liquidity continuously decreased, forcing many sellers to accept deep discounts to get their money back.

In reality, although many real estate investors have been forced to sell their investments at a loss of 10-30% or even more to get their money back and reduce the pressure of bank interest, not everyone can transfer their investments. Recently, many plots of land of investors have been sold at a loss but continue to be forced by buyers to reduce prices by 40-50%. Being forced to lower prices, some investors grit their teeth and sell their goods, but many investors are determined to "turn around", trying to hold out for as long as possible in the hope that the real estate market will soon recover.

Mr. Tran Van Hien (Binh Thanh District, Ho Chi Minh City) spent nearly 1 billion VND to buy a plot of land in Chon Thanh Town ( Binh Phuoc Province) since the beginning of 2019. Recently, due to needing capital for business, Mr. Hien asked a broker to find customers to transfer. There were also a few customers who viewed and offered to pay for Mr. Hien's 100m2 plot of land, but at a price of less than 700 million VND. Frustrated, Mr. Hien had to find capital from family and friends, and at the same time put aside the plan to sell the land, waiting for a better price to consider further.

Similarly, Ms. Oanh is also trying to hold on to her land plot in Hoa Phu commune, Cu Chi district (HCMC). Ms. Oanh said: "I bought this land plot in 2021. Recently, I wanted to sell it because I needed money, but the broker quoted a much lower price than when I bought it. Therefore, I decided to continue holding the land and wait for the market to recover instead of accepting being forced to lower the price."

Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association (HoREA) commented that the real estate market in the South is recording new developments. Besides investors trying to sell their products, deeply discounting or selling at all costs, many investors in suburban land, if not burdened by financial balance or not too "weak", choose to hold on to their land and wait for the market to recover instead of compromising. There are also many people who, because they cannot sell their products, accept to continue holding their land.

Data from Batdongsan.com.vn shows that in the first 5 months of 2023, land for sale in many southern localities has decreased by 20-30% in secondary transactions and at least 5-10% in primary sources, compared to the beginning of 2022, the common decrease is from 100 million VND to billion VND per plot, even in some places it has decreased by nearly 40-50%. The sharpest decreases are mainly concentrated in the group of investors using financial leverage, especially buying land during the peak price period or following the virtual fever in new markets that have not yet developed corresponding service infrastructure.

Mr. Tran Khanh Quang - Real estate expert said that land is a type of customary "buying for savings" and has a relatively low value. Garden land with cheap soil of about 2 billion VND in areas within a radius of 200km from Ho Chi Minh City is still the choice of investors. However, this is also a speculative segment, difficult to exploit for immediate use, so when cash flow is difficult, land transactions will stagnate. At least in this period, investors will still maintain a probing mentality, not spending money to buy land when information about interest rates and credit has not clearly improved.

Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association commented: "2023 is a year with many challenges, it may be from 2024 onwards that the real estate market in general, and the land segment in particular, can recover. But it will be difficult to see land fever or hot price increases like in previous years.

Despite facing many difficulties, the real estate market still faces great opportunities from the continued completion of the legal framework and the implementation of many infrastructure projects. At the same time, it is expected that interest rates will cool down after the State Bank actively reduces deposit interest rates to a stable level. When interest rates show signs of cooling down, it will contribute to promoting market liquidity and reducing pressure on investors."

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