Land market welcomes recovery wave in last months of year

Positive signals are gradually appearing

After a difficult period, the Vietnamese real estate market began to show many positive signs from the third quarter of 2023. Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), said that the real estate market is showing signs of recovery, and investor confidence is gradually increasing.

Statistics from VARS show that transactions are showing signs of recovery, with the total number of real estate transactions in the market reaching nearly 3,000 in the first quarter, nearly 4,000 in the second quarter, and approximately 6,000 in the third quarter. The increasing numbers each quarter indicate a more positive picture of market recovery.

The land market in the riverside area recovered in the last months of the year (Figure 1). — Land plots in areas surrounding industrial zones are attracting investor interest.

Although the trading volume is lower than before (reaching 50,000 transactions per quarter), according to Mr. Dinh, it also reflects the market's efforts to improve, with each subsequent quarter showing an increase compared to the previous one.

Notably, land with red books and commercial housing from 2 - 3 billion VND had a clear increase in transaction volume in the third quarter of 2023, especially in areas with infrastructure investment or areas adjacent to industrial parks with selling prices increasing by 5-7% compared to the previous quarter.

Mr. Le Bao Long, Director of Strategy at Batdongsan.com.vn, stated that "Currently, land plots in many areas have prices that are accessible to the majority of investors. Therefore, those with idle funds who buy land plots at this time and price range have the opportunity to make good profits in the medium and long term."

Furthermore, the land plot segment is showing signs of bottoming out, particularly in the auctioned land category in areas surrounding Hanoi. Specifically, plots priced around 2-3 billion VND achieved an absorption rate of 70-80%, with auction prices approximately 5% higher than the starting price. These plots can be resold immediately with a profit margin of 30-50 million VND per plot. This trend is most evident in provinces such as Bac Giang and Hung Yen, etc.

In fact, information from the Market Research Task Force of the Vietnam Association of Real Estate Brokers (VARS) indicates that many investors have begun "hunting" for land in suburban areas of major cities. These are localities with strong infrastructure development and high urbanization rates, with prices considered quite "bargain" and significant potential for future growth. Explaining this situation, Mr. Nguyen Van Dinh said that in the context of a gradually recovering market, the land plot segment will attract more investor attention, especially land plots in some markets with bright growth prospects such as Bac Ninh, Hai Phong, and Quang Ninh - localities with well-invested infrastructure and stable economies .

Reporters' observations also show that demand for land plots is starting to increase in some localities along the Ring Road 4 - Capital Region currently under construction, such as Hung Yen, Bac Giang, Bac Ninh ... Although demand has not yet truly exploded, the return of buyers to provincial land plots is expected to help this segment recover sooner than predicted.

Besides the above factors, the real estate market has also seen more positive developments thanks to the determination of the Government and ministries, departments, and localities in removing difficulties for businesses and projects. In particular, the acceleration of public investment has been and is driving up the demand for land transactions along major roads.

Recently, the Government issued Decree 35/2023/ND-CP amending and supplementing several articles of decrees under the state management of the Ministry of Construction. Notably, Decree 35/2023 allows provincial People's Committees to decide on areas permitted for land subdivision and sale when in accordance with relevant legal regulations, without having to seek the opinion of the Ministry of Construction. As a result, a number of localities have "unleashed" the process of land subdivision for people in need.

High expectations for the markets surrounding Hanoi in the fourth quarter.

Forecasting the real estate market in the coming period, VARS believes that the market recovery process will certainly continue to differentiate by segment and region due to varying absorption capacities, especially in provinces and cities that hold advantages in land resources, planning, infrastructure, and investment policies such as Bac Giang, Bac Ninh, Hung Yen, etc.

The land market in the riverside area recovered in the last months of the year (Figure 2). — Land plot projects in the Dong Yen area, Bac Ninh province, are attracting the attention of investors.

Experts believe that investor confidence is increasing again, and cheap cash flow in the coming time can be poured into land. Quality products that meet standards and bring efficiency to investors will be selected. Investors will pay attention to finding places with developed infrastructure, stable economy, and guaranteed profit standards. In particular, land around industrial parks is considered to have potential and attract investors.

In Bac Giang, the Yen Dung area has seen active auctions with 500 applications for 50 land plots. Since the beginning of the year, there have been 18 auctions involving a total of 374 land plots. Most of the auctioned properties have the advantage of being located in convenient locations near the Yen Lu Industrial Park, where factories have already been built and are nearing completion.

For the Bac Ninh market, with its abundant potential in transportation infrastructure, industry, services, and well-planned provincial development, real estate – especially land plots in areas designated as cities – is attracting investors and reaching prices of 25-30 million VND/m2. For example, land plots in areas like Thuan Thanh or Dong Yen, measuring 100m2, are being purchased by investors for 2.5 billion VND. With the decisive implementation of key projects, Bac Ninh province is expected to create a boost for the real estate market to recover and grow again in the near future.

According to Batdongsan.com.vn, the three markets of Bac Ninh, Bac Giang, and Hung Yen are currently showing potential, leading the warming trend of the real estate market due to their proximity to Hanoi, well-planned infrastructure, and the strong development and formation of industrial zones. In these three markets, land prices near industrial zones have the potential to increase from 25 million VND/m2 to over 30 million VND/m2, a trend even more evident in land projects located just 5-10 minutes from industrial zones with large factories.

In a recent seminar, Dr. Can Van Luc suggested that the end of the year is a good time to invest, however, investors should note that they should choose projects located near industrial parks in key economic regions, considering natural conditions, the connected transportation system, and the sectors that the industrial park attracts investment in. Projects located near residential areas increase the occupancy rate and lead to higher potential for price appreciation.

Furthermore, when making a choice, investors need to consider legal issues and whether the location offers convenient access to industrial zones, as this will help increase the liquidity of the land plot.

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