Property prices expected to rise 10 per cent in 2021

HÀ NỘI — Real estate prices in  二0 二 一 are expected to increase by  一0 per cent over the previous year, said Nguyễn Văn Đính, deputy general secretary of the Việt Nam Real Estate Association (VNREA).

Đính told a forum held yesterday that the COVID- 一 九 pandemic affected the real estate sector, causing weakening demand in the market. In early  二0 二0, the market was frozen. The Government has taken many measures to untie the sector’s difficulties such as the promulgation of legal regulations for condotel development. However, legal obstacles have hindered supply, creating double difficulties for the market.

In the second half of the year, although there were two waves of the pandemic, the property market still showed strong growth as there were  六0,000 new housing products supplied to the market, equivalent to  六 七. 五 per cent compared to  二0 一 九. The market has recorded impressive numbers as the absorption rate in HCM City reached over  八0 per cent, while prices in many localities increased. Tourism real estate still increased strongly despite the pandemic.

“ 二0 二 一 will not have a risk of a virtual crisis or a bubble, but develop sustainably. Infrastructure projects with good business opportunities will become attractive forces. Real estate investment will spread to mountainous areas. In addition, the bank interest rates that could be maintained at  二0 二0's levels will lead to stronger investment stimulus,” he added.

Finally, movements from the Government in  二0 二 一 would remove difficulties for the market. Stronger FDI inflows would be the impetus in the real estate market next year.

Nguyễn Thọ Tuyển, chairman of BHS Group, said property prices would continue to rise in  二0 二 一.

“Real estate prices are a “marriage” between supply and demand. While the supply is very scarce, foreign investors enter the market with billions of dollars in deals in Hà Nội and HCM City. In terms of demand, individual investors pouring money into the market even exceeded  三0 per cent as mentioned in some studies,” he said.

In particular, at present, big investors in the market, mainly from Ha Noi and HCM City, are in a state of capital preservation. They made big profits and withdrew from Đà Nẵng, Nha Trang and Phú Quốc markets before the market plunged. Their capital is waiting to be invested.

Trịnh Văn Quyết, FLC Group’s chairman, said in the  二0 一 一- 一 二 period, the real estate market entered a period of oversupply.  二0 二0 was a crisis of supply shortage. However, in the last five months of last year, the market witnessed many positive signs. 

Taking the example of FLC's project in Hạ Long, all apartments with unfavourable locations out of  二, 五00 shophouse apartments were sold with prices rising by  五0 per cent. Inventory was completely liquidated. Investors think the worst is over.

However, experts all agreed that institutions are still the biggest bottleneck blocking the growth of the real estate market. Legal documents such as the Land Law, Construction Law and Investment Law have not kept up with market development requirements.

Lê Hoàng Châu, chairman of HCM City Real Estate Association (HoREA), said legal bottlenecks should be removed for real estate development in Việt Nam, because all firms want a fair, open and healthy business environment.

‘The year  二0 二0 marked a strong change in the construction of the legal mechanisms when the revised investment law and construction law were passed, solving many difficulties,” he said.

“I think that the property market in  二0 二 一 will continue to develop because Việt Nam has controlled the COVID- 一 九 pandemic. The Vietnamese economy also saw positive growth. Next year, the Ministry of Construction will focus on revising the Housing Law, and some decrees on old condominiums to facilitate businesses participating in the development of this type of housing. But we should also pay attention to legal risk prevention and control in the financial sector, as well as corporate credit,” he added.

Đặng Hùng Võ, former deputy minister of Natural Resources and Environment, warned that if management is not good, it will cause bubbles in the market. At this time, many real estate providers are in stock, but are waiting for prices to increase in the next few years.

“In  二0 二 一, revising laws to fill gaps and get rid of overlapping rules is the most important thing we need to do,” he added. — VNS