Silent "Sharks" Quietly Invest Billions in Land Acquisition

While many financially weaker individuals struggle to sell their investments at a loss, the real estate market sees some "sharks" quietly hunting for affordable land, anticipating a market recovery and future price increases.

After a prolonged period of losses, real estate prices, especially for land, in certain areas are showing signs of rebound. The Q3 2023 real estate market report by the Vietnam Real Estate Brokers Association (VARS) indicates that in Hanoi, land with legal titles and residential properties priced under 2 billion VND has experienced a notable increase in transactions, especially in areas with improved infrastructure or those adjacent to industrial zones, with prices rising by 5% - 7% compared to the previous quarter.

The real estate market sees some "sharks" quietly hunting for affordable land

Alongside the recent real estate market recovery, many "sharks" are discreetly accumulating assets in preparation for a new business cycle. According to Dat, the owner of a real estate office in Hoai Duc – Hanoi, his office is currently searching for dozens of land plots in the areas of An Thuong, An Tho, Lai Yen, Song Phuong, and An Khanh in the Hoai Duc district. This investor expresses the willingness to buy up to thousands of square meters, and if the landowner proposes a reasonable price, the investor is ready to complete the transaction within 10 to 12 days.

Similarly, in the Ha Dong area, for over two months, a group of investors led by Anh has been exploring opportunities to invest in land near the Hanoi Ring Road 4. Anh mentioned that his group has completed several transactions with a total value of up to tens of billion VND. Currently, they are targeting land located along major roads, but negotiations on pricing with the landowners are still ongoing.

Anh believes that real estate prices in some areas near the Hanoi Ring Road 4 are gradually increasing compared to the end of 2022 and the beginning of 2023. Investors' expectations of a real estate recovery and buying at the bottom are driving this trend. Land plots in the Ha Dong area, which were previously advertised at a loss of 10% to 30%, are now experiencing a price rebound, although not as significant as during the land fever at the beginning of 2022. Some investors who held onto their properties from the early 2018-19 period now have substantial profits and are expecting another price increase in early 2024.

Regarding the recent trend of some "sharks" quietly acquiring land in attractive locations, Sy, a real estate investor with over a decade of experience in Ha Dong – Hanoi, mentioned that the continuous reduction of savings interest rates by banks is one of the critical reasons encouraging cash-rich real estate investors to hold onto cash and wait for a new price surge in the future.

However, a recent report from experts at VNDirect Securities Company forecasted that the real estate market would remain subdued in 2024, but the recovery would become more apparent from the second half of 2024 as monetary policies loosen. The report also predicted a possible return of the land fever in the 2025-2026 period.

This research unit also suggests that in the current supply shortage situation

Experts suggest that the real estate market is currently beginning to emerge from the bottom. However, the new growth cycle is expected to follow a "U" shape rather than a "V" shape, meaning it will take about 1-2 quarters for positive developments to become clear.

Meanwhile, VARs' research data also predicts an increase in real estate prices in the coming period. The research report from this entity states that property prices have increased several times over the past decade. In 2021 alone, average house prices grew by double digits, even multiple times compared to the same period. Low-interest rates and record-high inflation are contributing factors to the sharp increase in house prices, but the core issue is the decline in supply.

This research unit also suggests that in the current supply shortage situation, property prices are likely to rise, especially in markets with a shortage of supply, particularly for property types with high demand, albeit potentially at a slower pace than in the previous period.