Land prices in suburban areas remain high despite the real estate market not yet picking up

Investors looking to buy land have started planning their hunting trips since the beginning of the lunar year. However, despite landowners offering discounts of up to 20-30%, the prices remain relatively high compared to the current market situation.

Even with a budget of over 3 billion dong, Mr. Nguyen Van Dung (Nam Tu Liem, Hanoi) is still struggling to find land in the outskirts of Hanoi. According to him, the reason for the lack of transactions is that the landowners are still pricing their properties high.

“The landowners claim that prices have dropped by 20-30% compared to the start of 2022, but they are still quite high. There are even cases where landowners are selling at a loss, but the prices are still comparable to the peak of the frenzy. The plots with lower prices have very poor locations,” Mr. Dung said.

He cited an example of a 70m2 plot of land in Yen Binh (Thach That, Hanoi), which is still being offered for sale at a price of 26 million dong/m2, equivalent to a land price of over 1.8 billion dong.

“Although it is a self-divided land area with overgrown grass, the land area is still just an empty plot. If compared to the end of 2021, the prices are still the same,” Mr. Dung added.

Similarly, Ms. Nguyen Xuyen (Ha Dong, Hanoi) mentioned that she has visited the Soc Son area (Hanoi) several times since the beginning of the year with the intention of buying land for a 3-5 year investment plan. However, after conducting research, she realized that the current land prices are not significantly different from the end of 2021, despite the landowners offering a 20% discount. In fact, some plots near the construction site of Belt Road 4, with attractive locations, have seen slight price increases.

“After more than a month of searching with a budget of 4 billion dong, I still haven’t found a suitable land to purchase because many people are still quoting excessively high prices,” Ms. Xuyen said.

According to Mr. Vu Thanh Tung, the owner of a real estate trading floor in Hanoi, many land plots in the outskirts of Hanoi still have high prices. The landowners can only accept profits to make a deal due to no financial pressure.

“However, not every land plot can be sold easily, and it may take several months or even years to find buyers. The landowners will continue to offer their properties for sale, and those willing to buy will pay the asking price. In addition, there may be cases where brokers intentionally sell at a loss to attract potential buyers,” Mr. Tung explained.

Mr. Tung also noted that buyers always hope to find cheap land with good locations and clear legal status to gain an advantage.

Land plots with discounts have decreased

According to data from Batdongsan.com.vn, the number of advertised discounted land plots has decreased in the past quarters of 2023. However, the market has not yet recovered in terms of interest and liquidity.

Mr. Dinh Minh Tuan, the Director of Batdongsan in the Southern region, stated that the land market will continue to face difficulties in the near future.

However, in the long run, land prices may continue to rise, and transactions will resume. Real estate prices depend on other factors such as infrastructure development, economic growth, and people’s income.

“Land plots are a type of investment that anyone in the market can consider due to their diversity in size, price, and location. In areas with economic development, these land plots will continue to experience sustainable growth,” said Mr. Tuan.

According to TS Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS), more investors have started their journey of hunting for land in suburban areas of major cities, where there is strong infrastructure development and high urbanization rates, with prices considered to be quite attractive and with potential for future growth. In addition, the demand for land as an asset remains popular among investors and continues to be a top choice.

This article was rewritten for Business Today. For more finance and economics news, visit Business Today.