The apartment "fever" has just ended, now it's the turn of suburban land prices to increase

Mr. Tran Tuan Nam, a real estate broker in Hanoi, said that land in urban areas as well as residential land on the outskirts of Hanoi are showing clear signs of increasing in price.

For example, many plots of land around Van Canh and Kim Chung (Hoai Duc district) were previously sold for about 100 million VND/m2, but now the price has increased to 110 million VND/m2, and in some places, even 120 million VND/m2.

Or a plot of land in Dong Anh with an area of ​​102 square meters located on a 5-meter wide street is being offered for sale at 6.5 billion VND, equivalent to nearly 64 million VND/square meter. According to Mr. Nam, this price has increased by nearly 1 billion VND compared to the end of 2023. Currently, many people have expressed interest in buying it for 6.2 billion VND, but the landowner has not sold it yet.

“Land prices in the suburbs are increasing, so many landowners say they will only agree if the price is right,” said Mr. Nam.

A survey by PropertyGuru Vietnam also shows that land prices in the Hoai Duc area in business locations and two-car bypass roads in Kim Chung commune are at VND83-95 million/m2, up from VND80-90 million/m2 at the end of last year.

Similarly, land for two cars to pass each other in An Thuong, Di Trach, La Phu is at 63-80 million VND/m2, a slight increase of 3 million VND/m2.

Meanwhile, in Gia Lam district, land in Da Ton and Kieu Ky near Vinhomes Ocean Park is offered for sale at 45-52 million VND/m2, an increase of 2-3 million VND/m2 compared to the end of last year. Land on Co Bi business street is at 85-95 million VND/m2, instead of 80-90 million VND/m2 before Tet.

Land in Dan Phuong district also recorded an increase in price when the location on Tan Lap street was advertised for sale at 50-58 million VND/m2, a slight increase of about 3% compared to many previous months. Service land in Tan Tay Do area, the advertised price was also set at 85-95 million VND/m2 instead of 80-90 million VND/m2 at the end of last year.

Will not increase "shock"

According to Dr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), recently, in many suburban areas, land plots have become "hot" again.

Since then, many investors have appeared to "hunt" for land in localities with strong infrastructure development and high urbanization rates. Many areas have recorded a "sudden" increase in land transactions, especially for subdivided plots.

“The market has recorded some areas with the phenomenon of “unfounded price increases”. We need to pay close attention to avoid the formation of “virtual” fevers, which pose a risk of insecurity, when the market is still in the process of recovery,” Mr. Dinh warned.

Sharing the same view, Mr. Dinh Minh Tuan - Director of Property Guru Vietnam - commented that the number of investors with money available to buy land is increasing. When demand increases more clearly, prices will increase. Many brokerage firms have also confirmed that land prices have been adjusted since March this year.

Mr. Tuan explained that the early recovery of the land market was driven by two factors: the "wave" of anticipating changes in new laws that will take effect from 2025 and the saturation of other investment channels.

The Law on Real Estate Business (amended) and the Law on Housing (amended) will affect the land market quite a lot from 2024 onwards. Tightening regulations on land subdivision are a hot spot, it is forecasted that the supply of subdivided land will decrease sharply after 2025, but the demand for land is unlikely to decrease in the long term because Vietnamese people still favor this type.

When supply is low and demand is high, land prices will increase. Many investors who want to capture this trend will start hunting for land before the new law is applied.

Besides, the real estate market currently does not have many products to invest in. The apartment segment is "stuck" with new projects due to unfinished legal procedures, private houses and townhouses are not diverse, and the selling price is high. Meanwhile, land is an easy-to-buy product, easy to transfer, has a certificate and keeps the asset stable, safe, has good profitability and most importantly, the price is still very "soft" compared to 2-3 years ago.

Land is also a type that any member of the market can invest in due to the diversity of area, price, and region.

However, Mr. Dinh Minh Tuan also emphasized that not all land products can increase in price and be accepted by the market.

"Only products with clear legal advantages, good locations, close to infrastructure or industrial parks, and exploiting commercial value will be sought after by buyers and may increase in price in the future. However, the price increase of land will hardly be as strong as the peak period and it is unlikely that there will be a "shocking" increase like what happened a few years ago," Mr. Tuan commented.