Is real estate investment more successful than stock investment?

The real estate market is not “cheese” for everyone.

Vietnamese people are "crazy" about real estate investment

In the talk show “Investing in real estate during the rising price period” organized by Dau Tu Newspaper, Mr. Nguyen Thac Cuong, Deputy General Director of Mai Viet Land affirmed that real estate is a relatively easy investment channel compared to other channels. To illustrate the above statement, Mr. Cuong said that if there are an average of 10 people investing in real estate and stocks, the success rate in real estate will be higher.

Many investors still have great faith in real estate. Photo: Thanh Vu

“Because real estate is an easier investment channel than other channels, this type of investment receives more attention. In the context of limited supply, while demand and investment desire are always high, the selling price of real estate products also increases," said Deputy General Director of Mai Viet Land.

Mr. Nguyen Thac Cuong's views have many similarities with the opinions of other experts in the real estate industry. Responding to reporters from the Investment Electronic Newspaper - Baodautu.vn , Mr. Pham Duc Toan, CEO of EZ Real Estate Company, said that most Vietnamese people still maintain the mindset of prioritizing "accumulating land and gold".

“In reality, since the 1993 Land Law was enacted until now, land prices in Hanoi have only had two trends: one is stagnation, the other is increase, but there has been no decrease in price,” Mr. Toan commented.

More specifically, Mr. Nguyen The Diep, Vice President of the Hanoi Real Estate Club, confidently declared that over the past 20 years, people who buy residential land have rarely lost money. The safety ratio is even higher for investors who do not use financial leverage. Even beyond the limits of a place to live or an investment, houses/land are also "savings" for children and grandchildren. This is the reason why the demand for real estate is always very high.

Still need to be careful before putting money down

However, Mr. Phan Le Thanh Long, CEO of AFA Group, co-founder of the Vietnam Financial Advisors Community (VWA), said that investing in real estate is not an easy task. This is an asset class that is highly sensitive to economic variables, while over the past 30 years, the market has always fluctuated abnormally.

“If you bought real estate in the suburbs of Hanoi in 2010-2011, you would have had to wait until now to make a profit. Because at that time, prices were pushed up, and then the market fell into a “frozen” state. If you had to wait a long time to “take profit” from your investment, your profits would have been eroded by capital costs,” Mr. Long cited.

Continuing to give examples, this expert said that in 2021 - 2022, for investors who choose the wrong area and segment to invest in, they may not have "returned to shore". The financial losses are even more severe for those who buy real estate in the suburbs.

“In the context of high real estate prices like today, it is not easy for investors to find a niche to invest in. In my opinion, buyers should consider the following 4 factors before putting down their money," said Mr. Long.

The first factor is the time of purchase. Many people often rely on the macroeconomic situation and interest rate fluctuations to choose when to buy real estate. Currently, banks have quite low savings interest rates, only about 5 - 5.5% / year. However, the amount of money deposited in banks is still high, because many people are still hesitant about which area to buy real estate. This concern leads to the second factor when choosing to buy real estate - location.

“Investors should consider which areas have good enough prices and have the potential for development in terms of infrastructure, living facilities, and space for project development. After choosing a location, investors need to consider the next factor: segment, such as apartments, townhouses, land plots…”, Mr. Long shared.

Finally, before "choosing the right person to invest in" a project, buyers need to clearly understand the investor. When the three real estate laws are applied from August 1, 2024, businesses with high caution, good capital mobilization ability and suitable project development are the units that can bring products to the market in a sustainable and legally safe manner.

“If you choose the right time, location, segment and investor, the profit will be guaranteed. Otherwise, investors may have to pay a large amount of money to buy real estate with future value. Then, they will have to wait 3-5 years to start recording profits,” Mr. Long concluded.

Source: https://baodautu.vn/batdongsan/dau-tu-bat-dong-san-co-de-thanh-cong-hon-dau-tu-chung-khoan-d224670.html