“Land fever” is crazy, spreading the phenomenon of “virtual interest”
The real estate fever is still spreading in many provinces and cities, which partly creates a difficult situation for the market when people with real needs wait to “cool down”, while sellers hesitate and then “scream prices”. .
According to the Vietnam Association of Realtors (VARS), Vietnam’s real estate market is the most dynamic and dynamic in Asia, with an average growth rate of 15% per year.
The connected infrastructure system is a healthy driving force for the market. Over the past time, real estate prices have continuously increased despite Covid-19. According to VARS, prices fluctuated strongly in many localities, showing that the urbanization process is taking place in balance.
According to calculations by the data processing department VARS, the 9 provinces with the highest price fluctuations are Hanoi, Ho Chi Minh City, respectively. Ho Chi Minh City, Binh Duong, Da Nang, Hai Phong, Long An, Ba Ria – Vung Tau, An Giang, Bac Giang.
In Hanoi, in the past year, the supply of residential real estate was scarce due to the slow speed of project approval. 80% of products offered for sale are inventory from previous years. Apartment prices were stable or increased slightly, while housing prices increased sharply by 20-30%. Local outbreaks of land fever have taken place in suburban districts, especially those with information to the district.
In the southern region, TP. Ho Chi Minh City witnessed a decrease in both supply and demand in the segments of land plots, apartments, townhouses/villas. The east area leads the supply of apartments, townhouses/villas. Suburban districts such as Binh Chanh, Cu Chi, Hoc Mon, and the old district 9 lead the supply of land plots. Although supply is higher than demand, all segments recorded an increase in prices compared to 2020. This trend is forecasted to continue in 2022.
City development. Thu Duc and rapid urbanization have also helped Dong Nai develop strongly. With a strong urbanization rate and favorable location, this market, along with Long An and Binh Duong, are considered as new stars in the real estate market.
Looking at the real estate market over the past time, Deputy Minister of Construction Nguyen Van Sinh assessed: “Real estate prices continuously increase, in which housing, especially in urban areas, is too high compared to the ground level. general income of the people.
Real estate prices in some areas and segments, especially land plots, increased rapidly in a short time due to unclear information on administrative planning from districts and towns to districts and cities; on investment policy on construction of new urban areas, tourist areas, investment in airport construction. From there, it leads to speculators and brokers taking advantage of it to blow prices and make a profit.”
However, the paradox appears when the land price in many places due to speculation and inflated price continuously escalates, far ignoring the affordability of the vast majority of people with real needs. Accordingly, the phenomenon of “virtual interest” occurs, the price increase is only word of mouth while the actual transactions are very few.
Recognizing this fact, Mr. Le Hoang Chau – Chairman of Ho Chi Minh City Real Estate Association. According to HCM City, the land price “escaping” the real value is not consistent with “the law of value, the law of competition, the law of supply and demand” and is not consistent with the reality of the real estate market. become a “double-edged sword” that both damages consumers and can be detrimental to investors because of increasing inventories. Those who want to buy a house can’t buy it, and those who want to sell also find it difficult to sell. In the end, there were not many transactions, and the supply and demand curves were difficult to meet.
“Currently, City. It is almost impossible to find commercial housing projects in Ho Chi Minh City with prices below 30 million VND/m2 of apartment floors. With the price of winning land at the auction of 4 Thu Thiem land lots at the end of 2021 being too high, it could have a negative impact on all real estate market segments, greatly hindering the implementation of the target of reducing House price, first of all, is the goal of developing social housing, affordable commercial housing in the city. Meanwhile, people’s income has not kept up with the increase in real estate prices. Not to mention, after 2 years of epidemic, people’s ability to pay has been dragged down due to broken jobs. Entering the third year, the socio-economic situation has many fluctuations, the price of essential goods increases, the risk of inflation exceeding 4% will occur, then people’s purchasing power will be lower. “, analyzed by Mr. Le Hoang Chau.
In the context of rising real estate prices beyond people’s ability to pay, Chairman of the City Real Estate Association. According to Ho Chi Minh City, old projects that have been “re-sold” many times will not be as attractive to investors as new projects.
Projects that have been handed over to many investors from F0 to F1, F2, F3… will surely inflate real estate prices, at this time people with real housing needs will be extremely difficult to buy. Meanwhile, for new projects from reputable investors, the price will be more appropriate, and people will be more accessible.
“Don’t think that old houses are cheap, many people buy old houses but they are more expensive than new houses if they don’t look carefully. After many changes of hands in investors, house prices will increase. At that time, buying a new house directly from the project investor will be able to receive a more suitable price,” said Chau.
Ms. Do Thu Hang – Senior Director, Consulting and Research Department, Savills Hanoi also said: “Sold projects may not attract investors because of their high prices. New projects will be more attractive, setting prices at a reasonable level for sale in later stages.
Currently, many investors have been “stuck” by buying land in hot flashes, while the development of infrastructure and services has not kept up. The high asking price of real estate, but not easy to sell, is making it difficult for project investors who plan to launch this year. In fact, some adjacent projects and shophouses have offered a selling price that has nearly doubled compared to last year, but it is not easy to find buyers.
Accordingly, experts said, if they do not properly calculate market demand, these investors will create a difficult position for themselves, “can’t move forward, can’t go back”.
“House prices are high, while liquidity is low, investors are easy to fall into the situation of “his stick hitting his back”. Holding goods but difficult to sell, selling without anyone buying will make investors virtual profits. Especially, for investors who are under pressure of bank loan interest, this fact will be extremely disadvantageous,” warned Mr. Le Hoang Chau.
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