As Vietnam's real estate market enters a new growth cycle, land prices in suburban areas are experiencing significant fluctuations, inviting both interest and caution among investors. In the first two months of 2025, data from Batdongsan.com.vn indicates that asking prices for land plots in the outskirts of Hanoi surged between 30% and 80%, with Quoc Oai leading the charge at a remarkable 74% increase. Despite these soaring prices, interest in land plots has not kept pace, showing signs of stagnation or even a slight decline.
Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, attributes this trend to the continuous rise in land prices over the past few years, which has led many investors and buyers to adopt a wait-and-see approach before making their decisions. "The continuous increase in land prices in the suburbs of Hanoi has made many investors and buyers cautious, leading them to observe the market closely before acting," he stated.
Interestingly, following news of a planned merger of several provinces, speculators have shifted their focus from land near the capital to opportunities in provincial areas. This shift is reflected in the significant increase in demand for real estate searches in related localities, with areas like Nhon Trach seeing a 41% rise in interest, while Thuan An and Di An in Binh Duong recorded increases of 26% and 23%, respectively.
While real estate prices in these regions also show upward trends, the increases are not uniform. Binh Duong has maintained a stable growth trajectory, indicating sustainable development. However, in Nhon Trach and Ba Ria Vung Tau, prices have surged by 20% to 30%, nearing the peak levels of 2022 when many large investors exited the market. This raises concerns about whether the market is escalating too rapidly and may be at risk of a correction.
Dinh Minh Tuan, Director of the Southern region of Batdongsan.com.vn, warns that this phase poses numerous risks, particularly for new investors entering the market. He emphasizes that real estate prices are influenced by various factors beyond merger announcements, including infrastructure, location, job demand, immigration, and the local economic foundation. "Merger is a great opportunity, but it is necessary to stay alert, buy in the right place, at the right time, and avoid following the crowd mentality," he advised.
Moreover, the Vietnam Real Estate Brokers Association (VARS) has issued warnings to investors regarding potential land price surges fueled by merger announcements. VARS asserts that for real estate values to rise sustainably, a solid foundation is necessary, which includes synchronized development in transport infrastructure, economy, and society. They highlight the importance of major infrastructure projects, such as new highways, metro lines, and schools, as well as the potential for generating income through rental opportunities.
VARS cautions that land price surges based solely on news without corresponding investment and development plans tend to have short cycles. These rapid increases are often difficult to maintain over the long term. "Investors should be extremely cautious before the virtual fever, as land fever based on news usually only benefits a small group of speculators, while most individual investors and real buyers risk getting stuck if they buy at 'expected' prices that have been pushed too high," VARS warned.
As the market continues to evolve, the combination of rising prices and inconsistent interest levels suggests a complex landscape for investors. While some regions are seeing robust growth, others may face challenges as the market adjusts to new economic realities. Investors are urged to conduct thorough research and consider both the potential rewards and risks before diving into the current real estate climate.
In summary, the Vietnamese real estate market is at a pivotal moment, with land prices rising sharply in certain areas while interest levels show signs of inconsistency. As speculators pivot to provincial opportunities in light of potential mergers, the overall market dynamics are shifting. Investors must navigate these changes carefully, balancing the allure of rising prices against the backdrop of market caution and potential risks.
