There will be bright spots on credit for real estate at the end of 2019

Financial experts recognized that credit in real estate in the last months of the year will have many bright points thanks to the recovery of macroeconomics and the growth of real estate stocks.

At the seminar "Welcoming real estate stocks, Construction at the end of 2019", Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, said that in the first 7 months of the year, the real estate market was very difficult. Since March 7, 2017, the Prime Minister issued a letter to direct the review of projects using public land nationwide, the real estate market faces great challenges.

In 2017, the real estate market grew by 4% compared to 2016, but in 2018 the market began to decline. In the first half of 2019, the market size decreased by 34%, the number of real estate projects decreased by 29%, apartments launched to the market decreased by 34%. In particular, luxury apartments fell 44%, affordable apartments fell 34%, affordable apartments have no projects.

Also in the first 7 months, the number of projects with investment policy decreased by more than 80%, the number of projects recognized by investors decreased by 82%, the state budget revenue from real estate decreased by more than 60%.

However, according to experts, the aforementioned difficulties of the real estate market have not yet affected the economy, the spillover effect has not been serious enough. In general, the overall market picture will be brighter in the first 6 months thanks to the participation of city leaders, especially with a breakthrough factor.

Specifically, Vietnam's economy has shown signs of good growth. In the first 6 months of 2019, GDP growth reached 6.4%, though lower than 2018 but still close to the 10-year high. Although the real estate market in the first 6 months has slowed down, it has not had a spillover impact on the economy. Policies from the SBV are still very good support for the real estate market rather than tightening. The State Bank of Vietnam is managing the VND exchange rate stability, helping to stabilize interest rates, the inflation rate in the first 6 months was only 2.7%, maintaining the government's target of less than 4%.

The number of real estate projects is plummeting. However, in the second half, credit for real estate will have many bright spots.

Recently, the Governor of the State Bank said that it would loosen credit room, the signal of capital flowing into the corners of the economy showed bright orientations for the real estate market.

According to PhD. Bui Quang Tin, a financial expert, currently the financial policy of capital flows from banks to real estate actually tightens only a few projects and investors, not all. From now until the end of the year, capital flows will continue flowing into the market, from 16-18%. By the end of the year, the capital flow for the market will have many bright points, especially the real estate market.

In addition, Mr. Tin also pointed out the positive point when not being dependent on bank capital flows, as creating opportunities for financial markets to open new channels of capital financing for businesses. Currently, 70-80% of short-term capital flows into the bank, so medium- and long-term loans will be risky. Enterprises can fully raise capital by issuing bonds, or stocks, which is used as a fulcrum for medium and long-term capital instead of depending on short-term capital from banks. In the last 6 months of the year, the market has a good macro-economic foundation, which is an opportunity for development of the stock market and real estate.

Answering the question of which real estate stocks to buy, Mr. Lai Duc Duong, Head of Real Estate Analysis, Rong Viet Securities Company, said that short-term investment should be chosen in the short-term to focus on businesses with good business results in 2019. In the long term, it is necessary to focus on enterprises with the advantage of land fund. Land bank is an important factor explaining why many small, undervalued stocks from previous years soared. Specifically, these land funds are concentrated in provinces outside Ho Chi Minh City, when the Ho Chi Minh City market is leveled off, businesses exploit this land fund, so the value also increases.

Mr. Truong Hien Phuong, Senior Director of CK KIS Vietnam, shared that industrial real estate is benefiting from the process of shifting investment capital into Vietnam. With civil real estate, investors should be concerned about which businesses have a smooth shift to developing segments, which businesses have steady growth. In addition, investors should also choose a time to buy because it will determine 50% success. In addition, investors should also prioritize businesses with open projects and high business results.

However, experts also warned that bonds are not the playground of individual investors but a tool for large-scale businesses.

According to Phuong Uyen