Investors who are afraid to buy real estate now ‘catch the top’, when will they be able to get out?

With nearly 3 billion dong in hand, Mr. Quoc Dung in Hai Ba Trung (Hanoi) is wondering whether to invest in the land as a friend’s advice or just save it in a bank.

“Following the information and also witnessing that a close friend has invested in land in several places, I have seen the price of land increase continuously, there is a piece of land that my friend invested in, the price has doubled in less than a year. I also went with my friends to see a few plots of land and also wanted to invest, but I am afraid that land prices will increase like now if I buy at this time, will there be a risk of ‘catching the top’? Because when the price has increased a lot, it will also have to go sideways or down, which can lead to a loss of capital when investing,” Dung wondered.

Dung’s concern is probably also something that many amateur investors, new to the real estate market, are also questioning whether to put money into real estate at this time or not?

Afraid of ‘catching the top’ of real estate, many investors wonder if they should ‘pour’ money now?

Economic expert Dinh The Hien said that most Vietnamese individual investors understand, know and believe that real estate is the best investment channel in the last 20 years and at least in the next 10 years. This has not changed.

In 2021, the stock market increased by 37%, the amount of money in securities was very large, but Mr. Hien affirmed that the amount was still nothing compared to the amount of money people poured into real estate. In the last 10 years, the Vietnamese dong has kept its value very well. Because the Vietnamese dong kept its value well, the dollar and gold exchange rates did not increase much. Only in volatile years because of epidemics and wars such as 2021 and early 2022, will the gold price increase. While bank interest rates decrease, real estate prices are very likely to decrease, but only increase steadily; This makes many people interested in real estate investment.

“Real estate investment in 2022 needs to be careful because many price zones have ‘push’ strongly, land investment needs a choice, ‘surfing’ is no longer easy,” noted Mr. Hien.

However, according to this expert, if you take the time to observe the land you plan to buy to see how far the land is from the working area, industrial park, or how far away from the residential area with trade and town. .. if it is reasonable, that land can be invested.

Suggesting potential investment areas in 2022 in the South, Mr. Hien said that the Southern and Western key economic zones are still areas where real estate investment can be made.

In addition, when it comes to investment capital, Mr. Hien said, the source of capital with the lowest cost is considered the best source. If the bank loan is in the 8-9% interest rate range, it is a good source of capital. Up to 70% of land loans are borrowed by investors, which is the maximum threshold that can be borrowed in the banking and financial structure. However, deciding how much to borrow from a bank to buy a real estate product needs to be based on the liquidity of real estate, cash flow and the ability of each person’s safe and steady income.

According to Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam, the housing supply in Vietnam in the coming time is still very limited, so a reduction in real estate prices is very unlikely.

Further analysis, Mr. Khuong stated, in Vietnam, although from 1975 to now, the economy has also experienced a number of events such as the crisis of 1997-1998, 2007-2008, 2011-2012 and most recently the period 2020-2021. Only in the 2011-2012 period, real estate prices in the whole market decreased by 30% because investors used too much financial leverage at that time. The rest, the fact shows that after each economic crisis, real estate prices increase.

Therefore, Mr. Khuong recommends: For investors, before deciding to put down money, it is necessary to pay attention to the price and legality of real estate. For investors who intend to sell real estate at this time, it is necessary to carefully consider the purpose of the money after the sale of the property. It will be reasonable if this money is invested in more effective investment channels in the context of the epidemic and international political instability.

According to Minh Thu