The psychology of waiting to "catch the bottom" causes the real estate market to plummet
At present, real estate research companies have a common opinion that the market is still in a very difficult period. Both supply and project absorption rates have hit a "bottom" for many years.
According to DKRA's report, market demand decreased in both primary and secondary markets, only 20% - 30% compared to the same period last year in all segments.
Illustration photo. (Photo: VN)
Notably, real estate prices nationwide have dropped sharply, with discounts of up to 10% - 25% compared to the same period.
In the secondary market alone, the selling prices of most real estate segments have dropped sharply. Specifically, land plots have decreased by 10% - 14%, apartments have decreased by 6% - 17%, townhouses - villas have decreased by 10% - 25%. The increase in discounts and price reductions in the secondary market is aimed at helping reduce inventory.
In the workshop "Removing obstacles in real estate - Promoting growth", Mr. Vo Hong Thang, an expert from DKRA, explained that buyers are waiting for the market to "bottom out", lacking confidence in deciding to spend money. At the same time, buyers have lost confidence in some investors due to not fulfilling their commitments on project progress and legality.
“In addition, although interest rates are decreasing, they are still high. All of these factors have caused hesitation in the decision to borrow to buy real estate,” said Mr. Thang.
On that basis, Mr. Thang recommends that real estate buyers need to have a vision and investment strategy in the medium and long term, avoiding the risky surfing mentality. At the same time, they should also consider the leverage ratio of real estate loans, and have a suitable and effective plan to repay principal and interest.
Mr. Truong Anh Tuan, Chairman of the Board of Directors of Hoang Quan Real Estate Consulting - Trading - Services Joint Stock Company, said: This enterprise has been implementing 15 social housing projects. In addition, there are 12 projects and the remaining 3 projects are also promoting the completion of construction permits, the total number of expected apartments is 15,000.
However, the procedures for implementing social housing projects are still difficult. Current administrative procedures require 5-10 years to complete a project.
“We need a stronger process. Currently, to have land for social housing, it takes a long time and is complicated. There needs to be a breakthrough in administrative procedures in large localities like Ho Chi Minh City,” said Mr. Tuan.
Must strengthen market confidence
Meanwhile, speaking to reporters from the Journalist and Public Opinion Newspaper, Mr. Hoang Van Tang, General Director of the Construction Development Investment Corporation (DIG), said that everyone has seen the difficulties in the real estate market and businesses have also felt them. However, the most difficult period for the real estate market is about to pass.
Mr. Tang analyzed: Firstly, after the rather quiet first quarter of 2023, we can see the Government 's strong direction in promoting public investment, through the establishment of working groups to inspect, urge, remove difficulties and obstacles, and promote the disbursement of public investment capital in 2023 in many localities.
The most difficult period for the real estate market is almost over. (Photo: TT)
“Promoting the disbursement of public investment capital in 2023 will also help many business groups, including the real estate group,” Mr. Tang said.
Second, the Government has repeatedly sent official messages to unblock the real estate market. After many meetings and instructions from the Government, localities have taken stronger action.
The meetings focused on discussing solutions to the real estate market. In particular, they focused on groups of solutions and policies to solve the hottest problems in the market, including legal and capital issues.
“If legal issues are resolved, many projects will be cleared…, but above all, it will strengthen market confidence,” Mr. Tang commented.
Third, credit flows have shown signs of cooling down. Although there has not been an immediate impact in the short term, the downward trend in interest rates will have a positive impact on the real estate market.
Combined with more positive movements from M&A activities of real estate projects, I believe the real estate market has many opportunities to recover from the end of the third quarter of 2023.
Recently, Resolution 33 requested Government agencies to study, develop and issue 4 decrees amending and supplementing decrees guiding the implementation of the Land Law, Investment Law, decrees under the management of the Ministry of Construction and regulations on procedures for implementing commercial housing projects, urban areas, etc.
At the same time, localities are required to focus on removing difficulties, ending the shirking of responsibility and delay in handling procedures, but in reality, many businesses are still waiting for legal resolution.
“On the business side, we only hope that projects with sufficient documents and standards will soon be licensed. On the contrary, if the project does not meet the criteria, we also hope to receive decisions from ministries, branches or related units so that businesses can be more proactive in their implementation plans,” Mr. Tang added.
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