Demand for real estate investment increases again

The continuous decrease in deposit interest rates over the past two years is attracting investors back to the real estate channel.

The real estate market in Ho Chi Minh City is witnessing a clear change as the number of home buyers for investment increasingly overwhelms the real demand for housing. This shift is not accidental, but is driven by many factors: expectations of price increases, the search for a safe haven for cash flow, and the attractiveness of rapidly developing satellite areas.

Transactions skyrocketed

According to the latest survey by DKRA Group, up to 50% of real estate buyers in Ho Chi Minh City and surrounding areas are for investment purposes, mainly aiming for long-term profits. Specifically, 8-month data from DKRA Group shows a strong recovery of the market. Apartment supply reached more than 28,000 units, up 58% over the same period; the consumption rate reached over 20,000 units, 3.1 times higher. For townhouses and villas, the supply increased by 71% to more than 10,000 products, the consumption volume was 4 times higher than last year. Particularly for land, although the supply increase was insignificant, the absorption rate also increased 2.2 times.

An apartment project in the suburbs of Ho Chi Minh City has recently opened for sale. Photo: TAN THANH

"The common age of investment customers is 35 - 44, accounting for 37%, while the group buying for residence is concentrated in the younger age group, from 25 - 34, accounting for about 40%. This reflects the difference in behavior. Accordingly, customers buying for residence are often first-time home buyers, so they are very interested in location, amenities and living environment, while investment buyers often have real estate, idle cash flow and financial experience, so they mainly focus on profitability and price increase potential" - Mr. Vo Hong Thang, Deputy General Director of DKRA Group, said.

Ms. Xuyen (living in Vinh Hoi ward, Ho Chi Minh City) said that thanks to her stable job at the bank and an income of about 80 million VND/month, she took advantage of the bank's preferential loan policy to buy apartments in installments to buy 2 apartments in Vinhomes Grand Park (Long Binh ward, Ho Chi Minh City). The purpose is both to invest and to rent out to offset the interest costs. "The rent is considered as interest payment, a few years later I will have another apartment" - Ms. Xuyen said.

Meanwhile, Ms. Phuong in Thu Duc ward, although owning many real estates in Ho Chi Minh City, Dong Nai and Lam Dong, recently continued to invest in a project in Long Hau (former Can Giuoc, now in Tay Ninh province) for 6-7 billion VND, also for investment purposes. "In my experience, buying real estate and leaving it there will not lose anything, much more secure than other channels" - she shared.

Mr. Ta Trung Kien, General Director of Wowhome Real Estate Company, commented that the continuous decrease in interest rates in the past 2 years has made real estate an attractive investment channel. Interest rates on home loans are also low, many banks have cooperated with investors to offer preferential policies for young people to borrow only about 7%. In addition, the new Law on Real Estate Business has come into effect, helping to make transactions more transparent, reduce legal risks, and create confidence for investors. "Removing the land price frame and replacing it with a price list approaching the market is considered a great opportunity to make a profit early" - Mr. Kien emphasized.

In addition, Ho Chi Minh City and the Western provinces are entering the strongest phase of infrastructure development in many years. Key projects such as Ring Road 3, Ho Chi Minh City - Moc Bai Expressway, Metro Line 2, 3A, along with Metro Line 1 and a series of completed expressways, are gradually forming a synchronous connection network, creating a direct boost for real estate value. "Land, apartment and land prices in Ho Chi Minh City and neighboring areas have increased sharply, bringing double profits to investors, both capital gains and rental cash flow," said Mr. Kien.

Investment flows are shifting

A notable trend is that capital flows from the North are shifting strongly to the South, as investors realize that with the same amount of capital, buying real estate for rent in Ho Chi Minh City is more effective than in other markets. Mr. Tran Minh Tien, Director of the Center for Market Research and Customer Understanding of One Mount Group, commented that the real estate market in Ho Chi Minh City has entered a new growth cycle.

According to Mr. Tien, the expansion of administrative boundaries, especially after the merger of Binh Duong and Ba Ria - Vung Tau into Ho Chi Minh City, has created an economic super city, expanded development space and attracted large-scale investment. Along with that, public investment activities have been promoted, a series of large infrastructure projects have been continuously started and completed, opening up great opportunities for the real estate market. A typical example is the TOD model (urban development according to public transport orientation), helping Ho Chi Minh City have 46 more land plots with an area of ​​over 7,300 hectares for implementation. Of which, 11 pilot locations along Metro lines No. 1, No. 2 and Ring Road 3 are expected to turn suburban areas into new centers. According to Mr. Tien's forecast, real estate prices in these areas could increase by 20% - 30% after the infrastructure is completed. "Key infrastructure projects such as Ring Road 2, Ring Road 3, Metro Line 1, 2 and Thu Thiem Bridges 3 and 4 are gradually completing the traffic network. The planning of Thu Thiem into a new international financial center promises to bring great demand for Class A offices and high-end housing, consolidating Ho Chi Minh City's position as the most vibrant market in the country" - Mr. Tien expected.

Dr. Pham Viet Thuan, Director of the Ho Chi Minh City Institute of Economics and Environment, said that the increasing demand for real estate for investment during this period is a normal trend, reflecting the actual demand for idle cash flow. "The shift from residential demand to investment shows the maturity of the Vietnamese real estate market," Mr. Thuan stated his opinion.

Given the market developments, experts believe that Ho Chi Minh City real estate could enter a boom phase from 2030, when key infrastructure projects come into operation and Thu Thiem becomes an international financial center. Because these things not only increase real estate values ​​to a record level but also strongly attract international capital flows, attracting a community of high-level experts to live and work.

From another perspective, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, said that the supply in the real estate market is not lacking but most of the products are high-priced. Buyers mostly already own houses, only participating for investment purposes and waiting for prices to increase to resell.

In addition, some new regulations related to real estate unintentionally create imbalances. For example, the tightening of land subdivision and sale, stricter regulations on land use fees, or the "self-negotiated compensation" mechanism make it difficult for small projects. While large-scale projects are supported by the State in terms of compensation, they put their products on the market at prices much higher than the actual cost. This creates a large supply but prices do not reflect the true value, distorting the market and eliminating opportunities for secondary investors.

Promoting low-cost housing segment

In the context of the Government's orientation towards the development of affordable housing, Mr. Tran Khanh Quang said that it is necessary to speed up the progress of social housing projects, while encouraging businesses to invest in the commercial housing segment with suitable prices. More importantly, it is necessary to shorten legal procedures so that low-cost projects can soon enter the market, creating competition with high-end products, thereby helping to balance prices and develop the market more healthily.

Source: https://nld.com.vn/nhu-cau-dau-tu-bat-dong-san-tang-tro-lai-1962509222026228.htm