You Should Be Grateful Or Worried When The Foreign Business Rumbling Poured Money Into Real Estate?

According to the latest data, only in the first five months of 2017, the number of real estates business enterprises has increased by 72.8%, with nearly 44% of the capital increase over the same period last year.

There are many new businesses which appeared in the market such as enterprises outside the industry, foreign investment funds constantly poured capital into real estate. This shows that the real estate business is still the bait that businesses are not easy to overlook.

Pouring money into real estate

In the first 5 months of 2017, the real estate market saw 1,859 enterprises, increasing by 72.8% in enterprises and 43.8% in the capital. Particularly in Ho Chi Minh City, the newly established real estate business accounted for 42.6% (equivalent to 6,599 new businesses) with registered capital of 3636 billion USD. This shows that the real estate business is very attractive in the market and will continue the stability of 2016, even stronger.

Only in the first five months of 2017, the number of enterprises taking part, the capital poured into the real estate market suddenly increased.

At the Prime Minister’s Business Dialogue, which took place in mid-May, the Minister of Planning and Investment (MPI) Nguyen Chi Dung provided data that surprised many people. Specifically, Vietnam only 16% of processing and manufacturing enterprises, the rest mainly in the field of trade, construction and real estate. Data from the Business Registration Office (MPI) also showed that in the first four months of 2017, the real estate business ranked second in the number of newly established enterprises with 1,391 registered enterprises, up 66% over the same period in 2016.

>>>Read more information: Money In The Rush Make The Real Estate Market Excited

Notably, not only ranked first in the number of newly established enterprises, real estate has a strong investment wave from outside the industry to participate. Many enterprises have declared to pour real estate into real estate in the coming time. Specifically, Saigon Seafood Import-Export JSC has announced that it will pour 250 billion dongs into a 20-storey office, commercial and office complex in Tan Binh District in HCM City.

Meanwhile, leaders of Hung Vuong Seafood Joint Stock Company claim to own a land fund of about 10 hectares of land in Tan Tao Industrial Park to build a production warehouse. However, in the current context, this land fund can be used as a real estate project. The project in District 6 of this company will not sell to partners, despite the price of 24200 USD, which is expected to invest in investment projects luxury apartment – commercial center to increase the value of property. Another company specializing in footwear production, Bitis, also said it would invest in apartments to take advantage of its large land bank in the West of HCMC. The project is in the process of completing investment procedures.

The real estate drunken is hard to resist?

Not only the newly established domestic companies poured capital into real estate but foreign capital flows still pounded into this market

Not only newly established companies in the country poured capital into real estate but foreign capital flows are pouring into the market. In the first five months of the year, the amount of FDI inflows to real estate reached 600 million USD, doubling that of 2016. Meanwhile, according to data from the Foreign Investment Department, the first quarter of this year, the business sector Real estate ranked second in attracting FDI into Vietnam, with a total investment of 343.69 million USD. In the first quarter of this year, the real estate business ranked second in terms of attracting FDI into Vietnam, with a total investment of 343.69 million USD. Thus, on average, there are about 2 million USD FDI capital invested in real estate market.

>>>See more: The First 4 Months Of 2017: Real Estate Transactions Increased Well, Inventory Status Continued To Decreased

Speaking on whether many new businesses or foreign funds still rushed into the real estate sector, economist Dr. Nguyen Tri Hieu said that the real estate market is still the bait, the type of goods. Chemistry is always in demand. Not to mention, the real estate market fluctuates frequently, so many people see the potential development, so they jump into the competition. “Real estate is an attractive business area, so many businesses don’t have enough capital to cover expenses have jumped into the market and made some transactions. In these cases, they try to sell the property at any cost so new scams, information lack transparency, leads customers to transactions that are not real. After gaining profits, they withdrew from the market and left behind serious consequences. The people, the economic sectors buying this property is ultimately the bearer, Hieu said.

To limit the situation when too many real estate companies are newly established when they are not qualified, Hieu said that the Ministry of Construction has set up a regulation on the establishment of enterprises. However, the ministry should issue more stringent regulations when issuing licenses to real estate traders.

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