Expect cash flow to return
According to records in the past 2 months, the real estate market has resumed trading, different from the "frozen" period in early 2023. Along with that, after the announcement of adjusting the operating interest rate of the State Bank (SBV) in late mid-June 2023, the mobilization interest rates of many banks have begun to decrease sharply. Compared to October and November 2022, the mobilization interest rate has decreased by 2-3% depending on the term.
One of the direct benefits of reduced interest rates is that it facilitates access to capital and finance for home buyers and investors, thereby encouraging trading activities and creating momentum for market recovery.
Deposit interest rates are falling sharply, making floating interest rates for real estate investors more "affordable".
This positive factor also creates motivation for real estate project developers. Reducing capital costs helps investors to implement new projects and complete existing projects more quickly. This can increase the supply of real estate in the market, help meet the needs of home buyers and create momentum for sustainable development of the real estate market.
With the Government increasingly focusing on removing difficulties for the real estate market, the trend of cash flow returning to this market is becoming clearer. Because real estate is a fast and stable investment channel for investors, especially when compared to other investment channels such as stocks, foreign currencies, etc.
According to a study on profitable channels in the period 2015-2023, recently published by Batdongsan.com.vn, the stock market is the investment channel that recorded the most ups and downs during this period. However, the VNIndex as of the second quarter of 2023 still increased by 96% compared to the beginning of 2015. Meanwhile, profits from foreign currency investments after nearly 9 years only increased by 11%.
Among the profitable channels, real estate has had a fairly high rate of return over the past 9 years. (Photo: Batdongsan.com.vn)
Profits from savings deposits alone have continued to increase steadily due to the stability of this type of deposit, reaching a 41% increase by the second quarter of 2023 compared to early 2015.
In particular, gold and land have recorded price increases of 90% and 69% respectively after 9 years. Surpassing all the above investment types. With the apartment type, the profit margin (price increase rate plus rental yield) has been recorded to be fast and stable over the past 9 years. As of the second quarter of 2023, apartment investment profits have increased by 97% compared to the beginning of 2015.
In addition, according to Mr. Dinh Minh Tuan - Director of Batdongsan.com.vn in the Southern region, the more houses and lands investors own, the more consumers tend to want to buy more. Of the 1,000 people participating in Batdongsan.com.vn's real estate buying psychology survey in June 2023, up to 68% expressed their intention to buy houses and lands in the next year.
A representative of Batdongsan.com.vn also said that the percentage of people planning to buy real estate in the near future is 46% for those who do not own a house, 66% for those who already own a property and up to 87% for those who own 3 or more properties. Of which, up to 61% of the surveyed people said they want to buy for investment. Primary real estate in the price range of 2.5 - 5 billion VND is the segment that attracts a lot of attention.
Meanwhile, Dr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association commented that real estate is still a favorite investment channel, suitable for the habit of accumulating assets, with the ability to preserve capital quite well compared to other investment channels from an economic perspective. In regions across the country, it shows that from the middle of the second quarter of 2023, investors have begun to hunt for fertile lands with large development potential. Some regions have shown many clear signs of improvement with an increasing number of successful transactions.
Will the market "warm up" in the final period of the year?
However, in addition to reducing interest rates, for the real estate market to fully recover, support and adjustments from policies and laws are needed to resolve existing problems. Among them, improving legal procedures and increasing transparency in real estate transactions will help create a more stable and secure business environment. At the same time, improving the quality of construction and project management is also an important factor to ensure the sustainability and sustainable development of the real estate market.
In recent times, many moves by investors have shown changes to keep up with market trends. Some investors have also cooperated and accompanied technology units to innovate in the real estate sector. New technologies such as blockchain, artificial intelligence and Internet of Things are being applied by some investors and real estate brokerage companies to their products, which can help improve the transaction process, increase transparency and create convenience for users.
The real estate market is showing many positive signs indicating the possibility of recovery in the medium term.
At the same time, many investors have focused on enhancing the capacity and quality of human resources in the real estate industry to meet the increasing demands of the market. The reduction of staff in the period from late 2022 to early 2023 is both a challenge and an opportunity for many real estate companies. It is a good time to purify and retain quality personnel for the recovery of the market.
This is the stage where investors and homebuyers need to strengthen their confidence, helping the real estate market develop in the coming period. Policies and support measures need to create a stable and trustworthy environment to attract and maintain investors' confidence. At the same time, information andeducation need to be strengthened to raise people's awareness and understanding of the real estate market, thereby creating active participation and sustainable development for the market.
In recent times, the Vietnamese real estate market has witnessed strong fluctuations due to the impact of many economic and political factors. However, according to the forecast of Mr. Alberto Beretta, CEO of IFO SRL (an Italian group specializing in resort interiors), the real estate market will gradually recover by mid-2024 if there are no worrying risk variables such as war or pandemic.
In addition, many experts also believe that the current market is in the stage of accumulating internal resources, balancing product structure and determining actual demand. After this stage, when the market supply is balanced in each segment, suitable for the market, there will be a re-development.
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