High growth expected for VN’s land lot segment
High growth expected for VN’s land lot segment
Many experts believe that the land lot segment has received significant attention from investors as evident from the increasing selling price and transaction numbers.
Some even expect this segment could become “hot” in the near future.
Statistics from the Department of Housing Management and Real Estate under the Ministry of Construction showed that in the first nine months of the year, total property inventory in the country was some VND26.2 trillion (US$1.15 billion), of which inventory of land lots of more than 3.1 million square metres accounted for the highest value -- equivalent to VND12.5 trillion.
Experts and commercial real estate services firms said the land segment has regained the attention of investors.
Thuy Lien in Ha Noi’s Hoang Mai District said her family used to spend money on buying apartments, which could later be sold for profit. However, she felt investing in apartments was no longer a safe and attractive option. Instead, she was now buying land lots as a new avenue to gain profit.
She explained that a significant number of apartments had been sold, leading to saturation of the segment and low liquidity. In addition, the apartments were dependent on construction progress, investors’ reputation and legal disputes, in spite of a high investment value. Investing in apartments was therefore riskier than putting money into land lots.
Those with strong financial capacity bought land lot projects that were progressing slowly, and were therefore available at low prices. They then waited for the projects to speed up to sell at higher prices.
Land lots in new urban areas had the advantages of available infrastructure, transport connectivity and better construction density in comparison with the older residential areas.
In addition, the land lot segment had attracted investors as it met both the targets -- accommodation and investment.
Most Vietnamese believed that the value of land would increase more than the value of apartments.
In the past two years, the “fever” for land lots has been witnessed in the three large cities of Ha Noi, Da Nang and HCM City.
For example, HCM City saw a high demand for land lots in the city’s eastern area, while the price of land lots in Thanh Ha Cienco 5 in Ha Noi’s Ha Dong District rose by 1.5 to two times in comparison with the initial price.
Nguyen Van Dinh, vice chairman of the Viet Nam Association of Estate Agents, said the market had witnessed a fluctuation in the selling price since March, with land lots seeing the highest increase.
This market segment is expected to see impressive growth rate in the near future, Dinh said.
He said State management agencies should have solutions to stabilise the segment to prevent “virtual” price hike, causing negative effects on the market.
The ministry said localities should publish information on planning and progress of transport, infrastructure and property projects to prevent a “fever” for the land lot segment.
