Will there be a land fever at the end of this year?

Real estate prices continue to rise, causing many people to worry about a land "fever" at the end of this year.

Prices will continue to increase until the end of the year...

Commenting on real estate prices in the last 6 months of the year, experts all believe that they will continue to increase until the end of the year.

Mr. Vo Hong Thang - Deputy General Director of DKRA Group analyzed: The current input costs are very high, making it difficult for primary prices to decrease and even tend to increase slightly. The market focus still belongs to real estate products, near residential areas, developed by large, reputable investors.

However, liquidity will remain the same as it is now because it is affected by macroeconomic developments, wars, tariffs... These are variables that make investors wary and make it difficult for the market to make a sudden change.

Mr. Pham Duc Toan, General Director of EZ Real Estate Investment and Development Joint Stock Company (EZ Property), further analyzed: In the coming time, when many localities issue new land price lists, the market will have big fluctuations. Currently, some localities have expressed the opinion that they will have to adjust the land price up, with the reason that the actual land price is high, the land price list cannot be too low because it will lead to a big difference.

Real estate prices are forecast to continue to increase until the end of the year. (Illustration: Minh Duc).

For real estate businesses, increased land prices will lead to increased land use fees and compensation costs, leading to an increase in total project investment costs. This will cause housing prices to increase.

“ The land price list increases, people benefit from high land compensation prices, but those who want to buy houses have to accept high prices. We want to reduce house prices but land tax increases, so it will not be easy to solve,” said Mr. Toan.

Sharing the same view, Mr. Duong Van Sy, General Director of An Vuong Land, also predicted that the real estate market in the coming time is unlikely to decrease in price. Provinces with strong internal strength and well-connected transportation systems will continue to maintain a certain "heat", however, the price increase will generally slow down compared to previous periods.

Transactions in the market are still taking place cautiously. Confidence has not really recovered clearly, causing the absorption rate to slow down, especially when the current price level is still high, while supply is no longer as scarce as before.

Mr. Sy recommends that investors should select products based on the criteria: legal - infrastructure - liquidity. Allocate capital to types of real estate that can generate stable cash flow such as housing, commerce, offices, etc.

Focus on investing in localities that attract FDI, develop industry and have high GDP. Along with that, build a long-term investment strategy, avoid following the crowd or expecting short-term surfing.

...but land fever is unlikely

Real estate expert Le Dinh Chung said that recently, the Government has continuously taken actions to remove legal obstacles for real estate projects. This will help increase supply, give customers more choices, and make the market more vibrant in the second half of the year.

Land fever is unlikely to occur at the end of the year. (Illustration: Minh Duc).

However, he believes that the second half of the year will hardly see a land fever. Because important news such as the merger of provinces and cities has been clear and reflected in prices before. Besides, from now until the end of the year, real estate prices in Hanoi and other provinces will be adjusted to be more suitable because real estate prices are currently beyond the affordability of buyers.

According to Mr. Nguyen Quoc Anh, Deputy General Director of PropertyGuru Vietnam, real estate buyers and sellers have not yet met at the right price. Although policies have had positive changes such as easing credit or promoting public investment, actual purchasing power has not recovered clearly. The first quarter report of this unit also shows that the level of interest in real estate nationwide only increased by about 3% compared to the same period last year, much lower than expected.

One of the reasons why the market cannot “heat up” again is due to the tightening of legal regulations for housing projects, especially high-end projects in Ho Chi Minh City and Hanoi. Many investors are still struggling to complete legal procedures, causing new supply to continue to be limited. Meanwhile, the social housing and low-cost housing segments - where there is a large real demand - have not been deployed strongly enough to create momentum for the market.

In addition, the psychology of people and individual investors is still very cautious after the "freezing" period lasting from late 2022 to 2024.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also said that the market is showing signs of "warming up" but is not strong enough to explode.

“ The technical recovery in some areas does not reflect the overall market trend. In the second half of the year, although interest rates may continue to remain low, legal barriers and investors’ defensive psychology will still be factors that restrain strong price increases ,” Chau said.

Ms. Duong Thuy Dung, CEO of CBRE Vietnam, assessed that the market is entering a phase of purification. Buyers are increasingly stricter about legality, progress and reputation of investors. Although the demand for housing is still high, especially in the affordable segment, the actual supply is very limited. This makes it difficult for the market to grow dramatically in the short term.

Similarly, Ms. Pham Thi Mien, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute, also stated that the real estate market in the remaining months will continue to recover widely. The apartment segment will still lead the market thanks to the recovery of supply and the high demand, especially in large cities.

However, some apartment markets that have grown rapidly will have adjustments, prices are expected to remain stable or decrease slightly in projects with selling prices that are too high compared to investment value and actual use value. Meanwhile, the price level of apartments in urban areas with synchronous infrastructure and utilities, attracting a large number of residents, will still maintain an upward trend but at a more stable rate.

The apartment segment, low-rise segment, and land plots in hot growth markets will also be adjusted. Projects with clear legal status and well-invested by large investors will still maintain their appeal.

“ The apartment fever will be difficult to happen at the end of the year because the current price level is anchored at a high level and the supply is showing a clear improvement trend across the country, ” Ms. Mien emphasized.

With land, fever can still occur locally in some localities if there is new information about mechanisms, policies or planning. Because this is always a very sensitive segment and the FOMO (fear of missing out) mentality still exists in a certain group of investors.

Mr. Pham Duc Toan said that the real estate market in the second half of the year has many unknowns. Specifically, the merger of provinces and cities will have fluctuations in land use and housing needs. The places that are set as new administrative centers will have strong development momentum in the coming time, but will not lead to a "feverish" situation. In areas that are no longer the center after the merger, real estate prices may decrease.

Source: https://baolangson.vn/cuoi-nam-nay-co-xay-ra-sot-dat-5052375.html