Real estate "bottom fishing" is underway

In the context of rapidly decreasing interest rates, the Government, together with ministries and localities, have resolutely implemented solutions to stimulate and support the economy , helping the real estate market avoid falling into a "frozen" scenario, restoring the confidence of businesses and investors in the market...

Trading is back

According to DKRA Group's May 2023 survey, the new supply of land and suburban land in the month reached the highest level in the past 5 months, increasing 2.1 times compared to the previous month, although it decreased by 36% compared to the same period last year. DKRA Group's May report also shows that the land segment is showing clearer signs of recovery than other real estate products, such as apartments.

Mr. Bui Cong Bang - a broker in Ta Dung area, Quang Khe town, Dak Glong district, Dak Nong province - said that after a year of stagnation, the price of many plots of land with beautiful views in this area has dropped by 50% - 60%, so recently many people from all over have been interested in "buying the bottom". Even many people who already have land do not sell at a loss but are looking to buy more because they think the current price is too cheap. Those who could not buy before because of the high price are also looking for an opportunity to "put down money". "I have just finished notarizing a contract for a couple in Hanoi to buy a plot of land of nearly 10 hectares for only 4 billion VND in village 2, Quang Khe town. The owner previously offered this land for 10-11 billion VND, but because of bank debt, he asked to sell it at all costs. The land is located on the asphalt road, overlooking the valley, with beautiful clouds every morning, so customers from Hanoi who see it immediately make a deposit" - Mr. Bang shared.

Ms. Hong (HCMC) bought 2 plots of land in the Ta Dung Lake area, but when she saw the land with a durian garden, next to a stream with an area of nearly 2 hectares, the owner was selling it for only 2 billion VND, she decided to buy it. However, on the day of the deposit, the landowner demanded to increase the price to 2.3 billion VND with the reason that he had already arranged the money to pay off the bank loan so he would not sell anymore or would only sell at a higher price. Because the landowner increased the price unreasonably, Ms. Hong went to look for another plot of land but did not find any satisfactory plot.

Meanwhile, Mr. Hoang Thanh (residing in District 7, Ho Chi Minh City) has just decided to deposit to buy 3 plots of land (each plot is 1,000 m2) in the area near Muong Man station, Binh Thuan province. According to Mr. Thanh, these 3 plots of land have been legally divided, have reasonable prices, are near the lake, have a dragon fruit garden and are only 10 km from Phan Thiet city. "With a price of 500 million VND/plot of land, I believe it can increase to 700-800 million VND after a few months or at most 1 year, which is too profitable compared to other investment channels, so I do not hesitate to buy it right away" - Mr. Thanh expected.

According to a survey by reporters of the Lao Dong Newspaper, the market for garden land and resort land in some areas of Lam Dong province such as Bao Loc, Lam Ha, Duc Trong and some other Central Highlands provinces are attracting investors again.

A hilly land area in Ta Dung Lake, Dak Nong province is being sold at a "loss"

Opportunity for the money holder

Mr. Ta Trung Kien, Deputy General Director of Wowhome Real Estate JSC, said that the current time is considered an opportunity for those who want to buy garden land for investment or as a resort. Because the price of garden land has now dropped significantly compared to the peak 2 years ago, sellers are "cutting losses" a lot, so buyers can easily choose the product they like at the best price.

However, according to this broker, a disadvantage for the suburban land market, as well as the real estate market in general, is that the cash flow is not really strong, and it is difficult to borrow money to invest in real estate. Therefore, people who want to buy garden land only decide to "put money down" when they find a piece of land with a really reasonable price - that is, deeply discounted, clear legal status - then come to factors such as distance, favorable geographical location, etc. The average area and price of real estate that attracts buyers today, according to Mr. Kien, is about 1-3 hectares, with a selling price of about 3-4 billion VND.

From an expert perspective, Dr. Le Dat Chi, Head of the Faculty of Finance - Enterprise, Ho Chi Minh City University of Economics, said that in the past, after every 2-3 years of difficulty and stagnation, the real estate market would recover. "Banks consider this a period to handle bad debt assets (if any), and businesses and individuals after mortgaging real estate are forced to close the sale "cut loss" and cannot hold on forever. Therefore, the price after "cut loss" can certainly increase by 20% - 30%..." - Dr. Le Dat Chi analyzed.

According to this expert, another factor that promotes the recovery of the real estate market is when investors make profits from stock investments, often shifting capital flows to accumulate real estate because these two cash flow channels are interconnected. However, this year's cycle is a bit different in that the difficulties may last longer or the cash flow shift may be lighter or less because businesses as well as the domestic and foreign economies are still facing difficulties, and cash flow is blocked in some businesses. "In my opinion, the market still needs to be further purified, so the real estate wave may be about 1-2 quarters slower than the stock wave. However, at present, when the market trend is not clear and has not been established, it can also be seen as an opportunity for investors with strong finances to participate in the market. Because at this stage, real estate buyers will be proactive, if they jump in when the market increases, they will face high risks" - Dr. Le Dat Chi acknowledged.

According to DKRA Group, the area around Ho Chi Minh City or neighboring localities such as Dong Nai, Binh Duong, Tay Ninh are having a series of public investment projects, major roads are being implemented, especially the Ring Road 3 which was just started last weekend, has contributed to stimulating the real estate market in these places to recover. Experts and real estate brokers believe that real estate around the new roads will attract investors and soon increase in price again.

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