From now until the end of 2019, when many infrastructure projects are upgraded and expanded, the real estate market and investors will be very excited. This may create hot land compared to normal development. Ms. Nguyen Hoai An, Director of CBRE Hanoi, made such remarks when talking to CafeLand on the sidelines of a press conference announcing the focus of the real estate market in the second quarter of 2019.
There is no sign of the end of the growth cycle yet
CafeLand: The public is very concerned about the crisis cycle of the real estate market, such as increasing supply, rising prices. According to the HCMC Real Estate Association, the real estate inventory is more than 200,000 products. However, experts say that at present, there is no sign of the end of the growth cycle of the real estate market. What is your opinion?
Ms. Nguyen Hoai An: When talking about the world economic cycle, we know that the world is at the end of the cycle, which means that it is still in the good development stage, there is no sign of slowing down. Demonstrate that France and the US are still keeping interest rates stable, moderate.
Usually when determining the world economic cycle, it can be based on signs such as economic slowdown, rising inflation, underemployment. Currently, there are no such indicators in the US. We are at the end of the cycle but have not seen the end point of the cycle.
For Vietnam, we also see that in the past 10 years, there have been periods where GDP increased rapidly to 7.8%, then decreased to 5.6%. At the same time, all factors related to inflation interest rates also decreased. It is a bear market. Recently, economic growth is recorded at 7%, meaning it is in a good growth cycle, inflation is under management at less than 5%.
Ms. Nguyen Hoai An, Director of CBRE Hanoi.
Particularly for the real estate market, the process is similar to the cycle of the world economy. Vietnam real estate market leveled off in the period of 2011 - 2014; From 2015 onwards, this is a very good, very fast development period, reflected in the new supply increasing rapidly, the absorption rate is very positive. That is the best measurement, showing us no signs of cooling off of the real estate market.
Regarding inventory statistics, I think that each unit has its own method of measurement, so I do not comment on these numbers in detail. However, indicators such as CBRE have launched new supply as well as absorption capacity index shows that the two largest markets of Vietnam, Hanoi and Ho Chi Minh City are still in positive territory. We have abundant supply and very good absorption capacity.
In Ho Chi Minh City, there has been a certain delay recently, but not due to the market but due to administrative procedures that caused the supply to decrease. However, the market still recorded very good absorption capacity, even more than the available supply, causing the price space to increase very quickly.
With Hanoi area, it is a little different. Apartment supply in this market is still relatively abundant and capable of absorbing good quality. However, the prices fluctuated moderately, there was no sudden increase as in reality in HCMC market.
Recently, in some suburban districts of Hanoi and Ho Chi Minh City, the hot land segment has been constantly happening. Do you think this is a sign of market collapse?
Over the past time, the market has recorded a partial land plot segment, especially in certain locations both in Hanoi and Ho Chi Minh City. However, with a growing market like these two regions, this can be considered a relatively normal phenomenon because it only takes place in local areas and in a short time. When there are new sources of information about infrastructure as well as the participation of large investors, the market will naturally have expectations about new prices.
However, to avoid disruption, we need certain interventions such as administrative orders, strict licensing, or credit tightening policies. Those are common measures that the State will use when there is a hot and bubble market.
In the areas of Bac Van Phong, Van Don and Phu Quoc, to control the hot land, the management agency issued administrative orders, requested to stop trading and transfer. However, after the trade ban was reopened, the market recorded a new craze. So, according to her, in the last months of the year, how will the market of these areas develop?
As mentioned, actually the hot land prices is not too rare in recent times. This is one of the signs that the market is developing and its current characteristic is that information is not transparent. However, such phenomena only occur in some local areas or in a short period of time.
In the future, we forecast that there will be similar phenomena when there is information about new infrastructure or new projects being implemented, especially large-scale projects from reputable developers.
From now until the end of 2019, when many infrastructure projects are upgraded and expanded, the real estate market and investors will be very excited. This may cause more or less hpt localized soil compared to normal development.
Bright potential north of the Red River
According to you, in the Hanoi market, which areas will tend to invest well from now until the end of 2019?
In Hanoi, during the past 10 years, the market has focused on developing in the west of the city with 50-60% of the supply of apartments, 50% of the office supply in this area.
With the rapid development speed, so far the land fund in the western area has gradually exhausted, the southern area of construction density is also very high. In this context, the eastern area is gradually emerging with major projects underway.
When the three areas of west, east and south were relatively developed, now, we begin to look at other areas within a 10km radius of development potential, typically north of the Red River.
The north of the Red River has great potential in the future.
The area north of the Red River at this time was less developed than the surrounding areas because it was a later location. However, we can see the advantages of geographical location as well as the convenience of connecting to Noi Bai airport. Therefore, the northern area is a potential location both in housing, logistics as well as other mixed combinations. Some investors as well as investors have been looking to this area to calculate investment problems.
We also hope the northern region market in the next few years will be a vibrant development position. However, the future of this regional market will need to keep track of new projects and new developments.
Can you tell us the current changes in land prices in the proposed areas to districts in Hanoi, including Dong Anh district?
Last time, the Hanoi market emerged hot land in the districts proposed to the district, including Dong Anh. This area after opening Nhat Tan Bridge, Dong Tru Bridge shows that the current land price is higher than a few years ago when there were no bridges.
As for the district to district problem, actually it is more a psychological issue than the nature of investment. Of course, going to the district will bring about impacts related to real estate investment and the potential to attract investment activities in other fields.
However, all of these expectations will not happen overnight. The biggest impact is still the infrastructure. Once there is good infrastructure, it will attract investors as well as large-scale investors. Speculators have reason to expect a higher price level. That process is realized by the level of residents coming in, new office buildings when being established and put into use...
When all of those are available, the price level is the real price. As of now, we have not seen many projects, not many activities as well as many houses or infrastructure conditions are relatively underdeveloped compared to other areas, all transactions are mostly stop at the expectation only.
Thank you grandma!
According to Tam An