Property Market: Unlikely Volatile by Year’s End

In recent years, the sequential issuance of circulars and decrees aimed at curbing the property market development has caused a positive effect on the market. Speculative trading declines and capital flows for this market are tightened. Thus, according to property experts, the real estate market will unlikely go up but tumble in some segments due to bank loan repayments.

 

With a growing supply, people have more options for real estate projects. This will intensify pressures on investors who must improve the quality of products and lower prices to boost sales.

 

According to Mr Doan Van Quang, an expert, more than a year ago, investors expected a strong jump in the real estate market and they did not hesitate to inject much money to build urban zones and apartments. With excessive investment, the supply is actually very large. Many urban zones have been completed but sales are going slowly. As a result, the price rise or warm-up of the market is hardly likely.

 

Mr Khuat Vu Trung, who is in charge of housing project development at Colliers Company, said the price slump in some segments is difficult but the unexpected rebound is impossible.

 

Many people still believe that real estate market will go up as the Government and the Hanoi People’s Committee are investing much in upgrading infrastructures to celebrate the 1000^th founding anniversary of Thang Long - Hanoi. But, in reality, prices have risen in some areas only like extended Le Van Luong or Le Trong Tan streets.

 

The Government will approve the Hanoi construction master plan but researchers and specialists are showing reserved and careful viewpoints. According to Vietnam Report Company, the Hanoi real estate market tends to be stable in the last six months of the year and there will be no sudden changes in prices.

 

When the property market is no longer a delicious vying pie for businesses and investors, cash flows may be rechanneled into other markets for higher short-term profits.

Previous bubbles have sent the real estate prices too high in relation to incomes of most people. Therefore, buyers prefer low-end products, not high-grade ones, although the housing demand is very high.

 

Investors have started paying attention to low-end products while the liquidity of other market segments is low. Doan Van Quang said low-end housing projects are receiving many incentives while the demand is growing up. This is an opportunity for investors.

 

According to Vietnam Report, apartment transactions in Hanoi will be more active in Hanoi in the last months of 2010 as people have real demand for accommodations.

 

Remarking on the upcoming trend, Mr Nguyen Van Minh, General Secretary of the Vietnam Real Estate Association, said the low-end market segment is catching the real attention. With many incentive policies from the Government and growing demand, many investors have shifted their investments into this segment.

 

In the coming time, low-end apartments will account for a majority of the property market. Many projects of this kind have been kicked off and will come out soon, Mr Minh said.