End of surfing speculation, investors keep an eye on suburban apartments

Real estate has the speculative element of surfing slowing down

After drastic moves against land fever speculation, virtual price increase, the land market in Ho Chi Minh City and neighboring provinces has cooled down clearly. No more scenes of investors rushing to buy land, transfer to hands to earn hundreds of millions of dong in a short period of time.

The May 2022 report of the analysts showed that the secondary selling price of land plots increased by 7% – 11% over the same period last year. However, the decrease in secondary liquidity mainly came from credit tightening, even for projects that already have books of each foundation. It is forecast that the supply and demand of this type in the next month will continue to decrease in the whole market.

From the beginning of 2021 to the beginning of 2022, many investors participated in surfing the land, receiving quite good profits within 6-9 months, even about 3-4 months. However, now entering the market in a short period of time with an initial capital flow of several hundred million dong is no longer a feasible problem. In particular, amid the tightening of speculative activities, the rampant subdivision of plots for sale has been causing the land market to slow down significantly.

Real estate that meets real housing needs takes the throne in the context of a volatile market.

Not to mention, this is also the segment where in the past time, many legal clutters and rampant “ghost” projects have made investors enter the market cautiously, no longer buying and selling as massively as before leading to surfing. The wave of making profits from investors is becoming more and more difficult. Surfing investment activity up to this point seems to be “quiet”. Many investors who buy products for more than a year also find it difficult to sell products in the current context.

The suburban apartment is interested

Many investors with cash flow began to look for opportunities in highly safe segments in the context of volatile market conditions. However, to find real estate products that both meet the criteria of price, good investment location for investment is no longer an easy story in the context of constantly escalating real estate prices like today. With the Ho Chi Minh City market, currently the supply of mid-range apartments is scarce, even extinct for 30 million VND/m2. Therefore, the real demand for investment and buying in real estate is shifting strongly to the area adjacent to Ho Chi Minh City.

Considering the four satellite markets of Ho Chi Minh City, namely Dong Nai, Binh Duong, Long An and Ba Ria – Vung Tau, in recent years only Binh Duong has maintained the supply of real estate to the market. At the same time, there are apartment projects at the price range of 35-40 million VND/m2, which is considered an affordable price for the majority.

For example, in the National Highway 1K area, the Honas Residence project is offering for sale in the final stage at the price of 28 million VND/m2. Or, at Pham Van Dong street – bordering Thu Duc city, there is an apartment project Phu Dong Sky Garden of Phu Dong Group, which is offering 40 million VND/m2 (VAT included), this price is 33% lower than the apartment price. Grade C households in HCMC at this time.

Before that, there were a number of projects such as Galaxy New, Diamond Connect… with prices ranging around 40 million VND/m2 which also attracted attention in Binh Duong market when meeting real demand.

According to analysts, in May 2022, the new supply of apartments continues to focus on Binh Duong. Currently, the projects are distributed in the city. Di An and Thu Dau Mot, common prices range from 40 to 45 million VND/m2. The rest of the markets: Long An, Dong Nai, BR-VT and Tay Ninh did not record any new supply for sale in the month.

“The supply and demand of the market increased strongly compared to the previous month and the same period, but not really evenly, focusing mainly on a few projects, certain provinces and cities. The primary price level continued to continue. maintained at a high level in the face of increasing input cost pressure.

The record shows that net projects for speculative purposes to accumulate assets that do not attract end users are gradually being replaced by “lit” real estate. Especially projects with standard legality introduced to the market at this stage have a great advantage in terms of demand.

According to Mr. Ngo Quang Phuc, General Director of Phu Dong Group, he advises real estate investors to never forget legal issues. If you go to buy a project from a real estate company, you must ask “Does the project have a construction permit?”. If you go to buy land, you have to look at the red book and bring it to the ward or commune to confirm the real estate status and planning. The last step is to do the service with the notary office to check the legality of the land, the house…

As for Mr. Tran Khanh Quang, a real estate expert, real estate is a product of great value, not bought but invested. Therefore, it is necessary to consider everything, from projects and products to exploitation efficiency. He warned investors “don’t buy orphaned real estate”, which means that the infrastructure cannot be connected, but instead must be “lit” properties, which means that people must come and live. All to calculate the sales force of the product. “If you can buy it, you must be able to sell it, if you can live,” Quang emphasized.

According to Economic Life