Money suddenly flows to real estate

Concern about the loss of money in the bank that many investors poured money into real estate in general and land in particular

This is one of the comments of DKRA Vietnam launched in the report real estate market in HCMC in the first quarter of 2018 just held on April 5 morning.

Risks when land prices increase uncontrollably

According to Nguyen Hoang, director of market research division of DKRA Vietnam, said: Right from the beginning of 2018, the land market in the vicinity of Ho Chi Minh City and the bordering provinces extremely exciting. a series of projects open sale / announced to the market and busy, mainly in the area of ​​Long An, Dong Nai, Binh Duong. This supply will continue to increase sharply in the coming time.

Most coastal land projects have high liquidity, fast delivery speed. This demonstrates the high demand of buyers and the land is still the buyer’s first choice. Most are investment clients (about 70% -80%) because of the expectation of growth potential of land types. End-of-year prices may continue to rise, though not as sudden as in the I-2017, which still generates attractive returns for investors relative to other segments.

DKRA Vietnam considers that there are many direct and indirect causes affecting the creation of coastal land market. The first is the mentality of “land is permanent” still affects buyers. Second, often after Tet is the time to use the results / profits from the production business of the previous year (represented by the reinvestment, business). Third, the profitability of the land segment is always higher than other segments. Fourth land market in Ho Chi Minh City continues to scarce new supply and prices have risen sharply, limiting the number of clients while the bordering provinces with favorable conditions and potential growth. In terms of transportation infrastructure, land prices are low, diversified in terms of investment value and high growth potential. That motivates buyers to seek investment in the coastal land market. Fifth, the regional planning information, the development of transport infrastructure from HCMC to the coastal provinces are also important causes that make this market more prosperous.

Another factor contributing to the psychology of investors is that bank deposit rates are quite stable at average level while some information or adverse events in the banking sector This causes the buyers to choose safe investment channels such as real estate in general and land in particular.

However, Mr. Pham Lam, General Director of DKRA Vietnam, said: “This fever will have dangerous effects if it keeps going and the increase is not controlled. Investing in the ground will push the price level up too high compared to the real value, the price increase uncontrolled may bring the market to repeat the bubble. The focus of investment in land will cause market imbalance. Schools, transactions and financial resources for other segments may be shared, and multiple transactions will lead to market imbalances and stagnant urbanization. “

The wave of investment in the coastal land market will only have a positive impact on the economy under strict control and appropriate conditions. Specifically, the local real estate market will be exciting in the short term, creating attractive development of the type of service attached.

In the long run, this is the premise to form residential areas or new urban areas as satellite for HCMC. This will help relieve the pressure of population, labor, traffic … for Ho Chi Minh City, creating balance and synchronous in the economic development of the provinces bordering Ho Chi Minh City. However, in order to have the positive impacts mentioned above, it is necessary to have the observation and timely response of state authorities, the transparency of all market participants, the efforts of local government as well as investors, cautious and intelligent investors.

Demand for both residential and investment purposes will keep land prices in 2018 going up.

The South will have a strong breakthrough

Although the supply and consumption of the South are not leading the market, the region is generally stable in all segments. In particular, South supply is showing signs of increasing as the I-2018 increased by 10% compared with the fourth quarter of 2017.

Observation shows that starting in 2017, the market in the South has been busy receiving a series of transfer transactions, cooperation … the big crowd of real estate. In addition, the large domestic investors are concentrated in the South and prepared large land funds, ready for the expansion such as Novaland, Van Thinh Phat, Hung Thinh, Nam Long, Kien A Group, Khang Dien …

Expected supply of the South in 2018 will be about 12,000-15,000 apartments and more than 1,000 townhouses / villas. This is a relatively abundant supply, bringing the South to become the most exciting area in Ho Chi Minh City this year.

“The main reason for the wave generation, the South has become a very attractive area for investors and buyers to take into account the impact of the transport infrastructure information being deployed in this area.” – Mr. Lam said.

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