The real estate market in Ho Chi Minh City is still stable, not need to worry about instability
In recent times, the segment of high-end real estate in Ho Chi Minh City has a lot of excess supply. However, many moveers said that demand in this segment is still very much. Should not worry about market instability.
Recently, the market has many warning information streams may happen instability. In particular, the biggest concern is the status of the excess supply of real estate is reported by the Ho Chi Minh City Real Estate Association (HoREA).
These concerns have somehow affected the minds of many investors. However, analysts say that the current market is different from the past. And do not worry too much about the phase difference supply – demand.
Supply never appears without demand
Not suddenly but 2 years of high-level real estate is developed so much. In 2015, according to statistics of the Ministry of Construction has about 38,000 successful transactions of high-end apartment segment.
Research by Jones Lang LaSalle (JLL) Vietnam shows. The number of luxury apartments sold in the period 2015-2017 is 250% higher than the period 2011-2014.
This is the difference of the current market compared to before so investors can rest assured. The reason for inventory and excess of high-end real estate in the period 2009-2012 is due to too many projects implemented that the market demand is still low. Moreover, the market that day also includes the intermediate projects are also labeled high-end projects. Make buyers lose confidence in the market, resulting in inventory.
Therefore, the story of the state divided the area of large apartments into small apartments and for investors selling raw apartments … With the main purpose is to reduce the cost of products and create real estate liquidity.
Therefore, the high-end real estate market is different from the previous period a lot. Investors almost completely changed the thinking of the high-end real estate projects: structure of apartment area, selection of project location, strong investment in the trend of “green”, increase of internal utility , … And the effect is very clear expressed by the high liquidity.
Statistics of Jones Lang LaSalle Vietnam show. In the past, luxury apartments accounted for only 10% of successful apartment transactions in the market. This figure is currently rising to 27% by 2015 and 44% by 2016.
According to Tran Ngoc Quang, general secretary of the Vietnam Real Estate Association. There are 3 most important reasons to encourage real estate companies to invest in the high-end segment.
One is that the economy has stabilized and started to grow. The state is also more focused to develop the real estate market. That is why many investors choose luxury real estate to catch the market.
Second, there must be a bridge to supply. The demand of the people of Ho Chi Minh City for a high-rise house more and more. As their income is increasing, the demand for luxury accommodation is indispensable.
Thirdly, the popular housing is not attractive yet. The profitability of the mid-level projects is not high, so many businesses have not put the segment into the development strategy.
Warning is needed. But not too worried
Increasing supply of high-end real estate recently is too fast. But it is important that the market’s absorption still guarantees the necessary safety. Especially the owners have changed the “concept” and the prestigious projects still create the trust of customers.
Discussing this issue, in many respects from experts, real estate developers to distributors, agrees with the warning. But through market analysis, supply-demand issues do not need to worry.
Tran Ngoc Quang, General Secretary of VNREA, warned that it would help businesses to re-orient their development. And the market also needs to have accurate calculations to assess the situation.
According to Nguyen Dung Minh, Vice General Director of Vihajico, the investor of Ecopark project. Issue a warning as necessary and the investor now needs to thoroughly study the market, customers, product models, apartment value, …
Mr. Minh took the example of Ecopark project of his company. A high-end product, but pioneering in the segment VND1.5 billion, there is almost no competitor. And of course there are no worries about redundancy.
According to General Director of Southern Land Company – real estate distribution unit: Do not deny that high-end apartments in the past increased rapidly.
However, the liquidity of the projects is very large. Thus, it can be clearly seen that the high-end real estate market in Ho Chi Minh City has not had too much inventory.
It is predicted that, in the next few years, the number of people climbing to the middle and trade in the city is very much because of the economy is growing again. Should the number of inventory apartments also will soon be exhausted. Demand for high-end projects will grow.
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