Signs of a Resurgence in the Real Estate Market at the End of the Year
The real estate market in some outlying areas of Hanoi has shown signs of improvement after a difficult period, according to several research organizations.
Increasing Transaction Volume
The quarter III report by the Vietnam Association of Realtors (VARS) reveals that the overall market transaction volume has been steadily increasing, with a variety of products meeting the demands of the public being introduced into the market. The total transactions for the first, second, and third quarters were 2,700, 3,700, and 6,000, respectively.
Growing Demand for Land
The demand for land as an investment asset continues to be favored by investors, according to market research. Land auctions have particularly seen an increase in popularity. VARS has observed that many investors have begun to “hunt” for land in the outskirts of major cities.
Promising Areas
The demand for land is also showing signs of growth in certain areas along the Belt Road 4 – Capital Region, such as Hung Yen, Bac Giang, and Bac Ninh. For example, the Tax Department of Bac Giang Province reported that, in the past ten months, the province organized 92 land auctions, with a total of 2,969 lots. Notably, in Nham Bien town, Yen Dung district, an auction of 50 land plots attracted 500 applications, resulting in a winning bid of 87 billion VND, nearly double the starting price. Investment experts believe that the “hot” market is due to the favorable location and high profit potential of the auctioned land, as well as its proximity to industrial zones.
Market Recovery and Different Segments
Industry experts predict that the market recovery process will continue to differentiate among segments and regions due to varying absorption capacities. The provinces surrounding Hanoi have prospects for recovery due to their well-planned development and strong industrial zone formation.
Le Bao Long, the Strategy Director of Batdongsan (a member of PropertyGuru Group), has provided information that currently, land in many areas is priced within reach of the majority of investors. Therefore, individuals with idle funds who purchase land at this time and price range have the opportunity for good short- and long-term returns.
According to Batdongsan data, representative provinces in the North have experienced stable land price growth over a long period, from Q1 2018 to Q3 of this year, with Hung Yen (up 36%) and Bac Ninh (up 20%) leading the way.
Considerations for Investors
An expert recommends that the end of the year is a favorable period for property investment, but investors should carefully choose projects near industrial zones in key economic areas. Buyers should consider natural conditions, transportation systems, and the industrial zone sector’s attractivity in order to increase the potential for higher prices. Moreover, investors should evaluate legal issues and whether the location facilitates convenient access to industrial zones, as this will enhance the liquidity of the land plots.
Positive Changes Supported by the Government
The real estate market is seeing more positive changes thanks to the determination of the Government and the efforts of ministries, local governments, and related agencies to support businesses and projects. The push for public investment is also increasing the demand for land transactions along the growing road network.
Recently, the Government issued Decree 35 to amend and supplement certain provisions of decrees related to the state management of the construction sector. Decree 35 allows provincial People’s Committees to decide on land subdivision and land lot sales in compliance with relevant laws, without having to seek approval from the Ministry of Construction. As a result, some localities have “unshackled” land subdivision for people with housing needs.
According to VARS, the overall real estate market will have more bright spots, especially in areas with potential for development, well-planned modernization, and a focus on infrastructure. These areas still have reasonably priced land available.
Article by Hoai Phong