Real estate is the most profitable investment channel in the short term.

Highest return on investment channels

According to data published by the Vietnam Real Estate Research Institute on short-term investment returns in Vietnam from January 1, 2022 to present, real estate is holding the highest rate of return at 14%/year.

Following real estate is the corporate bond investment channel with a return rate of 8.5%/year, followed by SJC gold with 7.36%/year. Traditional investment channels such as savings ranked 4th with a short-term investment return of up to 6%/year. Notably, stocks ranked last with a short-term investment return rate of -20.14%.

Analyzing the investment potential of real estate compared to other channels, the Vietnam Real Estate Research Institute noted that the attractive discount rate in the recent period of the real estate market has helped make real estate an attractive investment channel. The report also recommends that in the medium and long term, investors should consider allocating their capital to investment channels according to their risk appetite, financial capacity, as well as their knowledge and experience.

Real estate is the investment channel with the highest profit rate in the short term, figure 1 — Return on investment of popular investment channels in the past 2 years.

In addition, in this report, the Vietnam Real Estate Research Institute also clearly analyzed the picture of the real estate market. Accordingly, in the recent period, the real estate market has slowed down due to a number of difficulties and obstacles, the most prominent of which are legal issues and access to capital. The Government , ministries and sectors have made efforts to improve the legal environment related to the industry.

Another obstacle is the completion of the amendment of the three most important laws that directly govern the industry's operations, expected to be submitted to and approved by the National Assembly in 2023; at the same time, implementing healthy solutions, making the market transparent, and resolutely handling violations in the past.

The market has many positive signals

According to the Vietnam Real Estate Market Research Institute, in order to support and promote the healthy and sustainable development of the market, from the beginning of the year, the State Bank has directed and requested credit institutions to make efforts to reduce lending interest rates for the economy , in order to accompany people and businesses to overcome difficulties,...

Compared to the beginning of the year, lending interest rates have now decreased by 1.5-2%, many banks have introduced preferential credit packages and expect to continue to decrease slightly in the coming time. This is a very positive signal for the market, because capital costs have decreased and selling prices are more attractive because investors have access to loans with more reasonable interest rates.

With the reduction in interest rates, customers' demand for real estate will improve due to lower interest rates, which will certainly boost customers' demand for searching and trading real estate. In addition, this will create a more positive sentiment for the real estate market and is expected to recover from the second quarter of 2024.

Real estate is the investment channel with the highest profit rate in the short term, figure 2 — Lower interest rates make the real estate market a more attractive investment channel.

Regarding investment options, the Vietnam Real Estate Market Research Institute believes that reputable investors with experience in successfully implementing many projects, with sound financial capacity; projects with clear and transparent legal status, beautiful locations... will have more advantages, will be given priority by banks to reduce interest rates and will be more interested and chosen by customers.

For investors, if the investor's financial condition is healthy and the market outlook is positive, the investor can consider using a leverage ratio of 60-70% (equity) and 30-35% (loan) because the current market conditions change too quickly and unpredictably, we will not be able to predict, especially in the long term of 10-20 years.

“In the current context, investors can consider focusing on real needs such as the apartment and individual housing segments to serve the needs of living, business, renting or long-term investment; especially when real estate prices have been discounted quite attractively in the recent period, now approaching real value,” the report of the Vietnam Real Estate Market Research Institute stated.

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