Hanoi real estate prices are too high, investors "hold" money to buy land in the province

Mr. Ngo Quang Phuc, a real estate investor in Hanoi, said that after many unsuccessful attempts to find opportunities to invest in land in the suburbs of Hanoi, at the end of March, he decided to buy a plot of land with an area of ​​80 square meters in Hung Yen at a price of 22 million VND/square meter.

According to Mr. Phuc, after many days of "land hunting", he realized that with an amount of about 1.5 billion VND, it would be very difficult to find plots of land with beautiful locations in the suburbs of Hanoi. Meanwhile, if he went to Hung Yen to buy land, he would have many options in beautiful areas, with wide roads, high potential for price increase because the land price here is still quite cheap.

However, Mr. Phuc affirmed: "When bringing money to the province to buy land, you need to determine long-term investment, it is very difficult to be able to surf like in big cities. Therefore, those who use financial leverage need to consider carefully when buying land in the province."

Similarly, Ms. Nguyen My Hanh, an investor in Hanoi, also shared that real estate prices in Hanoi are currently too high, investing requires a large amount of capital and must accept risks, making it difficult to achieve high profit margins. Therefore, Ms. Hanh and her investment group decided to buy in localities with convenient infrastructure and transportation.

Specifically, early last April, she bought 2 plots of land in Tuyen Quang, each plot is 100 m2, priced at 12 million VND/m2.

"Although land fever is unlikely to occur in the provinces and investment profits are unlikely to be exceptionally high, the total investment capital is small, only 1.2 billion/plot. This is definitely a good channel to keep money at this time because land prices in the localities are still cheap, and the possibility of doubling in the next 5-10 years is completely possible," said Ms. Hanh.

Mr. Le Van Long, a broker in Hanoi, said that since the beginning of 2024, in addition to investors looking for opportunities in the suburbs of Hanoi, many people have flocked to the provinces of Hung Yen, Bac Ninh, Bac Giang, Hoa Binh, Tuyen Quang... to find opportunities to invest in the land segment, waiting for a new price increase.

Mr. Long said that unlike investing in big cities that require several billion VND or more, when returning to the provinces, the capital investment is only from several hundred million VND to be able to buy land or with a slightly higher amount, you can choose beautiful locations, convenient transportation, and densely populated residential areas.

In February and March, Mr. Long's office closed dozens of land transactions in Hoa Binh with prices ranging from 500 to billion VND/plot.

Experts say that although the real estate market has not yet become active again, land in the provinces is still the “favorite dish” that investors are most interested in. Because this segment has the characteristics of easy investment and high profit potential.

Research on real estate consumer psychology (CSS) by the batdongsan website in the first half of 2024 showed that, out of 1,000 survey participants, 65% said they would continue to buy real estate in 2024. Of these, about 1/3 were interested in land.

Of which, land products with prices under 2 billion VND/plot attracted the most interest, accounting for 42%; prices of 2 - 4 billion VND ranked second with 24% of interest; the price range of 4 - 6 billion VND accounted for 10%. The remaining two price ranges of 6 - 10 billion VND and over 15 billion VND respectively had interest levels of 9% and 15%.

Mr. Nguyen Tho Tuyen, Chairman of the Board of Directors of BHS Real Estate Joint Stock Company (BHS Group), said that if investors buy real estate in Hanoi now, they will suffer losses because the price will continue to increase as soon as they sell. Therefore, they have to disburse cash flow into real estate in cheaper areas.

One of the good choices is land products, land auctions in the provinces will also be very good because they are located in the center, ensuring legality. Especially in the past 2 years, the provinces have almost no successful auctions and according to the principle of the next auctions, the price will decrease. Therefore, the land price in the auction in the provinces is also very suitable.

"I think that after the fever of Hanoi real estate, it will sooner or later spread to other provinces. It could be auctioned land products or land products located in the center of the provinces," Mr. Tuyen predicted.

According to Mr. Dinh Minh Tuan, Director of PropertyGuru Vietnam in the Southern region, the attractiveness of the "king investment channel" of land has returned and the segment under 2 billion is receiving the most attention. From the end of 2023 to the beginning of this year, the market has seen more and more "shark" investment groups hunting for land in large quantities.

“Tightening regulations on land subdivision are a hot spot. It is predicted 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 of land.

When supply is low and demand is high, land prices will increase. Many investors want to capture this trend, so they have started to actively search for land before the new law is applied," said Mr. Tuan.