Real Estate Market 2023: Time for Buyers

01(1).jpg — Real estate market "frozen", the advantage in transactions is leaning towards buyers

In recent times, the real estate market in the Southern region in general and Ho Chi Minh City in particular has almost fallen into a "frozen" state, liquidity in the real estate market has recorded a decrease due to monetary policies such as tightly controlled bank credit and bonds... Many landowners have encountered financial difficulties and are forced to sell at a loss, reduce prices, and liquidate... In this context, many investors with relatively large amounts of cash see this as an opportunity, ready to spend money to hunt for "overwhelming" goods. However, in reality, the price offered by real estate buyers also makes sellers "shake their heads" in disappointment.

Ms. Hang (investor) is selling a 500m2 plot of land in Cu Chi district (HCMC) at a loss but has not been able to sell it yet. Ms. Hang said: "Over the past few months, there have been a few people who have come to see the land, but most of them just came to see it for fun, to check the price, but they have no intention of buying. There were also people who offered a price, but they forced me to lower it by nearly 50% compared to the price I offered, even though the price I offered was a loss of nearly 200 million VND compared to the original purchase price."

"Many people came to see the land and then left, most of them did not contact me again. Some people offered the land for 1.7 billion VND, while the price I offered was 3.3 billion VND. Seeing me shaking my head and refusing to sell, they said that if I did not close the deal right away, they would buy another plot of land. At this time, there were hundreds of people selling and only a few buying, so they did not need it and were not in a hurry," said Ms. Hang.

Mr. Long (real estate broker) said: "In early 2023, I received a brokerage for a 200m2 plot of land in Binh Chanh district, Ho Chi Minh City. The landowner offered a price of 30 million VND/m2, a 20% discount compared to the original price, the plot of land already had a "pink book". However, after many rounds of checking information and going to see the land, when the buyer and seller met face to face, the buyer bargained down to 20 million VND/m2, making the landowner frustrated and refusing to sell."

According to Mr. Long, in fact, the customer also likes this land plot, but at a time when the real estate market is cooling down, many people are selling at a loss, so the customer is afraid of being ripped off, so they carefully bargain from low to high. However, the landowner is different, because he wants to sell quickly, the price has already been reduced by 20%, so when he heard the customer's starting price was too low, the landowner was shocked and refused to negotiate further because he thought the customer was not in good faith.

According to experts, in the context of a sluggish real estate market, a sell-off is a tense tug-of-war between buyers and sellers over price. Although the seller has lowered the price, buyers have a risky investment mentality at this time, having to pay a low price to avoid being overcharged. The expected selling and buying prices are currently very different, so those with money are still waiting outside the market. The final price will depend on the assessment, demand, financial capacity... of the buyer. With the current real estate market situation, it is considered the time for buyers.

Mr. Vo Hong Thang - Deputy Director of R&D DKRA Vietnam said that supply and demand have not met yet. The reason is that although the price decrease is happening, the people holding assets - real estate have a limited threshold to bear losses. When the selling price zone crosses the threshold of profit reduction and moves completely to the loss-cutting zone, if the loss exceeds the seller's tolerance, it is a total loss or not enough to cover the costs incurred during the investment process, the real estate transaction will be deadlocked. Because the person who sells off assets - real estate can suffer a loss in the situation of deducting all losses and still recovering a part of the asset, but if they sell off assets to the point of total loss, they will stop selling the real estate and will find another solution to replace it.

Sharing the same opinion, Mr. Tran Khanh Quang - General Director of Viet An Hoa Real Estate Investment Company said that the opportunity to buy real estate at a good price will be greater in 2023 when the pressure increases, the race to sell off goods becomes stronger, the reduction can reach 50% for property owners who sell their goods due to financial difficulties. "At the present time, if investing, investors need to consider 3 factors. First, invest in real estate with complete legal documents, high liquidity, location near the center, or clear connection to the center. Second, choose a product that you have investment experience to easily bargain and buy at a good price. Third, you have to "hunt" for products of projects with a large discount policy" - Mr. Quang analyzed.

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