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Real Estate Bubbles Causes Great And Dangerous Consequences If It Occurs

According to the news published recently, in the meeting to comment on the development of real estate market in HCM City, Le Van Khoa, Vice Chairman of the Ho Chi Minh City People’s Committee issued a warning: “Watch out. The market is in trouble because of the bubble. This bubble will cause great and dangerous consequences. “

According to Mr. Khoa, the real estate market has experienced redundancy of luxury housing, lack of affordable housing causing serious consequences. Therefore, Departments should have the tools to regulate so that the market does not fall into the above situation.

Real estate bubbles
“Beware of the difficult market because of the bubble. This bubble will be formidable and result in high costs.”

According to HCM City People’s Committee Vice-Chairman, this year, the city has a very strong land price fluctuation with a redundancy of luxury housing, lack of affordable housing. Have to regulate with the right tools to solve this problem. “I suggest Ho Chi Minh City has to develop the real estate market healthy, to find out barriers and overlap that make it difficult for the market. What is government and locality role in solving this situation? So can do well”.

Should be too concerned about the situation of real estate bubble?

Following surveys, many real estate investors are aware of the bubble of the stock market and real estate in 2008. However, experts say that the current situation of the market is not really similar by the time of 2007-2008.

~~>>Update on new information on the real estate news in Vietnam here: Vietnam real estate news

First of all, foreign direct investment into Vietnam in 2014 and 2015 is more stable than 2010-2013 and most of the capital has been deployed in projects. Meanwhile, the amount of investment capital in Vietnam in 2007 tripled in 2005, and even there is three period of price increases in 2008. But most of this capital is not deployed to projects. Although the amount of capital in 2008 was 6 times higher than 2005, the number of projects deployed was only 10% higher. A comparison to show that the current situation is not too alarming as many people mentioned.

Real estate bubbles
The current situation of the market is not really “hot” by the time of 2007-2008

According to JLL’ study, the strong absorption rate in HCM City over the past time is due to the growth of labor in the service sector, which means natural growth, not due to market factor so the price fluctuations are not too bad. Even if apartment prices increase by 30% over the next three years, it is likely that the rate between housing price and income will remain stable, as income has risen by 10% a year over the past few years.

All the predicted fluctuation in the market today is just a warning. And in the short term, the housing market is still stable. Therefore, buyers can still feel secure when buying and selling real estate at this time.

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Real Estate Bubbles Causes Great And Dangerous Consequences If It Occurs
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