Southern Vietnam Land Plot Market: Current Situation and Recovery Outlook

The Southern Vietnam land plot market is currently experiencing a challenging and quiet phase, despite a modest increase in absorption rates from new supply compared to the same period last year. However, market liquidity remains very low, and short-term prospects continue to look bleak. Internal market factors and a complex macroeconomic backdrop are presenting both businesses and investors with unprecedented challenges, while clear signs of recovery are yet to appear.

In Long An, land plot businesses report a partial recovery in liquidity, reaching about 50-60% of the pre-freeze period in 2022. However, many real estate exchanges are still struggling to sell out project inventory and are focusing on liquidating existing stock. Some exchanges have even had to downsize to adapt to the market's challenging conditions. Although transaction volumes have increased compared to last year, this growth has not met expectations, and financial pressure on businesses remains significant.

Dong Nai also reflects the broader land plot market situation, where transactions are mainly limited to familiar customer segments, while reaching new customers is nearly impossible. Land plot products in Dong Nai are mostly bought by experienced investors with local connections, but attracting new customers remains difficult due to high-interest rates and cautious investor sentiment. Investors have become more hesitant, opting to wait and observe for more optimistic signals from the macroeconomic landscape.

In the secondary market, transactions are primarily focused on projects with land use certificates and proximity to densely populated areas with good service infrastructure and amenities. These advantageous locations offer significant benefits for medium- and long-term investors, especially in areas with robust development plans. However, many plots listed since 2022 have still not sold successfully, even with price adjustments close to initial cost. This reflects the weak liquidity of properties without geographic or infrastructure advantages. Many secondary investors have been forced to sell at a loss to free up capital, but demand in the market remains extremely limited.

According to a DKRA Group report, in Q3 2024, Ho Chi Minh City and surrounding provinces recorded 91 new primary land plot projects, up 11% compared to the same period last year. However, the absorption rate reached only 5%, still far below the vibrant pre-2019 market. Transactions mainly focus on products with completed infrastructure and legal documentation, with average prices below 50 million VND/m² in Ho Chi Minh City and below 22 million VND/m² in neighboring provinces. These products attract interest due to legal stability and prices that align with many retail investors' financial capacity.

Newly launched projects face considerable challenges in attracting customers due to intense competition and investors' cautious attitudes. To stimulate demand, various discount and financial support policies have been introduced, such as monthly payment plans at 1%, 0% interest, and a 10% down payment. Some even offer a free apartment with land purchases to add value for customers. However, these policies have yet to significantly boost liquidity, as investors lack confidence in price appreciation and face difficulties accessing bank loans.

Dinh Minh Tuan, director of Batdongsan in Southern Vietnam, attributes the slow recovery in land plot liquidity mainly to the sharp decline in investment and speculative activity, while actual demand for land plots remains very low. He predicts that this sluggishness will continue through the end of the year, with banks maintaining a cautious stance on lending, especially in provinces that previously experienced rapid price increases. This has directly reduced investors’ access to capital, causing the market to lack vibrancy and significantly reducing demand for investment properties.

Mr. Tuan also highlighted that investors’ cautious, wait-and-see mentality is a key factor affecting the market. The absence of strong drivers, as seen in previous periods, has caused investors to switch to observation mode rather than take action. Many are waiting for government support policies and credit easing to improve access to investment capital.

Conversely, DKRA Group’s Deputy General Director, Vo Hong Thang, is optimistic, suggesting that macroeconomic factors are showing positive signs and that the Southern land plot market's recovery momentum will continue. He forecasts that new land prices could increase by 20-50% compared to current levels, which is a positive signal for investors. Factors like stable interest rates, rising demand for long-term real estate investment, and upcoming major infrastructure projects are expected to drive market recovery. While challenges remain, with support from state policies and macroeconomic stability, the market has the potential to regain momentum soon.

Additionally, adjustments in land pricing tables in many localities are being prepared for release, with expected increases of 20-50% from current prices. This will directly impact real estate values, particularly for residential land plots. This adjustment affects both selling prices and investment decisions for many investors. For those with a long-term vision and investment strategy, this could be an opportunity to re-enter the market, as real estate values have significant growth potential.

It is expected that by late 2025, the land plot market could emerge from its current difficulties, entering a new recovery phase in 2026. However, for this recovery to materialize, consensus among all stakeholders, including investors, real estate developers, and banks, is needed, especially regarding credit easing and increased support policies for investment. Recovery not only depends on macroeconomic factors but also requires synchronized improvements in infrastructure, legal transparency, and most importantly, restoring investor confidence. If these factors are met, 2026 could mark a genuine revival for the land plot market, offering sustainable benefits for investors and the regional economy.