Investors are sweating over the rising land prices in Hanoi.

Many real estate investors in Hanoi are remaining inactive, witnessing the chaotic and artificial price surge in the land segment.

The market has cooled down, but prices are still rising.

“Real estate prices in Hanoi are soaring. Land around the Ring Road 4 has increased by at least 20% compared to the Lunar New Year period. If you're buying land or a house now, and the owner asks for 10 dong, I'll only offer 6 dong and then negotiate further. The current prices are very inflated and don't reflect the true value of the property,” Mr. Ngo Xuan Chuc, Director of a real estate transaction center in Hanoi, shared with a reporter from Dau Tu Newspaper.

This source stated that land prices are being artificially inflated, mainly through word-of-mouth from sellers, yet transaction volumes were not particularly active in the second quarter of 2024. Furthermore, the continuous record-breaking price increases have caused many customers to feel apprehensive and hesitant to invest.

"Although the actual transaction volume is not high, sellers are constantly raising prices to gauge the market. The frenzy in the first quarter of 2024 has now cooled down, and the enthusiasm from the buyers has also decreased," Mr. Chuc commented.

The regulation on annual land price tables in the 2024 Land Law is the most frequently used reason by sellers to raise real estate prices.

Similarly, Ms. Dinh Huong, an experienced investor who knows how to take advantage of market cycles to "surf the market," also expressed caution in the current market context.

“Real estate prices in Hanoi are rising across all segments. From my observation, the current transaction volume is only on par with the period after the Lunar New Year, but prices are continuously increasing. This makes me and many of my friends in the real estate investment community hesitant to invest,” Ms. Huong said.

As evidence, this investor stated that land prices in the Ha Dong district increased by 15-20% compared to the first quarter of 2024. This increase occurred in most areas, from bustling places like Van Quan ward to locations further from the city center like Yen Nghia ward.

“In Ha Dong district, a 50 m2 plot of land with a major road running through it, located right next to Ring Road 4, was offered for sale at 3.5 billion VND before Tet, but now the price has increased to 7 billion VND. The situation of real estate prices doubling in just half a year is no longer unusual in areas around Ring Road 4,” Ms. Huong said.

Members of a "land-hunting" group, currently holding numerous plots of land worth up to 300 billion VND in Dong Anh district, revealed that even before last year's Lunar New Year, speculative groups had bought up a series of land plots in Xuan Canh and Co Loa. Currently, plots with prime locations in these areas have reached 200 million VND/m2.

According to this source, the group began buying up numerous plots of land in 2023 at prices approximately three times lower than the current market value. Many of these were foreclosed properties from banks, hence the significantly lower prices compared to market value.

When discussing the current land price trends, members of this speculative group also admitted that prices are being pushed up excessively. The prices quoted by sellers reflect future expectations, rather than the actual value of the property in the present.

Investors need to keep a cool head.

Real estate businesses generally agree that the regulation on annual land price tables in the 2024 Land Law is the most frequently used reason by sellers to raise property prices.

Previously, compensation prices were based on land price frameworks issued by the government every five years. This time gap created a significant discrepancy between compensation prices and actual transaction prices. However, under the new law, land will be valued according to market principles; therefore, when businesses implement projects, the cost of land compensation and clearance will increase compared to before. To ensure profitability, investors are forced to increase the selling price of their products to end users.

"As apartment, shophouse, and villa prices rise, the land-based real estate segment cannot remain unaffected. Although the annual land price list will only be applied in 2026, brokers are already using this reason to push selling prices higher," Ms. Huong analyzed.

This investor added that, given that the three laws related to real estate – the Land Law 2024, the Housing Law 2023, and the Real Estate Business Law 2023 – only came into effect on August 1st, investors do not yet have much basis to commit to large-scale transactions.

Sharing the same view, Mr. Ngo Xuan Chuc also suggested that investors should remain calm and avoid being swayed by FOMO (fear of missing out) in the market. If possible, buyers can wait until the end of the year to better assess the impacts of the three new laws before making a final decision.

According to a survey by Batdongsan.vn on the real estate market in the second quarter of 2024, searches for land for sale in Hanoi (land plots, residential land) increased by 118% in the first six months of the year compared to the same period in 2023.

Despite noting a positive recovery in buyer sentiment, experts from this online news site say that the market is unlikely to experience significant fluctuations in the next quarter. This is because buyers still want to see further impacts from monetary policy and deposit interest rates are on the rise again.

This sentiment is clearly reflected in the results of a survey of 325 real estate brokers regarding land transactions in the second quarter of 2024. According to the survey, 35% of brokers stated that transaction volume remained stable; 29% believed that transaction volume was decreasing.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com, believes that this exploratory phase will last from now until the end of the fourth quarter of 2024 and conclude in early 2025. Only when the market enters a stable phase can all types of real estate fully recover. This phase is predicted to occur as early as the first quarter of 2026.

Source: https://baodautu.vn/batdongsan/nha-dau-tu-toat-mo-hoi-vi-gia-dat-nen-ha-noi-d222125.html