Investors 'hesitate' with apartments, turn to 'king' segment; market assessment 2024-2025

No longer interested in apartments, investors are pouring money into buying up land in the suburbs; reclaiming more than 1,400 hectares of land; the latest procedures on land allocation and leasing for sea encroachment investment projects... are the latest real estate news.

The real estate market has recently shown more positive signs regarding access to capital from both businesses and customers. (Photo: HA)

The 'big guys' comment on the market

At the annual meeting with shareholders, leaders of large enterprises gave forecasts and comments on this year's real estate market with opportunities mixed with challenges.

Assessing the real estate market this year, Mr. Pham Thieu Hoa, Chairman of the Board of Directors of Vinhomes, said that the bright spot is the 3 laws related to real estate passed by the National Assembly, which will help the market become more transparent and clear. However, for these laws to have a positive impact on the market, he said it is necessary to wait for the decrees guiding their implementation to take effect.

Ms. Nguyen Thu Hang, General Director of Vinhomes, assessed that the market will recover but not as quickly as expected.

According to Ms. Hang, the market has recently shown more positive signs in terms of access to capital from both businesses and customers. Homebuyers are now receiving better interest rate support than before, with a fixed interest rate of 6-6.5% per year for the first two years. This creates conditions and confidence for homebuyers to return to the market.

As for Nam Long Investment Joint Stock Company, Mr. Nguyen Xuan Quang - Chairman of the Board of Directors pointed out both opportunities and challenges.

Mr. Quang analyzed that the first challenge is related to the market and products. The market has an imbalance between supply and demand in different real estate segments, and the crisis of confidence leads to reduced liquidity and increased inventory.

The second is the financial challenge when the debts still remain, the bond lots, although extended, will still linger in 2024 and 2025. The third is the legal challenge of the project when currently some laws are still overlapping.

However, according to him, the market also opens up many different opportunities such as high real demand, affordable housing segments, and developing social housing. Lending interest rates have decreased, even lower than before Covid-19 and are competitive with many other countries, so it is very attractive.

In particular, new laws related to real estate have just been issued. The government has made great efforts in creating, removing and promoting market obstacles to move towards sustainable development.

For Dat Xanh Group, a company with many projects in Ho Chi Minh City and Dong Nai, Mr. Luong Tri Thin - Chairman of the Board of Directors - said that after the end of Covid-19, the economy will decline and affect the real estate market.

After the recent Tet holiday, the market began to show positive signs of recovery. Apartment products in the first quarter have been traded again, although not as high as previous years, but compared to the last two quarters of 2023 and the first quarter of 2023, the number of transactions has doubled, especially in Hanoi, it is 3 times higher.

With such a general situation, Mr. Thin sees that the market still has positive points such as the scarcity of average supply; the demand for housing is still very large; the current cheap cash flow is very good, many customers borrow with a term of 20 years, the fixed interest rate for 3 years is only 5-6%/year.

On the overall level, the general market will improve this year and 2025 will have positive changes.

Apartment prices cool down, investors pour money into buying land in the suburbs

Apartment prices have been increasing continuously for many years and have increased dramatically in the first months of this year. According to recent market information, Mr. Hoang Hai - Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) - said that the average selling price of some projects in Hanoi and Ho Chi Minh City fluctuates around 50-70 million VND/m2.

According to Mr. Hai, in Hanoi, apartment prices for sale have been increasing continuously in both the primary and secondary markets. Notably, there are apartment projects that have been in use for 5-10 years, even old high-rise apartment buildings are being pushed up in price quite high.

However, the leader of the Ministry of Construction commented that some apartment buildings with sudden price increases had very few transactions and almost no transactions.

In fact, the high price of apartments has made many investors and real buyers hesitate. Many people have decided to stop buying and selling apartments at this time.

High prices and the scarcity of apartment supply in Hanoi at this time make many investors reluctant to invest in this segment. Experienced people will take advantage of this time to buy land in the suburbs.

Many investors are shifting to the land and private house segment. The reason is that suburban land still has "low points" in price, making it more suitable to invest in apartments at this time. However, it is necessary to choose to invest in products with clear legal status, planning and potential for price increase from good infrastructure.

The land market has been on a hot trend recently. The real estate market report for the first quarter and the forecast for the second quarter of the Vietnam Association of Realtors (VARS) show that many suburban districts of Hanoi are experiencing a sudden increase in land prices, especially for subdivided plots.

Compared to the fourth quarter of 2023, land prices increased by about 5%, while the market on the outskirts of Hanoi and adjacent to industrial parks increased by 10-20%.

"Land prices in many places have stopped decreasing. Land products priced under 2 billion VND in the suburbs, in provinces and cities, with guaranteed legal status, available infrastructure and utilities, have recorded a price increase of up to 40% compared to the most difficult time of the market," quoted from the VARS report.

