Real estate prices are increasing for no reason in some places, avoid getting caught up in the "virtual fever"

Land and low-rise segment transactions increased

At the "Announcement of Vietnam real estate market report in the first quarter of 2024 and market forecast in the second quarter of 2024" organized by the Vietnam Association of Realtors (VARS) on the afternoon of April 15, Ms. Pham Thi Mien, Deputy Head of Market Research and Investment Consulting and Promotion Department of VARS, said that land and residential land are the segments with the most positive movements.

However, according to Ms. Mien, the above trend is not happening evenly in all localities. The Northern region is showing more positive signs than the Central and Southern regions. In particular, Hai Phong, Hanoi, Bac Giang, Hai Duong, Da Nang, Binh Duong, Long An, Dong Nai, and Can Tho are bright spots.

In the first quarter of 2024, the real estate market recorded a total of 6,360 transactions, an increase of 10% compared to the fourth quarter of 2023 and double the same period last year. Particularly for the low-rise segment, land plots had a total transaction volume of up to 2,500 transactions, 3 times higher than the same period in 2023. Of which, completely new projects achieved an absorption rate of up to 51%," Ms. Mien informed.

According to a representative of VARS, bank interest rates continue to remain stable at a low level; maturing cash flows at banks are beginning to seek investment channels that bring more attractive profits, including real estate, especially land products with not too high investment value and great profit potential.

Although she believes that the market recovery will continue to develop in a positive direction, Ms. Mien believes that the upcoming recovery results will still be differentiated by segment and region as in the first quarter.

Be careful, avoid getting caught up in "virtual fever"

Meanwhile, Mr. Le Dinh Chung, General Director of SGO Homes Real Estate Investment and Development Joint Stock Company, said that many investors have begun the process of "hunting" for land in the suburbs of big cities, localities with strong infrastructure development and high urbanization rates.

Regarding prices, Mr. Chung said that for plots of land priced under VND2 billion in the suburbs, with legal guarantees and available infrastructure, prices have increased by up to 40%. Meanwhile, the low-rise segment priced under VND10 billion, serving residential needs, only recorded a price increase of about 3%. Meanwhile, for apartments priced under VND3 billion, the increase is about 5-10%.

VARS's report shows that the successful transaction price of land has decreased by 20-30% compared to the peak of the "fever". Currently, the selling price has stabilized and there are no signs of decrease. Compared to the fourth quarter of 2023, land prices have increased by about 5%. Particularly in the market on the outskirts of Hanoi and associated with industrial parks, prices have increased by 10-20%.

Mr. Chung warned that the market in some places is experiencing unfounded price increases. Therefore, investors need to be careful to avoid being caught up in “virtual fever”, especially when the market is just in the recovery phase.

Along with land, according to Mr. Chung, the residential land segment is also receiving attention from investors in products serving housing needs, with prices ranging from 3-5 billion VND in the city center and around 2 billion VND in the suburbs.

“Residential land prices are currently increasing by 5-10% compared to the fourth quarter of 2023. Particularly in the suburbs of Hanoi, places associated with industrial parks, the increase is about 10-20%,” said Mr. Chung.

Mr. Nguyen Van Dinh, Chairman of VARS, further assessed that in the first months of the year, the market recorded a phenomenon of local increases in prices of apartments, land, and residential land in some areas.

Mr. Dinh commented that in the context of the economy not really escaping difficulties, only showing signs of recovery, people's income and employment are not stable, but the sharp increase in prices is unusual, a sign of a bubble.

“The sudden and unfounded price increase is considered to have signs of impact, creating confusing information from speculative groups pushing up prices and inflating prices for profit. Therefore, buyers and real estate investors need to be alert, choosing products that are suitable for their financial capacity and legal guarantee. Absolutely do not follow the “fever” or the crowd movement.

In order not to affect the market recovery process, investors also need to adjust selling prices to a reasonable level and strictly control distribution channels," Mr. Dinh noted.