Reasons why real estate 'surfing' investors face increasing challenges

WHY REAL ESTATE SPECULATION IS BECOMING INCREASINGLY DIFFICULT REAL ESTATE WITH GENUINE DEMAND TAKES THE LEAD According to Batdongsan.com.vn, Hanoi’s property market in July 2025 witnessed a surge in demand for real estate for actual use. Both sales and rental segments experienced growth in interest, with a 10% increase compared to June 2025. For real estate sales, demand for purchasing homes for residential purposes remained relatively high, particularly for standalone houses and apartments. These two property types led market interest, with standalone houses seeing a 13% increase and apartments a 12% rise, indicating that the wave of genuine homebuyers continues, fostering market stability. Other property types, such as shophouses, villas, and land plots, recorded modest increases in interest, ranging from 3% to 6% compared to June 2025. In the rental market, offices and standalone houses attracted the most attention, with interest levels in July growing by 19% and 15%, respectively, compared to the previous month. Other property types, including boarding houses, apartments, shophouses, and warehouses for rent, saw interest levels rise by 4% to 11%. In Ho Chi Minh City’s market, both sales and rental segments showed increased activity. Interest in real estate in the older districts of Ho Chi Minh City trended upward, particularly in sales, which rose by 11% in July 2025 compared to June 2025, accompanied by a slight increase in listings. Similar to Hanoi, apartments and standalone houses in Ho Chi Minh City also led in terms of interest, with increases of 13% and 11%, respectively. For rental properties, offices and apartments were the two most sought after types, with significant interest growth of 24% and 22%, respectively, in July 2025. Other property types, such as boarding houses, shophouses, warehouses, and standalone houses, saw modest increases in interest, ranging from 6% to 17%. Mr. Dinh Minh Tuan, Regional Director for Southern Vietnam at Batdongsan.com.vn, noted that in July 2025, Ho Chi Minh City’s real estate market showed clear signs of recovery, driven by the convergence of macro and micro factors. Interest levels in many apartment, land, and shophouse projects increased by 10% to 15%, reflecting the return of capital flow and positive investor sentiment. Notably, the high end segment recorded strong liquidity, accounting for a large proportion of transactions, indicating that genuine demand and long term investment continue to hold strong appeal. New supply also improved significantly, helping to rebalance the market after a prolonged period of scarcity. "Infrastructure development and policy initiatives are laying the foundation for sustainable growth. Ho Chi Minh City’s push to accelerate public investment disbursement, implement key projects such as Ring Road 3 and high speed rail, along with positive FDI inflows, has bolstered confidence among both domestic and foreign investors," Mr. Tuan emphasized. Mr. Tuan also observed that the market is entering a phase of selective recovery: areas with strong infrastructure connectivity and projects with transparent legal status will be the focal points for attracting capital. This forms the basis for Ho Chi Minh City not only to achieve short term growth but also to prepare for a more sustainable development cycle in the coming years. IS THE ERA OF REAL ESTATE SPECULATION OVER? Mr. Nguyen Quang Bach, a long time real estate investor in Hanoi, noted that in the past, real estate investors only needed to be bold to make quick profits. However, the market is now highly segmented. Those with long term vision who choose projects with sound legal status and potential locations still have opportunities to profit. But those who still think in terms of "deposit today, resell tomorrow" are almost certain to lose their capital. "Clearly, the current market favors genuine buyers, while speculative investors must accept that the 'golden opportunity' has passed. The trend of holding assets long term, focusing on legal, infrastructure, and utility factors, is the less risky path," Mr. Bach shared. Many experts believe there are three main factors that could gradually eliminate speculative real estate investors. First, stricter credit and legal controls on projects make quick buy and sell transactions more difficult. Second, average loan interest rates of 9% to 11% per year make borrowing for speculation highly risky. Third, market psychology has shifted, with buyers increasingly prioritizing genuine housing needs and long term liquidity, while small investors have become more cautious after many were left "trapped" with illiquid assets. Between 2016 and 2021, during a period marked by numerous "land fever" episodes, investors could borrow short term from banks, invest, and resell within months to earn substantial profits. However, experts argue that this growth was not based on real value but rather on future expectations, coupled with abundant credit and low interest rates. From 2022 onward, as the State Bank of Vietnam tightened credit for real estate and borrowing costs rose amid a global economic slowdown, land fever episodes became less frequent. By 2024 2025, the market entered a deep adjustment phase. The hot growth cycle had passed, and speculation was no longer suitable in a market shifting toward development based on real value. These changes once again confirm that buying for speculation is no longer viable; instead, the focus is on value based, long term investment with genuine liquidity. Dr. Tran Xuan Luong, Deputy Director of the Vietnam Real Estate Research and Evaluation Institute, noted that buyer psychology and behavior have undergone significant changes. "In a market returning to real value, speculative investment is likely to disappear in this phase. Given this reality, combined with lessons from previous periods, investors are becoming more cautious in their real estate purchase decisions. As a result, the market is adjusting toward a healthier and more sustainable direction," Mr. Luong shared.