High inflation, banks tighten lending, real estate market may be quiet but prices do not decrease like 2011-2013
Real estate market 2022 is recovering
High inflation or even when banks make a move to tighten credit, real estate is still an investment channel to attract cash flow. This is also an investment channel that experts evaluate optimistically about a scenario at the present time and in the future.
According to Vietnam Report, the real estate industry and real estate market in 2022 are showing signs of recovery and development with bright colors.
Dr. Dinh The Hien, an economist, affirmed that real estate is still the channel chosen by the majority, and has the most potential. This is the reason that the cash flow into this investment channel is always abundant.
A recent report by Vietnam Report Joint Stock Company (Vietnam Report) also made an optimistic comment about the real estate market. Specifically, according to this unit, after the outbreak of the Covid-19 pandemic, along with the changing movements of the economy, the real estate industry and real estate market in 2022 are showing signs of improvement. signs of recovery and development with bright colors, more positive than in 2021 and gradually returning to the trajectory at the time before the epidemic.
Giving the reason for the growth, Vietnam Report said that the return of the real estate industry is mainly due to companies restructuring operations and recovering from the negative impact of the pandemic. Along with that is the support of economic stimulus packages that the Government, ministries, sectors and localities are actively implementing.
On the other hand, interest rates are still low; public investment capital is being and will continue to be disbursed; foreign investment capital flows also constantly pour into Vietnam; remittances continue to operate stably (except for money from Russia and Ukraine).
It can be said that, in the short term, the Government’s economic stimulus package, no matter which area is poured into, will bring positive effects to the real estate market, contributing to improving the purchasing power of the people. general and created a push to help the real estate market bounce up after a long time of being suppressed. Besides, the expectation that people’s income will improve in the near future will benefit the real estate market in retail or industrial zones.
This report indicates that the soon-to-be-implemented economic stimulus package of VND 350,000 billion, including VND 114,000 billion for the infrastructure sector, is also expected to have a direct impact on the real estate market in the short term. This is also the main growth driver of the market in the coming years.
Worried about the market’s depression
According to Vietnamreport, the concern raised by experts is that if inflation exceeds the target level and lending interest rates rise, it may have the opposite effect, the real estate market may fall into a quiet state. The price level will not drop as sharply as in the 2011-2013 period due to the smoother and more stable regulation of the Government, real estate businesses as well as home buyers will face many difficulties and risks when the proportion of loans for Real estate investment is quite large.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that from the beginning of 2022, although the epidemic was still complicated, the market was active in all regions. This expert carefully forecast, in the long-term, the market will still face many crises, besides legal barriers. Specifically, inflation pushes real estate prices up, so the real estate market in 2022 will be quite harsh. In particular, the influence of the war between Russia and Ukraine will add to the difficulties for the market.
Meanwhile, Dr. Dinh The Hien said that although real estate is still an attractive investment channel, it does not mean that buying real estate during this period will be profitable on a large scale. Especially in areas where land prices have increased sharply in the past 2 years, but those places have not been able to conduct mining business at a popular level.
Mr. Hien added that real estate investment always has a period of slowing down to accumulate value. The time of slowing down is usually the time before the price rises sharply and people pour large amounts of money into it with the help of commercial banks, then meet with a credit squeeze according to the State’s policy. Observation has now met these factors.
“There has not been a sharp increase in real estate prices due to high inflation. As for local increases, local investment opportunities are still available in places where prices have not yet risen sharply, and price-raising factors appear such as planning, make roads …”, Mr. Hien emphasized.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
