The representative of the Ministry of Construction confirmed that there is no “fever” of land, “bubble” of real estate

Real estate prices are opposite to supply

At the seminar themed “Creating momentum to recover the real estate market in the South” organized by investors on the afternoon of April 15, Mr. Nguyen Manh Khoi, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction). In the past 2 years, real estate prices have gone against the supply story. During the pandemic, other costs have decreased, but real estate prices have increased in areas with planned upgrading and upgrading. urban areas, which are expected to enter the cities, especially there are some planned social development plans.

“Many people have raised the issue of land fever, which has increased in many places, but I would like to confirm that there is no such thing as land fever or real estate bubble, although there is a fever point, not all provinces in the North and South have fever and fever. higher than the period of 2008″, Mr. Khoi emphasized.

This position added, real estate prices increased mainly due to low supply and high demand. In addition, money flowed into real estate due to distrust in business investment during the Covid-19 era. By 2022, when the stock and bond markets are under high control, money will still flow into the safe channel – real estate, besides, a part will be poured into production and business because we open the economy. .

Part of it is that the legal procedures have not been removed, there are 3-4 year projects, this situation happened when there was no Covid-19, leading to a backlog of projects. The financial source for the real estate market is not diversified and sustainable, still depends on bank credit, bonds, plus advance money from customers. Currently, the issue of stocks and bonds is tight while corporate capital is not available, so where to get money to do projects. This is being reevaluated for how long this will affect the market; The less the supply, the higher the price, not being careful leads to market distortion.

  A representative of the Ministry of Construction confirmed that there was no land fever and real estate bubble - Photo 1.

Mr. Nguyen Manh Khoi, Deputy Director of Housing and Real Estate Market Management Department (Ministry of Construction).

Mr. Khoi brought up a strange point about the real estate market in the past 2 years that the supply market is decreasing, the demand is increasing, but the investment capital flow has problems, especially the issue of bonds in real estate. produce. Issuance increased but investment in real estate decreased, the number of projects decreased, the number of apartments offered for transactions decreased. Mr. Khoi asked why mobilized bonds increased?

The reason for the increase in real estate in the South

As for the southern real estate market, Mr. Vo Hong Thang, Deputy Director of Research and Development of DKRA Vietnam, said that in the two years 2020 – 2021, the real estate market is quite quiet in both supply and volume. consume. However, there is a paradox that real estate prices in the primary market increased significantly in most segments and localities. The average increase is about 10% – 15% compared to the pre-sale period (6 – 8 months), locally in some projects the increase can be up to 30% – 35%.

Mr. Thang said that there are many reasons leading to the increase in real estate prices. Specifically, the land fund used for project development, especially in the inner city area, is increasingly limited. The legal bottlenecks, new project licensing has not been removed, the project implementation time is prolonged, which increases the cost of documents, procedures and loan interest for project development.

Newly opened supply to the market is increasingly scarce. According to research by DKRA Vietnam, for the apartment segment alone, the new supply in 2021 is only about one third of that of 2017. Most of the products that are sold to the market are polished and positioned by the investor. in the high-end segment.

Land fevers, even local “virtual fevers” in some localities in a short time have pushed real estate prices to new price levels, beyond the ability of buyers with real housing needs.

On the other hand, the increase in the primary selling price is also due to the fact that investors apply many stimulus policies (especially during the epidemic period) such as delaying the payment schedule, supporting the grace period of the loan principal and interest, even cooperate with banks to support loans up to 80% – 100% of product value.

In contrast, for the secondary market, a significant decrease was recorded in many segments. During the time of social distancing, the locally recorded reduction in some segments in some localities was up to 10% – 15% compared to the period before the outbreak. For the apartment segment, in the Ho Chi Minh City market in the third quarter of 2021, the secondary selling price decreased by an average of 3% – 5% compared to the first period of 2021. The decline was mainly concentrated in apartment projects that are about to be handed over or are being handed over.

There are many reasons for the above decrease, of which the main reason is that the prolonged epidemic has seriously affected the economy. Many customers who use financial leverage and income are affected should accept. cut losses, reduce prices, reduce profits to sell to recover capital, reduce interest pressure.

According to Phong Linh

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