Which scenario for the Ho Chi Minh real estate market in the last 6 months of 2017 ?
The real estate market has gone beyond half of 2017 with much improvement over the same period last year. In particular, the shift of supply from luxury apartments to the popular, land spread fever spread is the focus. What will happen in the second half of 2017?
Comments on Ho Chi Minh City real estate market in the last 6 months of 2017, HCMC Real Estate Association (HoREA) recently said that real estate market will remain in the growth cycle, but the trend has slowed down compared to 2016. HoREA said that in the last 6 months of 2017, there will be a strong shift towards the real estate market which is affordable enough to meet the human needs who have middle income and low-income.
According to Mr.Le Hoang Chau, Chairman of HoREA, the trend of cooperation between enterprises will be inevitable. M & A activity will grow stronger than before, especially after August 15, 2017, the date of the National Assembly’s resolution on the effective bad debt settlement enforce.
“The state will promulgate many legal instruments and use tax tools, credit tools, land use planning tools, administrative tools to bind investors. Protect consumers to regulate the real estate market in order to develop transparent, healthy and sustainable, “Mr.Chau said.
In addition to forecasting that administrative procedures will be more open and simple, gradually reduce the situation of harassment, HoREA said that foreign investment and overseas remittances continue to be important resources. Invest in the real estate market in the near future.
It is noteworthy that the size of the HCM City real estate market has gone beyond the administrative boundaries of the “urban area of HCMC”, especially in the districts bordering the city. At the same time, the business requirements must have a very fundamental transformation, building corporate culture, full accountability of social responsibility and accountability to customers. “The fourth technological revolution, such as the Internet connection, the artificial intelligence and the trend of developing green, environmentally friendly, secure and convenient real estate projects are new demands. Of consumers that investors must meet, “HoREA emphasized.
Besides, there are also some potential risk factors in the real estate market such as supply-demand distortion, a sharp increase in secondary investors, or a supply of credit. There is a tendency to focus on a number of large corporations investing in the luxury real estate sector.
In particular, the situation of ensuring safety and handling of disputes in apartment buildings is more evolving than ever before as more and more people choose to live in condominiums in the process of urbanization.
Regarding the forecast of whether or not there is a real estate bubble in 2017, HoREA said that it is unlikely, due to the timely and effective adjustment and efficiency of the State; Enterprises are also trying to restructure their investment and reshape their products to meet the needs of the market. And because secondary investors are more alert, more market savvy.
A negative factor in terms of subjectivity is the supply-demand deviation in the high-end segment of real estate (including real estate for tourism and convalescence); The situation that some large real estate corporations are receiving large amounts of credit capital and mobilizing a lot of social capital (including many consumers and secondary investors) are also Factors have potential risk factors, affecting the real estate market in the coming time.
It is forecasted that in the period 2017 – 2020 there will be a big adjustment to solve the current phase of supply-demand deviation, helping the market return to the direction of healthy and more sustainable development.
In particular, HoREA noted that the plan to develop a new urban infrastructure system connected more synchronously, first of all roads, metro, overhead rail, fast bus, river bus. This will create a great opportunity for “followers” to invest and develop the real estate market both in the medium and long term.
Review of the highlights of the property market in the first 6 months of 2017
Foreign capital inflows into real estate in the first 6 months decreased: Specifically, the remittances poured in six months reached $ 2.1 billion, this number dropped sharply compared with $ 5.7 billion in 2016. Of which, Approximately one fifth of remittances are invested in real estate, down slightly from 21% in 2016. FDI is currently only $ 2.2 billion, down sharply from $ 11.3 billion earned in 2016.
Real estate sector attracted about 50.3 million USD, accounting for 12.82% and ranking the 4th in attracting FDI, down 2 levels compared with the second position at the same time last year. FDI poured into the real estate sector through the sale and acquisition of projects.
The number of real estate businesses were established and had been increasing steadily: In the first six months of this year, about 18,000 new businesses were established, more than a third of which were real estate business enterprises. This is a sign that the real estate market is still attracting great investment attention.
In addition to market developments, the most notable policy in the last 6 months is the National Assembly passed Resolution on handling bad debts of credit institutions. This resolution will come into effect from August 15, 2017, contributing to the healthy functioning of credit operations, handling assets efficiently that are mostly real estate, creating additional resources for the economy and helping re-launch real estate projects that have been mortgaged or have been suspended for many years.
In addition, the State still maintains credit policy on real estate: According to HoREA, in the first 6 months of 2017, real estate credit growth was 6.35%. Stable interest rates, interest rates for social housing remained at 4.8%. However, due to the implementation of the roadmap for gradually restricting credit to the real estate market under Circular 06/2016 / TT-NHNN, real estate firms have more difficulty accessing new credit.
In general , the real estate market in the first 6 months still implies many risk factors such as signs of deviation of supply and demand, mainly deviated from the high real estate segment. The credit capital of banks and social capital poured into the market tend to focus on some large enterprises and the high-end real estate segment, resort tourism. At the same time, there has been an increase in many secondary business investors, while the segment of the social housing market, commercial housing has high liquidity, “supply” is not enough “demand “.
Above, We has made some information from real estate professionals in the HCMC real estate market in the last 6 months of 2017 as well as some points hit the market in the first two quarters of the year 2017.
Read more useful information about the real estate market in Vietnam at: Vietnam Real Estate Report