Scramble to buy properties begins on fear of missing out as prices rise

With amendments to the Land Law, Real Estate Trading Law and Housing Law set to take effect next month and drive up real estate prices, she has even asked to switch to the morning shift in office so that she could go house hunting in the afternoons.

After viewing numerous townhouses and residential lands costing VND4-5 billion (US$158,000-197,000) in Districts 12 and Go Vap, she found two that matched her preferences and budget.

“I am afraid that when new regulations come into effect, home prices will rise,” she says.

Pham Trung Tin, a construction engineer working in Binh Duong Province that neighbors HCMC, has intensified his search for old apartments in Di An City since late June.

He started looking for something costing less than VND2 billion in February but did not take it seriously at that time.

He is in a rush now since he fears he will miss out on an opportunity to buy an affordable home.

“Prices might not rise immediately in August, but they will likely go up over the year,” he says.

Phuc, an experienced real estate speculator in Dong Nai Province, is also looking to buy land plots in areas neighboring HCMC.

He hopes to cash in on them for substantial profits once prices rise due to the new regulations.

According to the director of a real estate brokerage in HCMC’s Thu Duc City, many people have been eagerly searching for real estate since late May out of fear that prices might rise once the new regulations take effect.

Townhouse and residential land deals have been closed very quickly in the past month, unlike earlier in the year when buyers were hesitant, he says.

This mentality has led to a sharp rise in property transactions. According to the Ministry of Construction, more than 253,000 real estate products were sold in the first half of 2024, a 10.26% increase from a year ago.

Data from property consultancy Savills Vietnam shows that the absorption rate of apartments in HCMC in the second quarter jumped sevenfold from a year earlier.

In the first half nearly 70% of real estate transactions involved apartments, it says.

CBRE Vietnam, another property consultancy, says the number of apartments sold in Hanoi in the second quarter was up five times from both the previous quarter and a year earlier.

Le Dinh Chung, a market researcher at VARS, says speculators might take advantage of the surge in interest in properties to inflate prices, causing a bubble.

He says buyers should consider carefully before making purchases instead of acting out of “fear.”

Le Quoc Kien, a seasoned investor in HCMC, notes that prices will rise only in certain segments when the new regulations take effect.

Prices of townhouses in well-established residential areas are stable and less likely to be affected, while those of apartments and agricultural and residential lands are expected to increase gradually, he reckons.

He expects prices to remain mostly steady for the rest of the year, giving prospective buyers plenty of opportunities to find properties.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan, says that while the new policies are expected to drive up prices, they will also better protect the rights of property buyers, especially those who buy for their housing needs.