In the midst of the pandemic, real estates are still considered a relatively low risk channel of investment, compared to other means such as stock, gold, or Forex. Moreover, as investors can have easy access to cheap capital, real estate prices continue to be on the rise.
According to statistics from several market research organizations, real estate prices have been increasing as of late despite the impact of COVID-19. For example, in Hanoi, prices of apartments have increased in the primary market. According to data from Savills, the selling price of apartments in the primary market averages US$1,625/sq. m., up 7% QoQ and 11% YoY.
Similarly, in Ho Chi Minh City, despite being the center of the 4th COVID wave, CBRE announces that listing price of new apartment projects in all segments have increased in the first few months of 2021 by 14.6% compared to the same period in 2020.
According to statistics from several market research organizations, real estate prices have been increasing as of late despite the impact of COVID-19. For example, in Hanoi, prices of apartments have increased in the primary market. According to data from Savills, the selling price of apartments in the primary market averages US$1,625/sq. m., up 7% QoQ and 11% YoY.
Similarly, in Ho Chi Minh City, despite being the center of the 4th COVID wave, CBRE announces that listing price of new apartment projects in all segments have increased in the first few months of 2021 by 14.6% compared to the same period in 2020.
According to analysis by Mr. Nguyen Quoc Anh, Deputy General Director and Sales Director of Batdongsan.com.vn, at the end of 2020, real estate prices were still kept on a sideway trend, however, by the first quarter of 2021, prices increased steeply, creating a 'land fever' in many places. The reason for this is the unwavering interest in real estates, which has a positive effect on prices. Moreover, the early success in keeping the pandemic under control made the public feel more secure and, in turn, carried out more transactions.
“Especially, during the height of the pandemic, there were segments such as apartments which recorded higher sales than it was before the pandemic arrived. This shows that demand and expectation of buyers in the market is still at a high”, he comments.
“When this wave of the pandemic subsides, real estate prices will increase. It can be seen that price level increased in other countries where the pandemic is put under control through vaccination" Mr. Quoc Anh adds.
Regarding the domestic real estate prices as likely to follow the global upward trend, Mr. Ngo Van, Marketing Director of Danh Khoi Group, stated that in some markets such as the US, Australia, and Europe... as working-from-home becomes the norm, the search for housing starts to pick up pace. Searchers often look for apartments with an area large enough to be able to both live and work. Therefore, real estate prices increased in these markets despite the impact of the pandemic.
Mr. Van analyzes that during the pandemic, real estates are still considered a relatively low risk channel of investment, compared to other means such as stock, gold, or Forex. Especially real estates with legal documents, which further solidify the confidence of consumers in the market.
“We surveyed the market in Quy Nhon, Da Nang, Vung Tau..., which showed no signs of decline. Consumers are still looking to invest in real estates as soon as social distance measures are eased. Therefore, I believe that the market trend in Vietnam will not diverge from the global trend; real estates will hold its price and be a safe channel where people keep their money and trust," Mr.Van assesses.
According to Ms. Le Nguyen Hong Phuong, Brand Director of Tuan 123 Real Estates, pricing did not decrease but rather went sideways and up because each group of real estate buyers has a clear purpose.
“For the group that buys real estates for personal use, the need for a place to live is the first and most basic need according to Maslow's hierarchy. Therefore, even with a pandemic happening, demand for housing still remains and tends to go upwards. People see the real value of their house when the pandemic breaks out, when they cannot find a workspace at the cafe and have to stay home most of the time" Ms. Phuong comments.
As for real estate investments, even though many people consider the pandemic a challenge for this group, 90% of long-term investors indicate that it is rather a great opportunity, Ms. Phuong pointed out. Many people were quick to snap up projects right during the midst of the pandemic. Because of these reasons, real estate prices did not fall, they increased.
In addition, Mr. Do Quy Duy, Sales Director of Hai Phat Real Estate Group, assesses that the impact of the pandemic on the real estate market is very prevalent, especially in the primary market due to the impact of bank cashflows. Mr. Duy stated, the number of disbursement of capital less than 5 billion VND for real estate investments in the first 6 months of the year happened at an exhilarating rate.
“This is a suitable time for investors to make specific decisions towards owning real estates, whether they are buying them to stay or to invest. Investors have waited many years for a time like this, when they enjoy both a psychological excitement about the market, as well as having banks supporting them in accessing loans for real estate purchases", Mr. Duy concludes.
“Especially, during the height of the pandemic, there were segments such as apartments which recorded higher sales than it was before the pandemic arrived. This shows that demand and expectation of buyers in the market is still at a high”, he comments.
“When this wave of the pandemic subsides, real estate prices will increase. It can be seen that price level increased in other countries where the pandemic is put under control through vaccination" Mr. Quoc Anh adds.
Regarding the domestic real estate prices as likely to follow the global upward trend, Mr. Ngo Van, Marketing Director of Danh Khoi Group, stated that in some markets such as the US, Australia, and Europe... as working-from-home becomes the norm, the search for housing starts to pick up pace. Searchers often look for apartments with an area large enough to be able to both live and work. Therefore, real estate prices increased in these markets despite the impact of the pandemic.
Mr. Van analyzes that during the pandemic, real estates are still considered a relatively low risk channel of investment, compared to other means such as stock, gold, or Forex. Especially real estates with legal documents, which further solidify the confidence of consumers in the market.
“We surveyed the market in Quy Nhon, Da Nang, Vung Tau..., which showed no signs of decline. Consumers are still looking to invest in real estates as soon as social distance measures are eased. Therefore, I believe that the market trend in Vietnam will not diverge from the global trend; real estates will hold its price and be a safe channel where people keep their money and trust," Mr.Van assesses.
According to Ms. Le Nguyen Hong Phuong, Brand Director of Tuan 123 Real Estates, pricing did not decrease but rather went sideways and up because each group of real estate buyers has a clear purpose.
“For the group that buys real estates for personal use, the need for a place to live is the first and most basic need according to Maslow's hierarchy. Therefore, even with a pandemic happening, demand for housing still remains and tends to go upwards. People see the real value of their house when the pandemic breaks out, when they cannot find a workspace at the cafe and have to stay home most of the time" Ms. Phuong comments.
As for real estate investments, even though many people consider the pandemic a challenge for this group, 90% of long-term investors indicate that it is rather a great opportunity, Ms. Phuong pointed out. Many people were quick to snap up projects right during the midst of the pandemic. Because of these reasons, real estate prices did not fall, they increased.
In addition, Mr. Do Quy Duy, Sales Director of Hai Phat Real Estate Group, assesses that the impact of the pandemic on the real estate market is very prevalent, especially in the primary market due to the impact of bank cashflows. Mr. Duy stated, the number of disbursement of capital less than 5 billion VND for real estate investments in the first 6 months of the year happened at an exhilarating rate.
“This is a suitable time for investors to make specific decisions towards owning real estates, whether they are buying them to stay or to invest. Investors have waited many years for a time like this, when they enjoy both a psychological excitement about the market, as well as having banks supporting them in accessing loans for real estate purchases", Mr. Duy concludes.
Minh Thư
Infonet
Infonet