Real estate market in 2019 will not have any "bubble"?

According to data of CBRE Vietnam Co., Ltd., a market research and real estate consultancy firm announced on July 9, in the first 6 months of 2019, Hanoi market has nearly 18,000 apartments for sale. In particular, the segment of mid-end and affordable apartments accounted for 98% of total supply in the second quarter, with about 6,000 units.

Despite such abundant supply, the absorption of the market is quite good with 40% of newly launched apartments for sale, equivalent to about 6,900 units. Compared to the same period last year, real estate prices in all segments of Hanoi market only increased slightly, from 1- 4%. Meanwhile, real estate prices in Ho Chi Minh City from the beginning of the year so far have been higher due to the tight supply.

Real estate market in 2019 may not have any "bubble" (Artwork: KT)

Ms. Nguyen Hoai An, Director of Hanoi Branch, CBRE Vietnam Co., Ltd. said that our country's real estate market, especially the two big cities of Hanoi and Ho Chi Minh City, is developing well.

“The indexes we have researched and released are indicators of new supply as well as absorption capacity of the market, these two indexes in Hanoi and Ho Chi Minh City are still positive. The current supply of real estate is plentiful and the absorption is quite good. In particular, in Ho Chi Minh City, there has been a certain delay, but the reason is not due to the market but to some administrative procedures. Therefore, the supply has decreased, but the absorption capacity is still very abundant" – Ms. An said.

Particularly for the land plot segment, in many localities there is a virtual fever phenomenon. The purpose of buyers is mainly to "surf", buying and selling to make a profit, even many people buy and sell with handwritten paper. A series of "ghost" projects in many provinces and cities, including Dong Nai and Ba Ria-Vung Tau, Ho Chi Minh City... are making the real estate market develop unhealthily.

One of the causes leading to this situation is the weak management of local authorities. Besides, investors do not have complete information on infrastructure investment, big investors and urban planning.

In order to limit the negative impacts on the market, the Vietnam Real Estate Association proposed that the Government should take administrative interventions and credit policies for this segment.

Mr. Nguyen Tran Nam, Chairman of Vietnam Real Estate Association commented: “Must control loans borrowed from land. Many small projects of people buy and sell illegally. Without controlling this activity by administrative measures, by credit control, people still borrow money to invest in land plots, which is very inadequate. The first is a legal dispute. Secondly, it is not economically beneficial for the country”.

Economic expert Can Van Luc said that the tightening of real estate credit in the present time is necessary. However, it is necessary to clear other capital flows to create conditions for the real estate market to develop in the future.

“We have had relatively positive capital inflows into real estate. For example, private capital flows. The number of newly established businesses in the real estate business increased rapidly in the last year and this year. Another capital inflow is public investment and the third important capital inflow is FDI” - Mr. Luc said.

According to experts, the real estate market in our country today does not have any "bubble", but it still has many potential risks. Real estate investment habit of people mainly follow the crowd. If there is a new form of investment, quick profit is that many people invest their capital without having an overview and identification of the investment segment that suits them. In addition, the database and information on the market from planning, investor selection, project implementation to real estate transactions are still inconsistent and lack transparency.

According to Thanh Trung