In 2020, the satellite markets bordering Hanoi, namely Bac Ninh and Bac Giang, continuously experienced a fever, with investors pouring into these markets. The land fever in markets bordering Hanoi - where great potential for trade, service development converges and especially industrial real estate has pushed land prices to continuously increase rapidly and strongly in a short time. Many investors have successfully surfed when investing in land in the above provinces during the above period.
Mr. Tran Quang Huy, residing in Trung Kinh (Cau Giay, Hanoi) shared that before that, in May 2021, he witnessed two friends earning a profit of 200-300 million VND after only a few months of investing in land in Bac Ninh. Realizing the attractive profit opportunity, he decided to join the market with the expectation of making a quick profit.
After a period of research, in June 2021, Mr. Huy bought a plot of land in Tu Son for 3.6 billion VND. However, at that time, the total amount of money he and his wife accumulated was only 1.3 billion VND. Having faith in the ability to surf in the short term, the couple decided to borrow from the bank to make up for the missing items.
However, immediately after the transaction was completed, the regional land market began to stagnate, with transactions falling sharply. The number of sellers is increasing while the number of buyers has decreased significantly. Due to a lack of research, Mr. Huy bought the land at a higher price than the general price, making it difficult for the land to liquidate. Entering 2022, the real estate market fell into stagnation, and land liquidity was almost frozen in many areas.
Mr. Huy's plot of land had no transactions, while the bank tightened credit, lending interest rates increased, pushing financial pressure to the peak. Finally, after many months of trying to hold on, Mr. Huy was forced to sell at a deep loss to get rid of the goods, accepting losses to relieve financial pressure.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that when using financial leverage, investors should follow the ratio of 55-60% of equity and 40-45% of mobilized capital. For customers who have not met the above financial ratio, they can consider support policies such as installment payments or installment payments by investors, for project land.
Buyers should also consider interest rate packages because many banks have offered preferential credit packages for real estate loans. In addition, investors should choose to buy land in areas commensurate with their financial capacity. For example, with a small budget of 1-2 billion VND, you should buy land in the suburbs or in developing provincial markets. With more abundant finances, you can choose central areas to spend money.
Mr. Le Dinh Chung - General Director of SGO Homes Real Estate Consulting and Development Joint Stock Company commented that to ensure efficiency and limit risks, investors need to pay attention to avoiding following the crowd psychology. In addition, investing in land at the present time requires a medium-term vision, with a capital recovery period of at least 1 to 3 years, instead of expecting to "surf" quickly.
