Investing in land is 50 times more profitable than buying gold

May 16, 2024 | 03:10 pm PT
Investing in land is 50 times more profitable than buying gold
Properties in HCMC's western area of Binh Chanh District. Photo by VnExpress/Quynh Tran
A plot of land my parents bought in 1993 has appreciated to VND8.5 billion (US$334,100), earning them 50 times the profit they would have made if they had bought gold.

They purchased the land, located on National Highway 50 in HCMC’s western area of Binh Chanh District, for two taels of gold. A tael equals 37.5 grams or 1.2 ounces. The house next to the plot has recently been sold for VND10 billion. If I needed to sell that plot immediately, the price would certainly not be less than VND8.5 billion, which is around 100 taels now. This means that by investing in real estate, we have profited 50 times more than we would have by buying the yellow metal.

Similarly, my cousin bought their first real estate in 2005 for VND850 million (about 10 taels of gold now). He can now easily sell it for VND15 billion, or nearly 180 taels, as similar properties nearby have been sold for more than that.

Not only is investing in properties more profitable, but you can also live there for years without having to pay rent. Even my parents' worst-performing land plot, purchased in 1996 for 75 taels of gold, has appreciated to approximately 100 taels over the last 20 years, outperforming the precious metal.

What I am saying is that in the long term, investing in real estate is always better than hoarding gold. House prices are significantly higher now than they were 20 years ago. Frankly, anyone who bought a house two decades ago would have made a fortune from it by now.

I am not claiming that property surpasses all other asset classes. If that money had been invested shrewdly in stocks over the same period, the returns might have been just as high, if not higher. I believe everyone should invest in the channel they are most knowledgeable about.

I understand that it will be increasingly difficult for young people, including my children and grandchildren, to buy houses in the future. Therefore, I try to invest in real estate as early as possible to one day pass down my assets to future generations. If you want to buy properties for speculation or for your children, you should buy quickly, as the longer you wait, the more prices will go up.

In the short term, the real estate market may "freeze" for a few years, but in a decade or so, profit is practically guaranteed. The market was said to have hit its peak in 2008-2009, yet prices have eventually increased since then. Hence, I believe real estate remains a safe and profitable long-term investment.

Do you agree with my analysis?

Reader Quoc Khanh

*This opinion was translated into English by AI. Readers’ views are personal and do not necessarily match VnExpress’ viewpoints.

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