Sales of land plots have decreased significantly in HCM City in the last 10 days in districts 2, 9 and Thu Duc, where so-called land fever had broken out over the last few months.
Le Hoang Chau, chairman of the HCM City Real Estate Association, said that according to property brokers in these areas, sales volume had dropped by around 40 per cent compared to the peak period last month.
The land liquidity there has fallen by 60 per cent compared to the previous months. “It’s difficult to predict the status of the market right now,” he said.
Chau attributed the situation to the limited supply of new land plots available for sale. Thus, investors have few choices, while the prices in the secondary market are too high.
Land prices have increased by 30-50 per cent compared to the end of last year and by 100-200 per cent in the past 12-18 months, he said.
The latest development has seen new investors entering the market with caution, while land speculators are finding it more difficult to sell their land plots.
New investors are waiting rather than rushing into the secondary market, resulting in a significant drop in land transactions, according to property experts.
Experts said the current slowdown was a positive sign that was needed to prevent a real estate bubble or crash.
Meanwhile, buyers of housing in which they will live believe that current prices are too high, and therefore they are reluctant to take out bank loans because of the fear of an increase in interest rates.
In addition, sales of land plots in the city’s districts 12, Binh Tan and Binh Chanh have declined recently.
According to a property company which specialises in land plots, the number of successful transactions in these areas has plummeted by 70 per cent compared with the first five months of the year.
The price of land plots in these areas in early January was an average of VND15 million (US$658) per sq.m on Pham Van Hai, Le Minh Xuan and Tan Quy Tay roads, but now has soared to VND25-27 million per sq.m.
The peak time of land transactions occurred in April and May.
Doan Thien Viet, general director of Dai Thang Real Estate Ltd Co, said liquidity had dropped by 50-60 per cent compared to the previous months. Even so, the current price is too high, far beyond the real value.
The Government decision that has made it more difficult to divide land for sale has also contributed to the decline in land sales, according to Viet.
Investors have become cautious in buying big land plots to divide land for sale to secondary buyers.
Nguyen Van Trung, a broker in Binh Thanh District, told Viet Nam News: “Land prices have increased over the last decade, especially in recent years. Now, many investors have begun to sell at the same time.”
Stricter measures from the Government to prevent land fever in to-be-established three special economic zones have also affected real estate investors, he said.
Trung said that land prices in HCM City were expected to stay the same over the next three months or so, and that prices would remain unpredictable until the last quarter of the year.