With money readily available, should you invest in an apartment or land at the end of the year?

With 4 billion VND in hand, Mr. Quoc Dung in Hanoi is wondering whether he should buy land on the outskirts of Hanoi or buy an apartment and rent it out to have a steady monthly income?

Instead of saving money in a bank, Mr. Quoc Dung (Dong Da, Hanoi) wants to invest in real estate at the end of the year. Land plots and apartments are the two segments he is targeting.

With the mindset that "buying land is never a loss" - land prices always tend to increase over time - Mr. Dung planned to invest in a plot of land in a province bordering Hanoi. But with the 4 billion VND he had available, he calculated that he could also buy an apartment and rent it out monthly.

"I'm not sure whether to invest in land or buy an apartment. Which option is both safe, profitable, and has minimal risk?", Mr. Dung wondered.

Speaking to VietNamNet reporters, Mr. Le Dinh Chung, General Director of SGO Homes Investment and Real Estate Development Joint Stock Company, analyzed that in Hanoi, if you invest in apartments for rent, the demand is high and it's easy to rent them out. However, at this time, investing in apartments will no longer be profitable in terms of capital cost.

Mr. Chung's reason is that apartment prices are nearing their peak, making it difficult to appreciate in value. With apartment purchase prices rising, rental yields are no longer very attractive. In fact, the rental yield for apartments in Hanoi only fluctuates around 3-4%.

Investors are wondering whether to invest in land plots or apartments at the end of the year. Photo: Hoang Ha

Therefore, according to Mr. Chung, land plots remain a highly sought-after investment channel, as the supply of this product will be limited in the future due to regulations restricting land subdivision and sale. Furthermore, land plots are an investment segment with a wide range of budgets, suitable for many people.

"With the rapid pace of urbanization, demand in localities will be high, so investing in land plots for capital appreciation remains a good and safe option. With 3-4 billion VND, you can invest in land plots around Hanoi, in economic hubs connected to industrial zones such as Bac Ninh, Bac Giang, Hung Yen, Hai Duong, Hai Phong, and Quang Ninh... These are areas currently attracting a lot of investor interest," Mr. Chung suggested.

However, the General Director of SGO Homes also noted that when buying land plots, investors need to pay attention to projects that meet legal requirements, at a minimum, having signed a sales contract or a land title certificate. At the same time, they need to consider the developer's capacity; and choose locations that meet demand and attract residents in the future.

Speaking to VietNamNet, Mr. Pham Duc Toan, General Director of EZ Property, noted that currently, investing in apartments or land plots in major cities like Hanoi or Ho Chi Minh City is neither attractive nor effective. The reason is that prices have remained high, but liquidity has decreased.

"Apartment prices are beyond the affordability of many people who want to buy one to live in. Previously, 2.5-3 billion VND could buy an apartment, but now it takes 4-5 billion VND. The price of apartments purchased for investment has doubled, while rental prices haven't increased much, so investment returns have decreased. Land prices have also risen along with apartments. A 30m2 house in an alley, built 3-4 stories high, that used to cost 3 billion VND now costs 5-7 billion VND, depending on the location," Mr. Toan said.

He added that many investors are tending to shift capital from major cities like Hanoi and Ho Chi Minh City to other areas such as Hai Phong, Binh Duong, Dong Nai , and Ba Ria - Vung Tau...

With average apartment prices in Hanoi at 60 million VND/m2, will they continue to rise or fall? The apartment price index in Hanoi increased by 64% in Q3 2024 compared to Q2 2019, double the increase in Ho Chi Minh City. The average primary market selling price is approaching 60 million VND/m2. What will Hanoi apartment prices be like in the future?

Source: https://vietnamnet.vn/san-tien-cuoi-nam-nen-dau-tu-chung-cu-hay-dat-nen-2351798.html