Real estate transactions are gloomy in the district about to become a city

Amid the real estate fever at the end of 2020, Ms. Thuy, residing in Tan Duong commune, Thuy Nguyen district, stopped working at a garment factory to switch to being a broker, specializing in project land and resettlement. Since the beginning of this year, the general market has been difficult, causing the number of transactions of this broker to drop sharply. She said that if there are 10 interested customers, 8 of them ask for land at a loss. Even though she introduces a few lots at a real discount, her customers "consider for a long time and often do not close the deal".

This situation is in contrast to nearly two years ago, when Thuy Nguyen real estate was at its peak, after information about the planning of the North Cam River Urban Area and the district was proposed to become a city. She said that she joined the market when it was bustling, closing several transactions in a month, so she decided to quit her main job. At this time, although the Hai Phong City Planning 2021-2030 has been approved, in which Thuy Nguyen City will be established in 2025, it is difficult to make the market in this area strongly vibrant.

"With no transactions for many months, I also considered returning to the industrial park to have a stable income and wait out this difficult period," she said.

Mr. Trung, an investor with more than 5 years of experience in the Hai Phong market, said that at the peak of the fever in 2021, many areas here increased in price by 50-100%, especially the resettlement area of ​​Bac Song Cam Urban Area and land on Highway 359. Currently, real estate prices tend to stagnate, some areas that were previously highly speculative and inflated in price have decreased by 20-30%. Both the excitement and liquidity are assessed by Mr. Trung to have decreased by 80% compared to the beginning of 2022.

Some hot growth areas in Thuy Nguyen two years ago have shown signs of cooling down, with prices dropping by 10-20%. For example, some plots of land on Road 359 in Nui Deo town used to reach VND150 million per square meter in 2021, but have now dropped to VND120-140 million per square meter. Resettlement land in the Bac Song Cam Urban Area has also cooled down, from VND50-70 million per square meter to VND32-60 million per square meter. At the urban area project near Road 9C, shophouse and townhouse products have also dropped in price by about 10-15%, but transactions are sluggish.

Mr. To Hung, Head of the Hai Phong Representative Office of the Vietnam Association of Realtors (VARS), said that since the middle of last year, the land segment has clearly declined. From 2022 to early 2023, land prices have decreased by about 15-30%. By the second quarter, some areas that had been "virtual fever" decreased by another 5-10%. Land prices in the area near the center of Hai Phong City fluctuated from 12-40 million VND per square meter, in the suburbs, it was mostly under 12 million VND per square meter, and there were still many areas with land prices of 3-5 million VND per square meter.

The price level has increased to a high level along with the general difficult situation, which is the reason why the real estate market in Thuy Nguyen is gloomy despite preparing to become a city. Mr. Tran Huy Bien, CEO of An Phu Land, a unit specializing in distributing projects in Hai Phong, said that the market often "catches the wave" of planning or infrastructure changes at least 2-3 years before being officially approved. That is the reason why the Thuy Nguyen market has grown strongly in the past few years.

According to him, the current stage is when the market has just escaped the bottom and is slowing down. The demand for short-term, swing trading investment is almost very low. Customers at this time prioritize looking for products with deep loss cuts or areas with soft prices, with many changes in infrastructure. The segment that is traded a lot at this time is usually under 2 billion VND per lot because of the advantage of being easy to buy and easy to sell.

However, Thuy Nguyen's orientation towards becoming a city has boosted the supply of housing projects in recent times. Ms. Do Thi Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi, said that the Hai Phong market will heat up as the demand for housing continues to increase, but it will depend on the plan to expand land funds to the North and South. From the end of this year onwards, Hai Phong's housing supply is forecast to add more than 25,000 units. Thuy Nguyen will account for more than half of the future supply thanks to its large land fund and many industrial parks.

"The city needs to step up infrastructure improvement and strengthen links with key economic zones to promote industrial real estate, thereby creating demand for residential real estate," said Ms. Hang.

Forecasting liquidity at the end of the year in Hai Phong, Mr. Hung said that about 80% of transactions are concentrated in housing and land products serving consumer needs or low-value suburban land, under 1 billion VND. Investment demand is still present in the market, accounting for nearly 20%, concentrated in loss-cutting products, lower prices than the market or cash flow-generating products, worth 3-10 billion VND. In which, Thuy Nguyen is still an area with long-term potential because it owns a large industrial land fund. However, real estate growth will depend on changes in infrastructure and population of this district in the next few years.