He had never invested in property before, and chose to buy it based purely on recommendations from friends and brokers, who told him the price could double in a couple of years.
He paid VND3 billion ($128,000) for it, with VND1 billion coming from a loan.
He has been trying to sell it, but in the last three months fewer than 10 people have called him to ask about it, and no one was willing to pay the price he wanted.
"I paid VND50 million per square meter, but now they are asking for VND46 million."
But he cannot keep holding the land for much longer since he has to pay around VND15 million a month for the loan, which is becoming a burden as it accounts for half his income.
Thang is among many property investors in the country who are stuck with lands or houses as selling is not a viable option amid a market slump and loans eat into their monthly income.
After the property "fever" that raged at the end of last year and earlier this year broke, demand began to plummet in the second quarter, the Vietnam Association of Realtors (VARS) said in a recent report.
The use of leverage should be carefully considered, it warned, adding that investors should wait for "safer" opportunities in future.
A report by property listing platform Batdongsan.com.vn said searches for land lots in Hanoi dropped by 23% year-on-year in the second quarter, while in HCMC the fall was 11%.
Tan of HCMC’s Nha Be District made a killing on property in 2016-18 by using leverage of five to seven times his investment, but this year has been dire.
His bank loans cost him VND250 million a month in interest, but there are few buyers, making selling at a loss his only option.
"I sold a land lot for a 12% loss recently to reduce the debt burden. If interest rates continue to rise, I could run out of cash."
Economist Dinh The Hien said the property market is seeing low activity because the government has been tightening credit to the sector to limit speculation and banks are restructuring their loans portfolio after splurging on the sector in recent years.
A prime minister decree issued Monday says that banks need to prioritize credit for building houses for workers and other low-income people instead of "risky" projects.
The decree also seeks to regulate mobilization of funds by property companies that seek to speculate or manipulate the market. It wants the Ministry of Finance and the State Bank of Vietnam to closely monitor bond issuances of property development companies.
Total outstanding loans to the property sector are now at over VND2,000 trillion, or 20% of all loans, according to the State Bank of Vietnam. Growth in lending to the property sector is set to reach 9-10% this year, it added.
Transactions, and possibly prices, are set to continue to fall this year, he added.
VARS chairman Nguyen Van Dinh said that it is difficult to sell property now as buyers are uncertain about profitability and market in the near future, and they are choosing to observe the market rather than making investments.
Land prices had skyrocketed last year and in the first quarter of this year with many localities seeing double- and triple-digit rises.
But many places are now seeing a decline in interest.
Searches for property in some areas in Hanoi like Quoc Oai, Dong Anh and Gia Lam declined by 20-29% year-on-year in the second quarter, according to Batdongsan.com.vn.
Khanh Ha, who bought a plot of land in Quoc Oai in May last year at VND22 million per square meter, now wants to sell it at the same price but there is little interest.
"I borrowed VND800 million from the bank and relatives to buy the plot, but now I am having trouble paying the monthly interest and so want to sell."
When she bought, she heard rumors that property prices in the area could double within a year.
Phan Cong Chanh, CEO of property developer Phu Vinh Group, said using leverage for property investment carries huge risks especially when the market falls.
For Thang, paying a large amount as interest for the last several months has been a lesson that investing in property is not easy as he used to think.
"I invested without careful consideration, and now I am paying for it."
Dat Nguyen
