MIKGroup CEO: "Home buyers are deciding the market"


Mr. Nguyen Vinh Tran - General Manager of MIKGroup


“I know that real estate prices in Vietnam are still quite low compared to some countries in the region. Therefore, the story of our house price is reasonable or not is an abstract concept, can not have a specific answer. All decisions now depend on home buyers.”


The above point of view was given by General Director of MIKGroup Nguyen Vinh Tran before the conflicting opinions about housing prices in Vietnam today, in which there are many opinions that house prices are still too high as one of the The cause of the market is less active and at the same time reducing the opportunity to buy houses of many young families.


Talking with us, Mr. Tran said: "I see the psychology of home buyers in Vietnam today is quite open, much more open than before. Recently, many people can accept the price that did not use to be accepted by real estate investors. Now, many people may be willing to spend money to buy houses with prices from 5 to 10 thousand USD/m2 or VND 30-50 billion to buy a villa, this really made us quite surprised. Therefore, we realize that the issue of selling price is not a story that is too important for the real estate market as before. In the market, the segments from affordable to high-end always have a certain percentage of customers, every segment has good liquidity. In my opinion, this is a positive signal for the real estate market.


Does this mean that the income of people and buyers has increased markedly, sir?


Mr. Nguyen Vinh Tran: I think it's not just a matter of income, because people's income comes with GDP growth of the whole economy. The story here is the rise of many factors, including the increased macro indicators, which make people feel much more confident. Along with that, the people's wealth accumulation has also been significantly improved, through which many people have the conditions to improve their accommodation, buy new and more beautiful, modern and spacious houses. There is one more notable point that I hope the early management agency will get statistics on the number of first-time home buyers, because I think this number is also quite large. These are the real potential objects of the real estate market.


In response to the question of the National Assembly delegate at the ongoing session of the house price is still quite high, the Minister of Construction Pham Hong Ha said that, in order to reduce the price, there is only way to increase the supply. In your opinion is this view reasonable?‘

Mr. Nguyen Vinh Tran: Indeed, that is the general principle of the market. With a product in the same segment that has many projects, forcing real estate developers to reduce prices to compete. The reality of the market in the past few years has also happened in most segments. In fact, the market still exists a lot of products with prices ranging from 20 million/m2 to 200 million/m2. The choice lies in the buyer, depending on their needs.


Do you think that rising or falling house prices still depend on the psychology of home buyers?


Mr. Nguyen Vinh Tran: This is a normal thing in the marketing problem of a project. This trend is also a selling tactic of many real estate developers. However, I think that home buyers are now very smart, they understand the market, understand the product and the selling price. They are decision makers so if they find it appropriate, they will buy it. Therefore, for real estate developers like MIKGroup, we always try to create products that suit the tastes and needs of customers, including buyers to stay and buyers to invest, foreigner… To develop a project in the current period requires more factors than before, it does not stop at the price story.


Many people said that the current high house price is because real estate enterprises are still making big profits, even super profits?


Mr. Nguyen Vinh Tran: In fact, the concept of super profits should also be understood very broadly. If a project owner gets five seven hundred billion in profit on a revenue of tens of trillions of dong, that's not super profit. So, for example, an investor can make a profit of a project up to 50%, that is super profit, but if that 50% is only worth 50 billion, it is not really super profitable. A suitable profit margin of a current project is usually at 15%. Therefore, the profitability of real estate businesses now depends on the quantity of products sold or not, not the selling price.


Vietnamese house prices are still low


What do you think about the current price level? Is it reasonable and can it be reduced?


Mr. Nguyen Vinh Tran: As I said, the story is reasonable or not depends on the buyers. But on the investor side, they always have a desire to sell at a certain price in order to achieve the proposed profit, so they will find ways to limit the risks and reduce the expenses and fees in the process of investment and project construction. And the buyer they will see the price of a certain project they can buy it is reasonable. It is impossible to say that a project costing VND 20 million/m2 is reasonable when the project is too far from the center and the quality of reconstruction is too poor. In contrast, there are projects that sell for 200 million VND/m2 but in prime locations, in the center, high quality, for many people it is reasonable. Therefore, reasonable housing prices are an abstract concept, there cannot be a specific answer. In fact, current market decision makers are home buyers, and real estate developers are the only ones who make plans for consumers to decide.


So is it difficult for you to own a house in Hanoi or Ho Chi Minh City today?


Mr. Nguyen Vinh Tran: At present, the story of buying houses in Hanoi and Ho Chi Minh City relates to location and traffic issues. If you want to buy a house at a moderate price, you must buy in suburban areas, away from the center. For example, 10 years ago, housing prices in District 9 were very cheap, but now thanks to the developed transportation and road infrastructure, the price here is quite expensive. Hanoi is similar. Areas such as Long Bien, Gia Lam or the western area like My Dinh and Me Tri... gradually become centers, so they have to go farther.


From the point of view of a real estate business, do you think the current market is worth investing?


Mr. Nguyen Vinh Tran: I think the current market is really worth investing. And in fact, domestic investors are following foreign investors, because they have seen the potential of Vietnam's real estate market many years ago and they bought quite a lot. Vietnam real estate prices are still quite low compared to surrounding markets. I also think that the year-end market will be quite positive, there will be more breakthrough products. We have also experienced market up and down cycles. Currently the market is also quite large, there are many domestic and foreign developers participating, so the possibility of bubbles is unlikely to happen as before when the supply is limited. Along with that, some measures of management agencies also help the market "reduce heat" as soon as there are signs of being hot.


Thank you, sir!


According to Nhat Minh – Tri Thuc Tre