Land fever falls flat, prices fall
The Ministry of Construction said that the real estate market is under control and stable. Land prices have decreased by 10-20 percent.
The ministry’s H1 report showed that the land fever which broke out in the first months of the year has subsided, but the number of transactions remains low.
The prices of apartments increased slightly monthly, especially in Hanoi and HCMC, because of short supply.
The average apartment price in Q2 increased by 2 percent over Q1. The price increases at some projects were higher, 4-7 percent.
The rents of serviced apartments and offices kept decreasing quarterly, by 1-3 percent. The sharper decreases were reported for retail premises and street-front houses in large cities, by 10-30 percent.
Retail and tourism real estate are facing serious difficulties because of Covid-19.
The Q2 report of the Vietnam Association of Realtors (VARs) showed that supply has decreased because of few newly licensed projects. The number of transactions was modest because of high prices and Covid-19.
The land fever and the follow-the-crowd investment movement caused many investors to suffer. Many have tried to bargain land away to stop losses.
Land prices at projects in Dong Anh and Gia Lam have levelled off, staying the same as the end of Q1, though the number of transactions was low. In Hoa Lac, Son Tay and Hoai Duc, which once witnessed land fever, there have been signs of price decreases. There were many offers for sale in the market, but very few real transactions.
The liquidity in the market was low, even though many investors offered to sell land at a loss of VND500 million.
The market was also gloomy in Vinh Phuc. Minh, an investor, said clients have given up buying two of her five land plots, though they had paid a deposit.
Earlier this year, when the land fever was at its peak, Noi Hoang commune was once the ‘hot spot’ in Bac Giang province. The prices then soared to VND30-40 million per square meter.
Huy, an investor from Hanoi, injected money into some 70-90 square meter land plots, priced at VND2.5-2.9 billion. However, some months later, he had to offer the land plots at a loss of VND300-500 million as the land market had cooled down. But he still could not find buyers.
The Q2 report from Batdongsan.com.vn said interest in the real estate market began decreasing in the second half of April.
The search demand for the entire market in April dropped by 18 percent from March. The sharpest decreases have been reported in Hai Phong (34 percent), Bac Ninh (29 percent) and Da Nang (21 percent).
Some real estate developers engage in dishonest practices: One apartment is sold to many people. Developers receive deposits and take reservations though the legal status is unclear.
The latest Covid-19 outbreak, which began in late April, has slowed down the industrial real estate market. There have been only small-scale projects and no large scale one announced.