Low cash flows drags land sales down

Nguyen, a land broker in HCMC’s Nha Be and Binh Chanh rural districts, said he made no successful transaction in the third quarter after securing four in the second.

“Potential buyers are remain cautious even after land owners lower selling prices by 5-10%, while some others find it hard to access loans,” he said.

Another broker named Han said land sales in the city’s Cu Chi rural district declined over 60% in the third quarter against the beginning of this year. Land sales started to drop in the second quarter, he noted.

The manager of a real estate trading floor in the southern province of Long An, who did not want to be named, said the number of successful land transactions in areas bordering HCMC, like the province’s Ben Luc rural district, decreased significantly in the third quarter against early this year.

The number of buyers registering to buy land but yet to make a payment declined by 70 percent.

“Third quarter disbursement of bank loans to buy real estate decreased by 90% against the first quarter of this year, causing market liquidity to drop,” the manager explained.

Real estate service provider DKRA Vietnam said third quarter supply of new land plots in HCMC and the southern provinces of Long An, Dong Nai, Binh Duong and Ba Ria Vung Tau declined by 65.6% against the previous quarter.

Meanwhile, the absorption rate was some 52%, the lowest quarterly level since the beginning of this year.

According to data compiled by real estate listing platform Batdongsan, Q3 interest in land plots nationwide decreased by 29% against early 2022. The number of searches for information about land in the southern province of Binh Phuoc went down by 53%, and that in HCMC’s Binh Chanh and Cu Chi districts by 19-46%.

Nguyen Loc Hanh, general director of the Asia Gem Real Estate Investment Joint Stock Company, said the decrease in land transactions in the primary market was mainly due to a lack of cash flow, while trading in the secondary market had became weaker due to low market sentiment, with many potential buyers adopting a wait-and-see attitude.

The land market’s liquidity is likely to continue to decrease in the last quarter of this year, he said.

Several land brokers that VnExpress spoke to confirmed this, saying tightened bank credit and a wait-and-see attitude could see liquidity in this real estate segment drop further in the fourth quarter.