Large plots of land in the suburbs with grass growing, advertised at a 50% loss but still difficult to sell

The unsold suburban land has put Mr. Nam (in Dong Da district, Hanoi ) under additional financial burden at the end of this year.

Mr. Nam said that around mid-2021, he bought a garden plot with residential land of nearly 700 square meters in Thach That district (Hanoi) for 9 million VND/square meter. When he bought it, he expected to build a homestay for business in the next few years. But his company's business situation was difficult, so he decided to sell the above plot of land. After advertising for a long time, he could not find a buyer, even though the advertised price had been reduced by 50%.

Đất nền lô to ven đô để cỏ mọc, rao cắt lỗ 50% vẫn khó bán - 1 — Many plots of land in Thach That district (Hanoi) were bought by investors during the "land fever" period but are now overgrown with grass (Illustration: Ha Phong).

Also in this difficult situation, at this time, Mr. Nguyen Minh Duc (in Thanh Xuan district, Hanoi) is also busy taking care of his debts. He cannot turn around the money, and his capital of more than 5 billion VND is "buried" in 2 plots of land in the suburbs.

"When the market was "hot", I did not sell the first lot to make a profit but bought the second lot. When the market was gloomy like recently, no one would buy it even if I sold it, not to mention I had to sell it for a cheaper price than when I bought it," Mr. Duc shared.

According to Mr. Duc, both plots of land he bought are currently vacant. He also does not have enough finance to invest in leasing or doing any business on those plots of land.

In fact, recently, information about selling land plots at a loss in the suburbs of Hanoi has appeared frequently on real estate channels. Among them, there are plots of land that have increased in price but the owners are still able to sell them. On the contrary, there are plots of land that have decreased in price but the owners are still unable to find buyers even though the prices have decreased.

According to Mr. Nguyen Quang Khanh - a real estate broker in Hoa Lac area, Thach That district, land transactions in this area have improved in the past 1-2 months. However, transactions are mainly concentrated in the financial range of 1-3 billion VND.

"Currently, plots of land priced at 5-10 billion VND are very difficult to find buyers, even though they have cut losses. In particular, plots of land with large areas but are covered with grass will be very difficult to sell," said Mr. Khanh.

Đất nền lô to ven đô để cỏ mọc, rao cắt lỗ 50% vẫn khó bán - 2 — Land for sale sign in suburban area (Photo: Ha Phong).

This broker also said that, in addition to choosing plots of land that are discounted and cutting losses, buyers should only transact in plots of land that can be used for living or business.

Sharing at the Vietnam Real Estate Conference (VRES 2023) held recently, Mr. Dinh Minh Tuan, Director of a real estate information channel, said that the real estate market this year faces many challenges.

Demand for real estate has dropped sharply in all types. Specifically, demand for land has decreased by 20%, project land by 28%, apartments by 16%, villas and private houses by 6-9%.

Mr. Tuan also commented that land plots are one of the segments most seriously affected when the real estate market "froze" last year. Almost all transactions in this segment were postponed. Most investors had to cut deep losses to retain customers. However, product liquidity has not changed much.

It is forecasted that in the coming time, the land market will continue to face difficulties, especially large plots. The revised Law on Real Estate Business, which officially takes effect from the beginning of 2025, will tighten the subdivision and sale of land, which may cause the level of interest in land to continue to decline. The land price level will also be adjusted down, especially for large plots.

However, in the long term, this expert also believes that land prices may continue to increase and transactions will return. The reason is that real estate prices also depend on other factors such as infrastructure development, economic growth, and people's income.

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