The more the paradox stabilizes, the more house prices rise

Difficult to “hold the reins” of house prices

CBRE Vietnam’s Hanoi housing market report in the first quarter of 2022 shows that the average selling price in the primary market in the quarter was at $1,655 per square meter (excluding VAT and maintenance fees), an increase of 13%. year-on-year and 4% quarterly. In which, the mid-end segment recorded the strongest growth year-on-year, at 16% due to the upgrading of the positioning of urban projects.

On the secondary market, the average selling price was 1,278 USD/m2, up 9% YoY – the highest increase in 5 years. High-end projects in central districts such as Hai Ba Trung, Ba Dinh, Dong Da and Tay Ho recorded price increases higher than the market average, by 10% or more year-on-year.

Over the years, house prices in Vietnam have been steadily increasing. In Hanoi, the GRDP per capita in 2021 will reach about 5,420 USD, equivalent to 123 million VND and if following the principle that each couple or individual should not spend more than 1/3 of their income on buying a house, one couple Husband and wife in Hanoi will need more than 37 years to be able to own an apartment costing 3 billion VND.

According to Mr. Giap Van Kiem, Chairman of AVLand Group, the continuous increase in real estate prices comes from many factors, of which investment culture is one reason when many people still choose real estate as a haven. , especially in the context of rising inflation. Along with that, the rapid population growth also makes many investors, even those with real buying needs, want to accumulate real estate because the scarcity will definitely push the price up, so the sooner you buy it, the sooner. the more beneficial. In addition, the promotion of public investment, especially in infrastructure projects, has created a positive price appreciation effect for real estate where infrastructure projects pass.

“Real estate does not have a peak in price and will increase over time, so despite many policies and solutions to stabilize the market, the price increase is difficult to avoid”, Mr. Kiem said, adding that the Government is doing a very good job in regulating the market by controlling money sources, tightening real estate credit, limiting the subdivision of plots for sale… These things contribute to making the market more transparent and developing more sustainably. . Therefore, instead of worrying about the price increase, investors should look at the positive side when the market has more safe and effective products.

“Investment believers” are still passionate about land

From another perspective, a representative of a real estate – construction business in Hanoi said that management solutions to make the market healthy are essential, however, even for this purpose, when the implementation and implementation also need to be carefully considered. For example, the property tax on the second home at the moment is not appropriate, even the purpose of reducing house prices may not be achieved, but it affects the market.

“Real estate is a field that is related to many other industries, creating many jobs, jobs and resources for society. If tax is not careful, it will make it difficult for the business community, as a person to become a real estate agent. people panic, fear, causing ‘backfire’ and affecting local revenue, financial system and economy”, the representative said.

According to Ms. Nguyen Thi Bich Ngoc, founder and general director of Sen Vang Group, the market is still in a hot development stage, regulations and information released such as tightening real estate credit are mainly for homeowners. Large investment, large cash flow, and at the moment, the group of small investors with available money is still searching for new markets, so in the next 1-2 months real estate prices will still increase due to demand. from the bull market, especially from individual investors, can even make the market hot locally.

Assessing the policy impact, Ms. Ngoc said that the demand stimulus policies of the State caused a large amount of money to be pumped into the market, so the move to tighten credit to avoid the demand stimulus money flowing into real estate is a must. necessary, although not easy.

“It is forecasted that in May the market will have many fluctuations, but products that follow the model of value and have real cash flow will still bring profits to investors. Moreover, the difficulties will not last long, when 2023 is said to be the time when the market enters a more sustainable growth phase, thereby creating more favorable conditions for the product line of real value,” said Ms. Ngoc. and shared that, then, the products of land plots in the suburbs, land near the well-planned area or condominiums, resort real estate will be positive in both supply and demand.

Particularly for F0 investors, according to Ms. Ngoc, legal products that are incomplete, do not bring real value, and are not associated with good planning of that area should be avoided. In particular, it is necessary to avoid using leverage of more than 30% for all product lines.

Mr. Do Quy Duy, Sales Director of Hai Phat Homes, said that the market size in the period 2022-2025 is four times larger than the period 2010-2015, so the current supply has not met the market’s demand. Accordingly, cash flow will follow two trends: Firstly, optimistic investors will prioritize choosing real estate in localities with good growth potential with housing projects in prime locations. and the cost is still reasonable. In addition, resort projects with long-term legal ownership will also be the choice of this group of investors when supported by preferential policies from investors.

Second, safe investors will focus on products in the suburbs or inner cities of big cities with certainty of liquidity such as Hanoi, Ho Chi Minh City… However, the growth potential of these products This will only be average because there has been strong growth before.

Ms. Pham Ngoc Thien Thanh, Deputy Director of Market Research and Development Consulting Division of CBRE Vietnam, assessed that the investment trend in suburban real estate has appeared for several years now when supported by commercial premises. low bank interest rates and good liquidity. However, investors should note that, with the urban area model, the more products offered for sale in the primary market, the more intense the competition in the secondary market will be.

“In fact, in the same urban project, it is possible that in different subdivisions, there will be different handover conditions and different product positioning, so secondary buyers will have a lot of choices. chosen, therefore, the profitability of these projects may not be as good as that of individual projects”, said Ms. Thanh, and shared more, about the product, a one-bedroom apartment can be used for one bedroom. Some investors prefer it because the investment costs are not much, but the liquidity of this product needs to be carefully considered, depending on the characteristics of the population in that area. Currently, the product lines of apartments on the market are mainly designed with two bedrooms because it is the product that is most interested by many people.

Over the past 10 years, Hanoi has had many changes, in which housing has never been a hot topic. In 2010, Hanoi had about 6.6 million people, the GRDP per capita was 37.5 million VND, the average price of the apartment segment fluctuated between 15-20 million VND/m2. By early 2022, Hanoi has more than 8.5 million people, GRDP in 2021 is at 123 million VND and the average price of the apartment segment is over 38 million VND/m2 (excluding taxes and fees).

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