Property market still in a slump but land prices stabilize

By Ngoc Diem   December 18, 2023 | 07:00 am PT
Property market still in a slump but land prices stabilize
Apartments in Hanoi's Ha Dong district. Photo by VnExpress/ Ngoc Thanh
Fire sales of land plots have decreased in the second half of 2023 and the segment remains the most popular on the property market, real estate consultancy Batdongsan said.

At the 2023 Vietnam Real Estate Summit held last Tuesday, Dinh Minh Tuan, Batdongsan’s southern regional director, said posts for such sales have fallen dramatically on his company’s trading website since the middle of the year.

The segment still garners the most interest among investors as, he said.

In a recent survey by Batdongsan, a third of participants said they were mostly interested in land in 2024, the highest of any property segment, with 30% believing the land market would recover in the first quarter of next year.

Though land prices have stabilized, the volume of trade has not returned to pre-Covid levels since the segment is marked by low liquidity during a recession, Tuan explained.

Of over 500 real estate brokers who participated in the survey, 40% knew the number of land transactions had dipped in the past six months, he said.

Quang Ninh, Dong Nai, Long An and Ba Ria – Vung Tau are provinces where land prices are now lower than at the beginning of the year.

Some policies that could mitigate legal hurdles to trading in the segment have not been passed, and so the market is still to recover, Tuan added.

Over a third of the brokers and investors surveyed expected the apartment segment to recover the most in early 2024.

Nguyen Quoc Anh, Batdongsan’s deputy CEO, likened the current market conditions to those 10 years ago when too there had been a recession.

The lowest point this year for the apartment segment was in June and July when many major projects were delayed by legal issues, but supply improved in both HCMC and Hanoi by October-November, he said.

Developers have been offering freebies and flexible sales policies instead of price cuts to attract buyers, and these have proven to be very effective, he added.

Dr. Can Van Luc, chief economist at state-owned bank BIDV, said the economy has made progress and growth this year is expected to reach 5-5.2%.

Inflation has dropped to 3-3.5% from 5% at the beginning of the year, he added.

With amendments to the Land Law set to take effect in 2025, bank interest rates falling and credit increasing, experts expect the market to recover in the third quarter of 2024 and boom again by the second quarter of 2025.

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