At first, though the segment fell into a recession in several provinces and there were few transactions, prices remained firm.
This situation continued well into 2023 when investors started making fire sales to liquidate their assets.
Prices then witnessed a 15-20% year-on-year decrease in the first quarter and a dramatic 30-50% drop in the second.
The downtrend slowed in the second half of the year except in the cases of agricultural lands and large plots, whose prices continued to slide.
The average land listing price in the first three quarters of 2023 was down 26% from the beginning of the year, according to data from real estate trading platform Batdongsan.
Prices were down 30-40% in Dong Nai Province’s Binh Long District, Binh Phuoc Province’s Chon Thanh District, Long An Province’s Ben Luc District, and Binh Duong Province’s Bau Bang and Ben Cat districts.
Besides, developers frequently offered discounts of 20-30% along with low interest rates on three- and four-year loans, according to property consultancy DKRA Group.
The firm also said demand in both the primary and secondary land markets was at an all-time low in the south.
As of December the market had seen an 80-98% year-on-year decline in the number of transactions.
In the first quarter 385 land plots entered the primary market but only 78 were sold.
The figures climbed to 867 and 378 in the second quarter before diving to 271 and 68 in the third.
In the first 11 months only 694 plots were sold, down 85% year-on-year.
Batdongsan recorded 45% fewer searches for all types of lands on its site compared to 2022.
Referring to the market’s difficulties in 2023, Hoang Anh Tuan, CEO of real estate firm MaxReal, said only a few new projects could attract buyers during the year, not enough to revive a market that had hit bottom.
Land was still too expensive from a buyers’ perspective as evidenced by the lack of activity in the market despite the sharp fall in prices, he said.
Vo Hong Thang, head of market research at property consultancy DKRA Group, said the land segment saw few transactions in both the southern and northern regions due to high interest rates at the beginning of the year and the wait-and-watch attitude of investors expecting prices to fall by year-end.
Thang pointed out: “It [land] is a speculative asset with no immediate use. So it is hardly surprising that it suffers the most when the [real estate] market becomes inactive,”
Dinh Minh Tuan, Batdongsan’s southern regional director, said the land segment was much more inactive during the year than forecast.
“Based on our survey of homebuyers’ sentiments done at the end of last year, the land segment seemed to hold the most interest among investors. But in reality, the segment suffered from a lack of buyers and transactions as people preferred to observe than invest.”
Experts expect the struggle to continue in 2024 since sentiment remains cautious.
Credit disbursement for real estate would be slow until 2025 while the amendments to the Land Law are expected to be passed only by the end of 2024, which would then take some time to have an effect and improve the market, Tuan said.
“The land segment will probably be the slowest to recover. It may only start recovering by the end of 2024 or even the beginning of 2025,” he said.