It is noted that Thu Duc City in particular and Ho Chi Minh City Market in general has becoming active again after a period of immobility due to the Covid-19 epidemic. In addition to brokerage activities to bring customers to see houses and land, real estate businesses also organize many programs to introduce, open for sale, and restart projects after a long period of silence.
In Thu Duc City, trading activities have begun to bustle again in the past few days. Real estate brokers are somewhat busier because they are taking many investors to see the projects and land available. According to a representative of a real estate company in District 9 (Know part of Thu Duc), currently, one day in District 9, there are about 20 deposit contracts informed by brokers in the industry. After a period of “hibernation”, investors have started to look at real estate quite a lot.
Other areas in the East and West of Ho Chi Minh City, activities of buying and selling land plots, townhouses and apartments are also moving again. Some investors start looking for customers by introducing the next stage of products to the market and getting the attention of buyers.
Sharing about the situation of buying and selling real estate after the social distancing period, Mr. B, a real estate broker in the East said, investors have started to see the land and there are many contracts of stakes. However, there are also groups of investors who are still cautious, just watching and not willing to “put down money”. Usually these are new investors entering the real estate market. According to this broker, the cautious sentiment of investors is understandable because the actual epidemic has not completely ended in Ho Chi Minh City and the southern provinces, but only temporarily stabilized, loosening the distance. Therefore, many investors may have liked real estate but still need to consider the market situation more.
In fact, the current market in Ho Chi Minh City does not have much supply now to sell to investors. Most of the products are open source for sale in the next phase, very few projects are brand new. According to statistics of JLL Vietnam Company, in the third quarter of 2021, the new supply only reached 1,610 units, a sharp decrease at 73.4% quarter-on-quarter, down 67.6% over the same period last year. This is the lowest sales volume since 2014 due to a series of new opening events being delayed due to social distancing regulations. The market that is compressed in the third quarter of 2021 due to the pandemic is expected to recover when many projects open for sale with a total of nearly 10,000 units expected to launch in the fourth quarter of 2021, equivalent to the total sales volume of the first nine months of the year.
The market research report of Batdongsan.com.vn also shows that the supply for sale and the demand for housing search across the country decreased sharply in the last 3 quarters under the impact of the 4th pandemic. Real estate sales in the whole market decreased by more than 56%, the demand to buy houses also decreased by 38% compared to the previous quarter. Ho Chi Minh City and the southern provinces saw the biggest drop in listings with a decrease of 81%. However, the real estate market is gradually recording many positive signs of recovery, especially at the end of September 2021 when there is information about the reopening of the economy, the interest in housing search increased by more than 55% compared to July and August.
In terms of price level, it was recorded that real estate in Thu Duc City (HCMC) is currently at the same price compared to before the epidemic, not changing or increasing. There are some beautiful products, the price inching about 3-5%. However, according to forecasts, real estate prices in this area are expected to increase by the end of this year or early next year when the interest of investors is better, as well as the epidemic is completely controlled.
According to a representative of a real estate company in the East of Ho Chi Minh City, this is the time to ease the distance, the psychology of most investors is to take advantage of this moment to purchase “good” so if the price increases, they will falter. At this sensitive time, many investors want to push the goods out after a few months of being “inundated” with interest rates. Investors with money will enter the market at this time to solve this source of goods, so most of them keep the price, not increase. Experienced investors will often go ahead to find opportunities for real estate prices to increase when the epidemic is completely controlled.
According to JLL’s report, in the third quarter, the selling price of primary apartments also continued to increase strongly in the last quarter with an average of 2,683 USD/m2, up 4.4% QoQ and 10.9% YoY. Selling prices increased sharply in the context of tight supply and new projects entering the market, mostly in the mid-end segment and above. Particularly in the high-end segment, the primary selling price was USD 5,099/m2, up 3.9% QoQ and 11.4% YoY mainly due to new projects offering higher-than-average prices.
Besides, the apartment market in Ho Chi Minh City in the coming quarters will continue to witness a strong shifting trend. In particular, the new opening price is expected to continue to increase under the pressure of land fund shortage and the escalating cost of construction materials. The rising price level causes demand to gradually shift away from the central area with more affordable prices. This trend is increasingly evident in the context of falling incomes due to the impact of the pandemic.
According to Batdongsan.com.vn, although the supply for sale and demand decreased sharply, real estate prices in Ho Chi Minh City and Hanoi still showed no sign of decreasing, even increasing sharply over the same period. Accordingly, the asking price of apartments in Ho Chi Minh City in August tended to be flat compared to July but increased by nearly 9% compared to the same period in 2020. Hanoi continued to record the selling price of apartments. increased by 8% over the same period.
Explaining the fact that real estate prices still tend to increase while transactions decrease, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn shared, the supply is scarce plus the capital inflow into real estate is relatively low. Abundance is the main reason for house and land prices to escalate. Currently, a large amount of money withdrawn from other fields tends to pour into real estate looking for investment opportunities, which also puts upward pressure on prices.
According to this unit, despite the economic difficulties due to the Covid-19 epidemic, the demand for housing is always high. During the epidemic, people want to own a safe private house. Since the beginning of 2021, the cash flow into real estate has increased rapidly, and there is still a land fever in many places. The demand for investment in real estate before the Covid-19 outbreak accounted for 75%.
In recent months, due to social distancing, the cash flow did not directly flow into real estate but focused on securities. But then the cash flow will return to real estate. In addition, during the pandemic, capital flows from many investors who cannot circulate into production and consumption channels, and who are not knowledgeable about securities, will tend to pour into real estate and capital investment channels as they are always evaluated as safe and sustainable in the long term.