Investors want to sell off real estate

Suburban land reduced by 30% but still cannot find customers

Mr. Nguyen Hai Quan (investor in Lang Hoa Lac high-tech park land) said that at the end of 2021, when the real estate market was bustling, he and his investment group borrowed 20 billion VND from the bank to buy 3 plots of land in Phu Cat (Quoc Oai, Hanoi ). Due to missed liquidity, the real estate market froze so quickly that he could not react in time. Currently, he is under pressure to repay the bank loan while there is no income stream, and he does not know when the land will be sold.

“Every month I have to worry about paying interest and principal of more than 300 million VND to the bank. Because I have no source to pay the debt, I accept to sell at a loss of 5 million VND/m2 of land, equivalent to 30% - 40% but still cannot sell. I am afraid that if the real estate market continues to freeze for another 1 - 2 years, many investors will be forced to go bankrupt because they cannot pay the debt,” Mr. Quan worried.

The real estate market has been continuously declining for many months.

Mr. Dinh Tuong Anh - a land investor in Thach That, Hanoi said that in 2022, after receiving information that the Lang Hoa Lac high-tech park project was transferred to the Hanoi People's Committee for management.

Many investors have placed their trust in the accelerated progress of functional subdivisions, so they have boldly spent money to buy land to build motels, shops, etc. Mr. Tuong Anh's group has bought 2 plots of land on a large road next to the high-tech zone at an average price of 60 million VND/m2, more than twice as high as before.

“In the midst of the price fever, we decided to borrow more than 5 billion VND with the intention of “surfing”. But then the market went down so fast that we couldn’t react in time. For nearly 6 months, we have been selling at a discount of 10-12 million VND/m2 but could not sell, or customers asked but offered too low a price. In the next few months, if the situation does not improve, he and his associates will accept further losses to sell one lot, collect the money to pay off the loan. The remaining lot will wait until the real estate market improves, and we can sell it at a higher price to make up for this loss-making lot,” said Mr. Tuong Anh.

The “stranded” situation is also happening to many investors who are buying land in the suburbs of Hanoi. After the period of land prices “dancing” according to the planning, most of them have frozen, with no transactions. Regarding selling prices, suburban land has recorded a decline.

In particular, Gia Lam land from the highest average price of 50 million VND/m2, has dropped to 40 - 42 million VND/m2 at the present time. Similarly, Hoai Duc land has also dropped to 53 million VND/m2, Ha Dong land has dropped to 86 million VND/m2, Thanh Tri land has also dropped in price when it is commonly sold at 43 million VND, Dong Anh land is at 40 million VND/m2. The declining numbers of the land segment clearly reflect the current recession of the Vietnamese real estate market.

Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn said that the current difficulties of the real estate market are due to the fact that buyers are holding on to their money and waiting for real estate prices to fall further. In addition, a significant number of investors still have a negative view of the real estate market. In addition, investors are also affected by difficulties in credit limits and loan interest rates that have not been completely resolved. Especially, since the third quarter of 2022, the Government's control of credit in real estate, difficulties in issuing bonds, and a series of other unfavorable developments have caused the land market in particular and the real estate market in general to decline.

Real estate market 2023 is not optimistic

For the current market, most experts believe that the difficult period has passed and more positive signals are appearing. However, it will be difficult for the real estate market to be vibrant at this time. Because the recent macroeconomic factors must have a certain delay and the real estate market needs to recover step by step. Therefore, the real estate market in 2023 in the second half of the year will still be flat, without many highlights. If the capital flow from banks is disbursed well, it will take 2 more quarters, most recently in the second quarter of 2024, to stabilize.

Responding to reporters, Dr. Nguyen Van Khoi - Chairman of the Vietnam Real Estate Association predicted that the real estate market in 2023 will remain sluggish, and can only recover, develop more healthily, more transparently and more standardizedly from the second or third quarter of 2024, thanks to advances in the legal environment; positive economic growth prospects; synchronous and modern infrastructure development; digital transformation trends; diversity of financial resources...

At this time, real estate enterprises need to continue to proactively review and restructure their businesses, investment portfolios, and investment product structures to ensure that they are consistent with their financial capacity, scale, and management capabilities and with the real needs of society. Avoid imbalances in segments and prices.

In the long term, real estate experts are still optimistic that real estate is still the best place for cash flow. Currently, in the context of low liquidity, many people are forced to reduce prices by 15-30% to sell their goods, which is an opportunity for investors with strong financial potential to "buy the bottom". There are still many "shark" investors waiting for the opportunity to put money down.

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