(TBTCO) – The real estate market (real estate) is caught between two “storms”, the Covid-19 epidemic and the bank’s credit tightening. This has pushed the real estate segment down sharply in terms of transaction volume and has raised doubts if the disease continues for long, the real estate market may “bottom”.
Real estate has weakened but will recover by itself
Comments on the real estate market in quarter II / 2020 of the Vietnam Association of Real Estate Brokers (VARS) show that the apartment market in urban areas such as Hanoi and Ho Chi Minh City. Ho Chi Minh City continues to have transactions but the number is not much, mostly only in the mid-end and affordable segment because the demand for accommodation is still high.
New supply from real estate projects qualified to enter the market is certainly not much. In some localities, the total number of projects has reached only one figure. Goods offered for sale on the market are mainly pre-existing goods. Housing and land markets will remain the key products in many provinces and cities outside Hanoi and Ho Chi Minh City. Ho Chi Minh. Transactions will certainly decrease sharply compared to the same period in previous years.
Mr. Nguyen Van Dinh – Vice President and General Secretary of VARS said that in the second quarter of 2020, there may still be a “hibernation” status for the resort real estate segment, because this is still the stage that has not ended activities. action against Covid-19. If Vietnam, in June and June, can successfully prevent the epidemic, the resort real estate market will have awakening moves and a restart.
Stating views on doubts that the real estate market will repeat the “bottoming out” scenario as in the years 2011 – 2013, VARS representative said that this will be unlikely because the real estate market has a development cycle of 5. year. Accordingly, real estate has entered a new cycle 2014 – 2019 and the last cycle is 2019, but in the last cycle, real estate has had a hot growth after the crisis bottomed in 2011 – 2013.
“The Covid-19 epidemic is just a drop of water, after this period, real estate businesses weaken but can recover by themselves. Therefore, it should not be too pessimistic for a bad scenario that the market will “bottoming out” as in the period of 2011 – 2013 “- VARS representative emphasized.
Opportunity to screen weak businesses
According to VARS representative, in the context of tight credit and unable to sell products due to epidemics, there have been signs that many weak financial investors have been looking for investors to transfer projects.
The Vietnam Real Estate Market Report of VARS shows that, in the first quarter of 2020, the real estate market is very quiet compared to the same period every year. Supply, transaction, absorption rate were at the lowest level in the past 4 years. Specifically, the new supply for sale is nearly 18,700 products, with more than 8,350 apartments and more than 10,300 low-rise houses. Successful transactions are more than 2,750 products, the absorption rate is 14.8%, only 19.6% over the same period in 2019.
VARS representative said, right in Hanoi and TP. Ho Chi Minh – a vibrant place in housing real estate, also recorded a significant decrease in transaction volume. Specifically, in Hanoi, the first quarter of 2020 recorded only 181 transactions out of a total of 1,167 apartments offered for sale, while compared to the same period in 2019, this rate was 3,141 transactions / 4,654 apartments offered for sale. . At TP. In Ho Chi Minh City, in the first quarter of 2020, there were only 815 successful transactions out of a total of 4,664 apartments offered for sale. Compared to the first quarter of 2019, this rate was 2,613 transactions / 3,040 apartments offered for sale.
With a limited number of transactions, plus the impact of Covid-19, investors and real estate exchanges were forced to postpone project opening activities to avoid crowds of people fighting the disease; Up to now, about 50% of the exchanges have to close, there are phenomenon of many real estate brokers being unemployed.
In the context of credit tightening and unable to sell products due to epidemics, there have been signs that many weak financial investors have been looking for investors to offer and transfer projects in the form of The method of buying, merging or selling shares, or partial projects reduces damage to businesses and this will also be an opportunity for the real estate market to screen weak businesses.