This unit also warned that investors need to be very careful before spending money to buy land at this time, and should carefully research the segment price levels to avoid forming "virtual fevers", causing unsafe risks, when the market is still in the process of recovery.

Commenting on the real estate market this year, many experts believe that "land is still the king" for long-term investment. Investors who have "capital" or use low financial leverage can consider investing.

Although this is considered the right time to consider investing, experts also recommend that investors consider carefully to avoid falling into the "trap" of price reduction.

Reclaiming more than 1,400 hectares of land in Yen Dung district, Bac Giang

According to the 2024 land use plan of Yen Dung district just approved by the People's Committee of Bac Giang province, this locality will recover 1,411.45 hectares of land this year.

Specifically, Yen Dung district will reclaim 1,360.23 hectares of agricultural land, of which the area of ​​rice land that needs to be reclaimed is 1,111.93 hectares, land for other annual crops is 20.47 hectares, land for perennial crops is 208.62 hectares, land for aquaculture is 19.21 hectares, non-agricultural land is 51.23 hectares. The communes with large areas to be reclaimed are Tien Phong (32 hectares), Yen Lu (221.2 hectares), Tan An town (124.66 hectares), Nham Bien town (109.53 hectares)...

A corner of Nham Bien town, Yen Dung district, Bac Giang province. (Source: XD Newspaper)

The People's Committee of Bac Giang province requests the People's Committee of Yen Dung district to be responsible before the law for the accuracy of the information, data, documents, map system, and database in the approved land use plan for 2024; for the consistency of the information and data in the above plan with the adjustment of land use planning to 2030 and the provisions of law when proposing a list of works and projects in the area.

Complete the posting of all approved 2024 land use plan documents on the portal/website of Yen Dung District People's Committee, and at the same time organize the announcement and publicization of the above plan contents according to the provisions of law.

The People's Committee of Bac Giang province also requested Yen Dung district to carry out land management, land recovery, land use purpose conversion, land allocation, and land lease in accordance with the approved land use plan; implement works and projects in accordance with the provisions of law. Organize regular inspection and supervision of the implementation of the 2024 land use plan for the People's Committees at the commune level.

Procedures for land allocation and lease for sea encroachment investment projects

The Government has just issued Decree 42/2024/ND-CP on sea reclamation activities. Accordingly, the sea area identified for sea reclamation must have specific location, area, boundary, and coordinates determined according to the provisions of the law on surveying and mapping. The determination of sea areas for sea reclamation to be included in land use planning and plans must ensure the principles prescribed in the 2024 Land Law.

The Decree clearly states that for sea reclamation investment projects or investment projects with sea reclamation items using public investment capital, the order and procedures for land allocation and land lease shall be implemented according to the provisions of Clause 3, Article 68 of Decree 43/2014/ND-CP. In case of sea reclamation investment projects or investment projects with sea reclamation items to develop land funds, after completing sea reclamation and being accepted according to regulations, the investor of the sea reclamation project must hand over the entire area of ​​land reclamation and construction works (if any) to the competent State agency to carry out land allocation and land lease for organizations and individuals to use according to the provisions of the law on land.

For sea encroachment investment projects or investment projects with sea encroachment items using foreign capital for public investment and projects using other capital sources, the order and procedures for land allocation and land lease are as follows: In case of land allocation and land lease through land use rights auction, the order and procedures prescribed in Clause 5, Article 68 of Decree 43/2014/ND-CP and Clause 21, Article 1 of Decree 148/2020/ND-CP shall be implemented;

In case of land allocation or land lease in case of selecting investors through bidding in accordance with the provisions of the law on bidding or in case of investor approval in accordance with the provisions of Clause 3, Article 29 of the Investment Law 2020, the order and procedures for land allocation and land lease in accordance with Clause 3, Article 68 of Decree 43/2014/ND-CP shall apply;

In case of land allocation or land lease not through land use rights auction, it shall be implemented according to the order and procedures prescribed in Clause 3, Article 68 of Decree 43/2014/ND-CP.

Investors of sea encroachment investment projects or investment projects with sea encroachment items when submitting applications for land allocation, land lease, sea area allocation with sea encroachment investment projects or sea encroachment items of investment projects approved by competent State agencies.

The provincial People's Committee decides to allocate and lease land at the same time as allocating sea areas for sea reclamation. Investors of sea reclamation investment projects or investment projects with sea reclamation items do not have to pay fees for using sea areas to carry out sea reclamation activities.

The time for determining that the land user must put the land into use is calculated from the date of notification of acceptance of the results of the entire or part of the completed sea encroachment area according to the progress of the sea encroachment investment project or sea encroachment items in the investment project.

Source: https://baoquocte.vn/bat-dong-san-moi-nhat-nha-dau-tu-chun-tay-voi-chung-cu-quay-sang-phan-khuc-vua-nhan-dinh-thi-truong-2024-2025-270381.html