Where the price is “inflated” too high, there will be a small “bubble” burst
Local bubble
Mr. Nam frankly shared at the talkshow Real estate investment in high prices held by the Investment Newspaper: “There are many places that blow prices up to unbelievable levels, those places will definitely burst bubbles. because the infrastructure has not kept up”.
This person mentioned that the land areas in the commune are being auctioned and the “stork” inflates the price to tens of millions of millions/m2 without anything, surrounded by fields, no adequate infrastructure, extremely small roads, no land. there are industrial, tourist and administrative zones.
Recalling the time when the real estate bubble burst in 2011, Mr. Nam said that in 2010-2021 the whole market was crazy, and the inflation was in double digits at that time. For now, we are worried about inflation but inflation is still very stable, interest rates are completely controlled at a level below 1 digit. In addition, the potential of businesses, banks, investors and investors is also different. Therefore, the phenomenon of not being able to carry out the project somewhere still exists but will be less. And I don’t think the whole market will burst, but only at certain points when the price is blown too high, those little bubbles will burst.
Agreeing with Mr. Nam’s view, Mr. Dinh Quang Tuan, Deputy General Director of Dat Xanh Mien Bac said: “There will be bubbles, but local bubbles will occur in a certain market. In fact, local bubbles not only occur at the moment, but for many years continuously the market gives incorrect information, word of mouth about a certain big man coming here to invest, information to build roads. , doing infrastructure, airports… When giving out such information, speculators and investors come back.
In fact, with customers investing there, they also determined to make money in this place, not with a long-term investment perspective. When the market has a problem that the price is too high compared to the actual potential, it will lead to the bursting of the bubble. In fact, when it breaks, the consequences happen to the investors, the ultimate speculator of that market.”
Commenting on the general market, Mr. Tuan said that it is very difficult, almost impossible, to burst the bubble at this time. Only when affected by the macro, micro, world situation, big investors, it partly affects the real estate market, the market slows down a bit. Currently, the market is well controlled by the Government, when there is a bubble, people quit production to invest in real estate, Government securities immediately have a “correction” move. Therefore, there is no bubble bursting at this point.
Why do real estate prices skyrocket?
Mr. Trinh Nguyen Tuan Anh, Standing member of the Vietnam Real Estate Brokers Association (VARS) in charge of the Southeast, Chairman of King Broker Group said that the real estate market operates according to the law of value. Overpriced or overpriced is the difference between the value of the property and the price of the property. The value of real estate is almost unchanged in a certain period of time if there is no change in infrastructure… and the price factor is completely opposite, it changes over time, people, needs demand and scarcity of real estate.
According to Mr. Tuan Anh, such a terrible increase in real estate prices while the economy is down is due to: First, the scarce supply of projects turns to speculation. Second, investors have great expectations for the government’s creation and infrastructure change. The price blowing in some local places is created by speculative “sharks” and a part of speculators and brokers.
“Every time like that, the price increases once, and the local real estate price according to psychology, ie everyone agrees on that price, it will be at that price. It does not follow the law of market growth but depends on the investor’s expectation of profit taking. So, even during the epidemic, from 2020 until now, prices have increased continuously,” Mr. Tuan Anh said.
This position also said that some places actually increase according to its potential, not all places increase wrongly. For example, Binh Thuan has great potential, before the cheap price now increases back to its true value, not everywhere is a virtual fever.
Faced with the situation that real estate prices in many places have been anchored high, in order to determine the reasonable price of real estate projects, Mr. Dinh Quang Tuan, Deputy General Director of Sales and Marketing of Dat Xanh Mien Bac, said that , it is necessary to pay attention to 3 main factors, which are market demand in the project area, price increase motivation, and the price level being traded in the project area.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
