The story of investors who missed the “peak” of real estate

Anh Thanh, an investor in Hanoi, said that during the fever in early 2021, he bought a land of 109m2 in Bac Giang for 22 million VND/m2. However, recently, because he needed money to invest in other fields, he needed to sell it urgently. However, despite having been for sale for a long time, his land has not yet been transferred to the new owner.

“When I finished buying, it only increased to 25 million VND/m2 in a short time, but because I did not need to use the money at that time, I did not sell. So far, although it has been for sale for a long time, it has not been successful. Even, I have decided to pay more commissions for brokers and lower the price compared to the land price in the area,” Thanh said.

Similarly, Mr. Bac, a side investor in Nam Tu Liem (Hanoi), in October 2021 bought a land of 90m2 in Hung Yen for 3 billion VND, equivalent to more than 33 million VND/m2. . As originally planned, Mr. Bac only counted “surfing” for a few months, when the market was still “hot”. However, all the calculations of this investor collapsed when the market suddenly cooled down.

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“I put it up for sale, but many people buy for the purpose of building houses, so they pay a lower price. In fact, the market was still hot when I bought it, so I decided to borrow up to 50% of the land value. Although I don’t need the money right now, I want to sell it to pay the bank. Now that it can’t be sold, I’ll have to wait,” said Mr. Bac.

According to the survey, from 2020, land prices in many localities continuously increased “galloping”, creating a situation of local “land fever”. Even in many localities, even though there is no new planning or infrastructure, the land price is still continuously “pumped”. Experts say that the sharp increase in land prices compared to the infrastructure in developed areas has created “virtual” land fevers. This has caused the real estate market to fall into a situation where people with real needs cannot buy it, investors who buy at the peak price do not want to cut losses, leading to liquidity loss.

According to Mr. Nguyen Van Hai, a long-time investor in Hanoi, many investors find it difficult to liquidate land because the land is priced too high when purchased. This leads to the situation that, although “hugging” the land for many years, the price is still “stagnant”.

“The story of real estate investment is long-term, surfing will cause great risks for investors, even leading to the burial of capital for many years. Especially, when the market is hot, it’s time to sell, not buy, because waves can break at any time,” Hai said.

According to investors, the increase in land prices is understandable given the rapid urbanization in Vietnam. However, the level of increase is moderate and still within the capacity of people with real needs to buy. And the strong increase that investors do not dare to buy is too unreasonable.

“In fact, when the market is at an uncertain stage like now, investors or speculators themselves do not want to buy. While the land price increases sharply, people with real needs can’t buy it, which will lead to poor liquidity, “said Mr. Hai.

Real estate expert Phan Cong Chanh shared that when investing in land “fever”, only about 20% are investors with a medium and long-term vision, the rest 80% are speculators with the desire to earn money. good profit margins for short periods of time, or even surfing from market start to peak. The trend of “surfing” when the real estate market is hot or catching the bottom to wait for an opportunity is only for professional investors who are proficient in the market. Investors who “die” from land fever are often newcomers, investing in following the crowd, grasping information slowly or with little knowledge and inexperience.

Sharing the same opinion, Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, said that speculation or investment to make quick profits can also bring real high profits, but those are the lucky few, not majority. Buyers must be alert about the land use function when buying. Buyers also need to carefully consider the legal corridor, whether to change the land use purpose or not. Also, buyers should compare with similar regions or previous years’ prices and be careful if the gain is 50 – 100% or even more, as that price volatility race is likely to be a virtual bull run.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that real estate prices have been pushed up too high recently in many localities with information on planning, projects, airports, etc. the market experiences many “land fever” continuously, investors must be more cautious in making decisions to put money down.

According to Mr. Dinh, the actual transaction is low, limited by the price being pushed too high, the price does not reflect the true value. Investors, buyers also calculate the value to a reasonable extent. Therefore, people with real demand will not buy products that are overpriced, leading to difficult liquidity situations. To stabilize the market, state management agencies are strengthening the legal corridor for the real estate market.

After the land fever, which real estate will bring money to investors in 2022?

According to Toquoc.vn