Having saved 1 billion VND, should I put it in a savings account or invest in land?

With 1 billion VND in cash available, Ms. Thu Ha in Hanoi believes that depositing the money in a bank to earn interest is a fairly safe option. However, after reviewing the interest rates for various terms at many banks, Ms. Ha found them too low. For a temporary deposit of 1-2 months, the interest rate is only about 1.7-4.3%; for longer terms (over 6 months), the highest rate is only about 5.3%.

While buying a plot of land in the suburbs and holding onto it might have the potential to become a more valuable asset later, she lacks experience in buying land. Is now the right time to buy, and if so, what kind of land should she choose?

Responding to Ms. Ha's concerns, Mr. Le Dinh Chung, General Director of SGO Homes Investment and Real Estate Development Joint Stock Company, shared with VietNamNet reporters that at this time, investors with available funds can buy land in provinces surrounding Hanoi at a "loss-cutting" price, and the opportunity for future price increases remains very good.

Mr. Chung explained that buying land in the provinces at this time, if you intend to invest for the long term or at least 2-3 years, you can expect an average return of about 10% per year.

According to experts, investing in land plots at this time requires waiting to benefit from price increases in 2025-2026. (Photo: N. Le)

However, according to SGO Homes' leadership, it's necessary to recognize that in the short term (the next 1-2 years), liquidity will be slow and will require time to recover.

"If investors decide to invest in land in the provinces, they need to choose carefully. For example, they should choose properties in the central area of ​​the province or town; near industrial zones, with infrastructure that meets housing needs... only then will they have good liquidity and appreciation potential in the future. They should not choose properties that are too far from residential areas, lack integrated infrastructure, and have no amenities," Mr. Chung noted.

Meanwhile, real estate expert Tran Khanh Quang assesses that land plots are the segment experiencing the biggest price drop in the real estate market.

Mr. Quang cited examples: land prices in Long An have decreased by about 20%, in Dong Nai by over 25%; in Ba Ria - Vung Tau by over 30%, and in Lam Dong by 30-40%. Further afield, areas like Binh Phuoc, Dak Nong, and Dak Lak have seen price drops of up to 50%.

However, according to the expert, land prices have been inflated the most in recent years; in some places, they have increased by as much as 50%. Therefore, when the real estate market is difficult, land prices fall very quickly and gradually return to their original value.

Regarding the question of whether one should deposit 1 billion VND in a savings account or invest in land in suburban areas, Mr. Quang stated that with 1 billion VND, a bank savings account like in 2022 could yield an interest rate of 7-8%; however, with current interest rates, the return would only be 3-4%.

"If investors have the money and want to buy real estate for development, they should buy apartments or townhouses; but if they are buying for investment, they should choose land plots. Especially when the market is experiencing a sharp decline, it will be easier to buy products at the best prices," Mr. Quang analyzed.

Suggesting several areas to consider, Mr. Quang suggested land plots in Long An, Dong Nai , and Binh Duong... Among them, Long An is a good option because, according to his observations, land prices in Long An have experienced the lowest rate of decline in recent years and are suitable for investors with 1 billion VND available. This area offers stable land prices and is more preferred than other regions.

"In Dong Nai, the area has fairly good infrastructure, but land prices are higher than in other areas. Similarly, in Binh Duong, the population density is increasing due to the concentration of many industrial zones, but land availability is less than in other areas. Land prices in Binh Phuoc are very cheap, but prices near Ho Chi Minh City are very expensive."

However, the rate of price increase varies from region to region. Areas with many projects tend to see faster land price increases, such as in Dong Nai. Therefore, the choice of which region to invest in depends on the preferences of each investor,” Mr. Quang analyzed.

Commenting on the future of the land plot segment, the expert said that land plots are the segment that can increase in price the fastest and also decrease in price the fastest, which can confuse new investors entering the market.

"In 2024, the land market will not recover; the earliest it will be in the fourth quarter of 2024. Therefore, whether or not to invest in land now is a personal choice. In my opinion, land will recover after townhouses, apartments, commercial real estate, etc. Therefore, investors should wait if they want to invest."

However, compared to other real estate segments, land plots are the safest investment product. Therefore, when prices fall sharply, there will be good deals. Currently, it is a buyer's market, so buyers have the right to choose to invest in land plots and should wait to benefit from price increases in 2025-2026,” Mr. Quang said.

According to expert Tran Khanh Quang, nowadays, investing in any real estate product requires waiting 1-3 years, and it's no longer possible to "speculate" for a few months like before.

Importantly, when buying land, it's crucial to pay attention to legal aspects, ensuring there's a clear land title ("red book") or project approval, as well as good infrastructure connectivity. Simultaneously, investors need to have a thorough understanding of the area they intend to buy land in, knowing the actual selling price and the advertised prices on real estate websites before making a choice.

The latest report from the Ministry of Construction shows that land transactions experienced positive growth in the second half of 2023. Specifically, in the fourth quarter of 2023, there were approximately 81,476 successful land transactions nationwide, and the cumulative number of land transactions in the last six months of 2023 increased by 28.4% compared to the first half of the year.

Resort properties are currently experiencing price drops and receiving ownership certificates – is it a good investment? Resort properties are seeing "loss-cutting" prices of 10-40%, with some areas seeing reductions of up to 50%, yet still struggle to sell. This segment is expected to recover more slowly; should those with ample funds invest?

Source: https://vietnamnet.vn/co-1-ty-dong-trong-tay-muon-dau-tu-nen-chon-dat-nen-2240333.html