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Thu Phuong, 35, from Hanoi, has been mulling over what she should do with VND3 billion deposited at a bank. She is wavering between continuing to deposit the money at banks and withdrawing the money to buy a land plot.

As deposit interest rates are predicted to decrease further, she is thinking of injecting money into real estate, but no one can say for sure when the market will warm up again.

Nguyen Van Hau, CEO of Asian Holding, said if depositing VND1 billion at the bank now, one would have VND1.1 billion after three years, but if buying a land plot, one would have at least VND1.3-1.5 billion after three years.

“Before making an investment decision, you need to consider the infrastructure conditions of the areas where the land plots are located. For example, you should find out if there are belt roads, highways, airports and schools in the areas,” he said. 

Hau said Vietnam needs one more year to stabilize the macroeconomy and settle bad debts, and by that time, the real estate market will recover. It is now time to buy land because prices are low, and investors can expect high profits when the market warms up again in the medium term.

“Use your money to buy land with clear legal status and put your ‘red book’ into your coffer. After 3-5 years, when the real estate market recovers, you can sell the land and make money,” he said.

In general, according to Hau, when injecting money into real estate, investors need to have a 3-5-year vision. However, investors should sell real estate one year after the purchase if the profit can reach 30 percent.

Also according to Hau, when the new Law on Real Estate Business takes effect, slated for early 2025, the land supply will be lower which will affect land prices.

Under the new law, not only in special and first-class urban areas, but second- and third-class urban areas, the transfer of land with technical infrastructure in real estate projects to individuals to build housing products is banned.

SGO Homes CEO Le Dinh Chung recommended that investors buy land in suburban Hanoi, which has reasonable prices now, but will see prices increase in the future.

Hong Khanh