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Buy Suburban Housing And The Potential Risks

Last time the land near the suburbs of Saigon attracted many buyers because of abundant land, cheap price. Although the market is potential for investors, suburban housing is not really attractive products, there are many potential risks.

Saving over VND1 billion idle money, Do Van Dat (District 5) wants to try to invest in housing, however, the current central house price is quite high so he decided to buy land in the outskirts.

Mr. Dat’s target areas are Hoc Mon, Cu Chi and Binh Chanh districts, where the land is diverse and the prices are quite cheap. However, he is very disturbed because this area is slow to develop and way too far suburban.

If buying a house is not convenient to buy land, many people say he must wait at least 10 years to be profitable.

Buy land and the risks

Also intends to invest in buying land and introduced many good plots in An Phu, Cu Chi, Ngo Tat Thanh decided to choose a project in Long An. According to him, although certainly, 7-10 years of land in this area will be very valuable, now he just wants to invest short, cannot hold a piece of land wait up to 7 years to profit.

On the other hand, the Long An area has been planned before, the land here is also low prices compared to the district of Saigon but the opportunity to develop better and investment time is relatively shorter than North West land.

Not only the investors, many customers who want to buy houses to stay are also very disturbed when intending to buy housing in the suburbs. In particular, the biggest problem is the development of service infrastructure and the attraction of the population of the coastal area.

For example, in the case of Hoa’s family, because of financial difficulties, she can only buy a piece of land near Nha Be district. This land is located near a residential area has been planned but quite far from the center.

“I have to take 3-4 years to build a house but look at the infrastructure of this area, only fear of 3-5 years do not know if there are changes, if at that time still not many people live I have to sell for the purpose of buying is to live, so if there is no resident, no essential living utilities, even if construction is not possible to live, “said Ms. Hoa.

In fact, if there is a need to buy, the land in the North West and the Southeast Saigon area is always a good choice both in terms of future development potential and ecological environment suitable for resort and enjoy.

However, if you want to invest and earn profits in the short time this product line is not the first choice.

Therefore, by mid-2015, real estate transactions in this area have been quite exciting, but the purchasing power is mainly from customers who have idle money, investors are not real.

Mr. Vo Tuyen, a real estate broker in the Northwest, said that recently, agricultural land and residential land in the East and South were very good sellers, however, buyers were mostly buyers who wanted to buy, -7 years to live, investors are quite select this area.

The potential of the West is very large, but investors are still targeting areas near the center. For this area can develop as the East, South area at least another 7-10 years.

According to Mr. Tuyen, buying land here for investment is forced to accept the long-term pouring, if buy to invest profitability in 3-5 years should choose the developing areas such as Binh My, Tan Thong Hoi, Tan Phu Trung, Xuan Thoi Thuong …

Talking about this issue, economist Ngo Quy Binh said, for the real estate is hot as today, let money die on a piece of land 10 years of profitability is something that many investors do not choose…

The apartment market still has good liquidity and is very attractive, in addition to projects in the area near the center and the focus in the provinces are still being deployed to expand the options. So the land outside the city center is still only “to save” but not a lucrative slice for investors.

Another problem is that many banks are signaling an increase in deposit rates, causing many people with idle money to return to the safe-haven bank channel and generate continuous income.

While housing supply in the North West is very much, it will be difficult to make sudden changes in prices in the short term, especially in remote communes.

Buy land and the risks

For example, if you spent VND 1.2 billion to buy land, waiting for 7-10 years cannot possibly increase to VND2.4 billion, then send the bank, if only count the lowest profit plan, at least 10 years, capital gains can still more than double, reaching a value of VND2.5 billion is possible.

Not to mention the credit squeeze and the move to increase interest rates on loans of banks that investors have to carefully consider the financial problems, prioritize the product down the investment as quickly recover profits as easy.

As for home buyers who want to settle, the problem of speed of infrastructure development and population planning is a big problem. Coastal urban areas are considered by experts to be affordable but the land is too far from the center, utility life is not guaranteed.

It is important to recognize that the land and housing in these areas have not changed dramatically in terms of infrastructure, although people want to develop, people have to wait for the infrastructure and economic potential to develop.

Fast five years, slow can be a decade or more this area expects a bustling look like East Street or South Saigon. However, if there are idle money, not yet settled and want to buy land to build houses in the future, housing in the suburbs is still not a bad choice.

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