50% Of High-End Properties Are Bought For Speculation

There is a huge increase in secondary real estate investors buying and selling in the high-end and middle-class real estate segment, accounting for about 50% depending on the project.

On October 21, HCM City Real Estate Association (HoREA) sent a report to the Prime Minister, the Ministry of Construction, the Ministry of Finance, the State Bank of Vietnam and the People’s Committee of Ho Chi Minh City. the first nine months of 2016 and the market forecast for 2017.

According to HoREA, in the first 9 months, the real estate market is still in the growth cycle but there are signs of slowing down and potential instability factors. If not dealt with in a timely manner, it can have a negative impact on home buyers, investors, real estate developers, contractors, suppliers of equipment and supplies.

“The high-end segment of the real estate market is experiencing tremendous growth. Many real estate projects, real estate resorts have signs of oversupply. Meanwhile, affordable housing is very shortage of 1-2 bedroom apartments, the total price of apartments under VND1 billion. Ho Chi Minh City also lacks commercial housing projects for rent from VND1.5 to 3 million per month social housing project, “said Le Hoang Chau, chairman HoREA.

real estate market

About half the buyers of luxury real estate are speculating

From the beginning of the year until now, the HCM City Department of Construction has recognized 47 projects to sell housing in the future eligible for capital mobilization with 24.461 units. In the first nine months of this year, there was a sharp increase in the number of real estate investors buying and selling real estate. under the project.

Foreigners have bought houses in Ho Chi Minh City also mainly for investment. CBRE data showed that 38% were purchased for lease, 21% were bought for resale, and only 29% were for purchase. “Compared to the time of the 2007 real estate bubble, the proportion of secondary business investors accounted for about 70%, the current 50% is also very worrying. The low-end residential segment is attractive to secondary investors because of their low profitability, “said Chau.

HoREA said that the real estate activities in the medium and long term but the State has no mechanism to create medium-term and long-term credit to supply to the real estate market. The State Bank of Vietnam should have a mechanism to determine long-term interest rates for house purchase. Real estate trusts and derivatives markets have not been formed to create capital for the real estate market.

Forecasting, real estate market in the end of 2016 will continue to grow slightly better than the third quarter. The real estate market in 2017 will continue to slow down. However, it is unlikely that real estate will be “bubbly” in the last months of 2016 and 2017.

real estate market

High-end real estate segment is growing.

HoREA proposed to improve the institution, eliminate group interests, overcome the trend of centralized authority to review and evaluate ministries and sectors and give more power to provinces.

“The association proposed to replace the levy on the use of land by the conversion of land use purpose from agricultural land to residential land to ensure transparency. At the same time, the Government should promulgate the land price bracket every 5 years and amend Article 114, the Land Law assigns the full authority for the provincial level to promulgate the land price list and specific land price to suit the reality of the situation. of the locality, “Chau said.

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