Infrastructure 'trap' in real estate investment

News such as Hanoi building another bridge across the Red River and some districts upgrading to districts has caused a stir in the real estate market. However, are real estate prices really hot or is this just a trick of brokers to heat up the market?

Real estate "follows" infrastructure

In September, Hanoi proposed to the Government to build 6 bridges across the Red River and Duong River including: Tu Lien, Thuong Cat, Vinh Tuy (phase 2), Tran Hung Dao, Duong 2 Bridge and Giang Bien with a total investment of nearly 57,000 billion VND, equivalent to 2.6 billion USD.

Dong Tru Bridge connects Long Bien district with Dong Anh district.

These bridges are all located in the East and Northeast of the city, demonstrating the development policy to the East across the Red River (areas of Long Bien, Gia Lam, Dong Anh districts). This information immediately affected the real estate market.

Specifically, market surveys show that land prices in projects in the Eastern region have "inched up". Brokers always rely on information about these bridges to prove the heat of the real estate market in Gia Lam and Long Bien areas, advising customers to buy early for investment. Real estate projects in Long Bien and Dong Anh areas appear more and more.

Ms. Do Thu Hang, Deputy Director of Savills Hanoi Research Department, said: The traffic infrastructure in the eastern area of ​​Hanoi is being improved a lot, not only Dong Tru bridge but also the bridges that are being planned will open up a whole area of ​​infrastructure development.

According to Savills research, the expanding urban core of Hanoi includes Long Bien, Gia Lam, Dong Anh... so it is understandable that these areas are increasingly developing.

However, customers need to wait for more complete conditions in terms of infrastructure, schools or hospitals like the Western region currently has.

"Previously, when Hanoi real estate developed to the West (My Dinh, Tu Liem areas), many people were skeptical that this was really a trend. It took up to ten years to have a developed West area like today. Therefore, the East area cannot develop overnight, it takes time. The East currently has beautiful roads but that is not enough. More social amenities are needed," Ms. Hang analyzed.

Don't invest like the crowd.

According to Savills research experts, investors should always be cautious and consult all information provided by investors or brokers. Many investors have a herd mentality, rushing to buy because they are afraid of being too late and missing out on opportunities. But the past has taught us a lesson. Investing in the crowd and then having to wait a long time without being able to sell because there is a long distance between planning and reality.

"It may seem like a fever right away, but it's not, or there is a fever but it's a fake fever. We always need to be very careful. Information about the bridge construction planning, but we need to find out if the area we intend to invest in is included in any other planning or not. Not everything that has a bridge will develop. We also need to consider the legal factors and prospects of that area," Ms. Hang advised.

Avoid investing in real estate following the crowd to avoid debt. In the photo: An abandoned villa project in Hoai Duc (Hanoi).

In fact, in the current Hanoi real estate market, there is also information that suburban districts such as Thanh Tri and Hoai Duc will become districts. This also affects land and apartment prices in these areas. For example, in the Hoai Duc and Thach That areas, land prices have increased by 20-30% compared to the beginning of the year due to the information of "upgrading to districts".

According to Ms. Do Thu Hang, the reason why some areas have increased prices is because the area itself has been invested in synchronously and systematically, creating attraction for buyers. Investors should not be hasty and "cannot become billionaires overnight like in the past".

Analyzing further, Ms. Hang said that in Hoai Duc there are projects of up to 500 hectares, which have existed since the past and have been abandoned for many years. If you buy, you will face the problem of unsynchronized infrastructure and the project will continue to be abandoned. Price increases may be for residential land, but you have to be careful with project land.

Thus, it is clear that investors need to base on many factors and not follow the crowd mentality when deciding to invest in real estate to avoid having to "hold on to debt".

According to Tin Tuc Newspaper