Real estate stock prices are expensive or cheap, should I invest?

Recently, the real estate market has continuously received a lot of positive information. Most recently, the Prime Minister directed the Minister of Construction to urgently develop and complete draft documents detailing and guiding the implementation of laws, especially regulations on procedures for implementing commercial housing projects, social housing projects, and new urban areas to ensure that they take effect simultaneously with the laws and avoid legal gaps.

The Prime Minister requested the Governor of the State Bank to direct commercial banks to research and have special credit promotion policies for feasible real estate projects and to speed up the disbursement of the VND120,000 billion social housing credit package.

This information, along with many other supportive and regulatory policies that have helped to clear capital flows and legality in the real estate market, has led to positive developments in stocks in this sector since the beginning of the year. Some stocks have increased sharply, even doubling, despite fluctuations in the market and the economy .

Sharing with Dan Tri newspaper reporter, Mr. Nguyen Anh Duc - Director of Institutional Securities Services, SSI Securities Company - commented that from February and March until now, real estate stock prices have increased very strongly, but this is also reasonable.

Mr. Duc explained that from the end of last year to the beginning of this year, the story of corporate bonds was quite painful and risky, which could lead to systemic risks such as mass bankruptcies if the Government did not intervene. The solvency of real estate enterprises at that time was very poor. The market reacted very strongly to this news, and real estate stock prices also fell sharply.

Giá cổ phiếu bất động sản đắt hay rẻ, có xuống tiền được không? - 1 — Mr. Nguyen Anh Duc said that real estate stock prices have increased sharply since the beginning of the year (Photo: Hai Long).

However, with the Government's support policies from March onwards, the risk of bankruptcy is no longer in the short term because the payment schedule has been pushed back by 2 years. The Government's efforts to lower interest rates, allow banks to restructure debt, not have to set aside provisions, and promote the removal of legal frameworks for some projects have raised hopes for the market. The market hopes that this industry has escaped the worst situation, some businesses that seemed to go bankrupt have not gone bankrupt.

Mr. Duc proposed several solutions such as unblocking the industry, businesses building new products, selling new goods to buyers, and using the money to pay off bank loans; or businesses liquidating assets, paying off bank loans, and paying off bonds. However, both of these solutions are difficult to implement in the short term.

A relatively interesting thing about the real estate industry, according to the above expert, is that people's demand for ownership is still high. Vietnam's real estate industry is completely different from China's. China produces too much, has a lot of inventory, while Vietnam has no goods.

Therefore, Mr. Duc believes that the important thing now is to have products, by: the legal framework must be resolved, projects must be licensed, investors must build new products, sell products... then the market will be opened up.

At present, experts believe that there are still many difficulties, risks of payment and inability to repay debts are still ahead. The good time to consider real estate stocks has not come yet. "We will only be more comfortable with this industry from the middle of next year," said Mr. Duc.

Sharing the same view, Mr. Dinh Duc Minh - Investment Director, VinaCapital Fund Management Joint Stock Company - said that the recovery of the market and real estate businesses may still be slow, and it is impossible to expect the number of transactions to return to 2020-2021.

The most important factor for the real estate market to recover is the project's legal issues. Currently, many projects are stuck in legal issues. Once the legal issues are not resolved, banks are not allowed to lend, and home buyers are not assured. Only when the legal issues are resolved can businesses recover.

Giá cổ phiếu bất động sản đắt hay rẻ, có xuống tiền được không? - 2 — Mr. Dinh Duc Minh said that real estate stock prices are not expensive but not cheap either (Photo: Hai Long).

Regarding stocks, Mr. Minh commented that the prices are neither expensive nor cheap. Since the beginning of the year, many stocks have increased in price quite a bit, especially during the period when banks continuously lowered interest rates (June, July, August). And if you look at the current prices, many stocks are still higher than the beginning of the year, equivalent to before Covid-19, so they are not cheap while the market has weakened a lot.

To buy real estate stocks, VinaCapital experts recommend that investors can buy and wait for a long time, but in the short term, the market will still move slowly and face many difficulties in the next 3-6 months.

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