Surfing real estate will be difficult because it cannot be liquid?

Is the real estate market starting to freeze?

According to the statistics of some market research units, in April, the amount of interest in real estate (representing demand) decreased 14% compared to the previous month. In which, the level of interest compared to March in the land plot segment decreased by 18%, private houses for sale decreased by 12% and apartments for sale decreased by 10%.

Not only has purchasing power decreased on real estate trading and exchange forums, but transactions on the secondary market are also slowing down.

According to DKRA Vietnam, although the asking price is still increasing, the liquidity of secondary land plots in Ho Chi Minh City and neighboring provinces has decreased since April, largely due to the move to tighten credit, including projects The project has had books for each background.

DKRA Vietnam forecasts that supply and demand in the next month will continue to decrease in the whole market. The secondary selling price of apartments in the Ho Chi Minh City market in May maintained a sideways trend with a significant decrease in liquidity, largely due to the fact that home loan applications were not approved by banks for disbursement in the month. .

Sharing with the press, Dr. Dinh The Hien, an economist, said that the real estate market has shown signs of deceleration from 2021 when there is no liquidity but prices still increase.

Those signs show that the market has reached the peak of hot growth. Looking at 2021, many people are surprised with the real estate market because normally the market only increases when the economy is strong or cash flow is good.

Some explanations say that many businesses because they can’t do business, they put money into real estate, and people are also bored of doing business, so they also put money into this channel, partly because of fear of inflation.

However, according to Dr. Hi, these explanations have no economic logic. Because when the economy is struggling, whether people have money or not, no one will worry about putting money into a long-term investment channel, which is real estate.

“In early 2022, along with the Ministry of Finance and the Government being fierce in handling some businesses, people will see that in 2021 there will be a virtual financial investment cash flow. And the increase in real estate prices in the past year is not based at all on a sustainable need of investment or use”, Dr. Dinh The Hien commented.

Mr. Hien said that many people are surprised when talking about the current deceleration of the real estate market, even blaming credit tightening. This comment is just a surface, to reassure those who are investing or will invest that, if the State stops tightening credit, the market will increase again.

But in fact, if you look at it in 2021, the gap between the price for speculative surfing and the price you can buy for long-term investment, exploitation, rental or use, etc., is getting farther and farther away. There is no such thing as an investment market where prices just go up forever.

Dr. Hien said that the current real estate market is almost the same as in 2012. After a hot period in the 2009-2010 period, the State Bank reduced the speed and proportion of outstanding loans to the non-manufacturing sector. including real estate, the market immediately faced difficulties. The only difference is that real estate has not seen a sharp decline in prices like 2012.

According to the analysis of Dr. Dinh The Hien, the market is currently “stagnant”, starting to enter the freezing phase. That is, the liquidity dropped sharply, buyers will not dare to buy and sellers are hesitant, do not want to reduce the price much.

However, the frozen market is sometimes more dangerous than a bubble because at that time, those who hold the land cannot sell, and many people fall into empty hands.

Speculation, real estate surfing is “out of time”?

Also according to Dr. Dinh The Hien, it’s not right for many people to use the word “tighten credit” on real estate, because the State Bank is directing commercial banks to strictly implement the loan rate for real estate, not reduce it. ratio.

In the coming time, it is unlikely that the Government will allow credit growth but will continue to maintain the standard credit management and capital inflows into real estate.

“Businesses that have overused capital and over-borrowed real estate speculators will have a hard time. This is just the beginning and the freeze will continue for many more months,” he said. Show forecast.

Looking back at the real estate market in the period 2014 – 2015, thanks to a preferential credit package of VND 30,000 billion of the Government, the market gradually recovered. From 2016 onwards, thanks to good economic development, the real estate market grew continuously.

In 2019, real estate prices were at a high level, but in the period of 2020-2021, despite being affected by the epidemic, prices continued to increase.

This expert said that the above situation has made many people firmly assert that land prices will only increase, not decrease. But they forgot that 2008 had the same opinion and in 2012, the market fell sharply in many segments.

Mr. Hien revealed, currently, many people are still holding the land because they believe that the price will only increase, not decrease. But according to this expert’s survey in some areas, the increase in land prices is mainly due to brokers blowing.