Paradoxical real estate prices increase but liquidity does not increase, revealing a local bubble
According to the real estate market report in the first quarter of 2022 of the Vietnam Real Estate Brokers Association (VARS), while the business and service industries in general face many risks, especially after the unexpected events of the real estate market. In geopolitics, Vietnam’s real estate is still the market attracting significant cash flow. Real estate also rose to second place (in 2021, real estate ranked third) attracting foreign direct investment, reaching nearly 600 million USD.
Real estate M&A value in the first quarter of 2022 is the highest in 5 years, according to Cushman & Wakefield’s report on investment capital market in the first quarter of 2022. In the first 3 months of the year, real estate businesses spent nearly 1 billion USD to acquire projects, nearly equal to the number recorded throughout 2017 and 2018.
The first quarter of 2022 also witnessed a local land fever in some localities with infrastructure planning information such as airports, industrial parks, roads and bridges… This phenomenon is being rectified by the authorities. , in order to ensure a healthy and efficient market development. Some of the main reasons that make real estate an attractive investment channel include:
Firstly, Vietnam’s infrastructure is being improved day by day, especially in big cities like Ho Chi Minh City, Hanoi and neighboring provinces and cities. Highways as well as connecting roads, airports… are creating a new face for the country. In the real estate value structure, infrastructure plays a significant role, in addition to the intrinsic value of that property.
Second, public investment is expected to be the driving force behind the economy in general and the real estate market in particular. According to the report, the Ministry of Transport in the first quarter of 2022 disbursed nearly 7,500 billion VND for important infrastructure projects across the country. It is expected that the ministry will disburse about VND 50,300 billion in 2022, focus resources, drastically direct to accelerate the progress of key infrastructure projects, strengthen regional, inter-regional, regional connectivity, international, especially important traffic infrastructure works such as the project to build a number of expressway sections on the North-South East route in the period 2017-2020; My Thuan-Can Tho expressway project; Long Thanh international airport; soon put into operation a number of urban railway lines in Hanoi and Ho Chi Minh City.
Third, a support package of nearly 350,000 billion VND, of which nearly 114,000 billion VND is for infrastructure projects, 110,000 billion VND is for preferential policies for businesses, which will create a total force to help the economy recover and improve soon. improving the purchasing power of consumers, thereby promoting the sustainable development of the real estate market.
Fourth, Vietnam is considered as a country that maintains a good growth rate, has a stable political and social situation for a long time, creating a remarkable competitiveness of the Vietnamese economy. Foreign direct investment, in which the real estate segment has grown steadily in recent years, is a clear proof.
According to VARS, Vietnam’s real estate market is the most dynamic and dynamic in Asia, maintaining an average growth rate of 15% per year. Real estate is forecasted to have a very positive outlook in the next 20 years due to the fact that urbanization is still low and is taking place strongly, the economy maintains a high growth rate, and basic infrastructure is still abundant. room for growth.
Real estate prices continue to increase despite the Covid-19 pandemic, the Brokers Association said. The reason is that the process of forming new cities is driving the price increase process; supply shortage leads; safe haven money flows; expect the stimulus package.
The price volatility fluctuates strongly in most localities, showing that the urbanization process is taking place in a balance in all localities. The connection infrastructure system promises to be a healthy driving force for the market.
According to VARS, the signals from the market showed that a local bubble appeared. Land prices in different areas increase according to projects. House prices increased, but liquidity did not increase commensurately. However, prudent credit policy has kept the market stable overall. Authorities are focusing strongly on the same institutional framework and legal corridor.
Regarding resort and tourism real estate, VARS said that this is an attractive bright spot for investment in the context of the pandemic. Especially, the products have full and clear legal status, meet the conditions and standards of the tourism and resort environment, are well invested in infrastructure, have a convenient traffic location, and are well invested. invested by highly reputable investors in the market with a relatively good absorption rate. There appeared a number of housing projects used in the form of tourism – resort with a stable absorption rate (about 30-40%) per offering while the remaining projects still had low transactions. .
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
