The real estate market is in the turmoil when investors are simultaneously cutting down prices, offering promotion packages to stimulate demand. Investors lack capital; market’s liquidity declines sharply, however this situation turns out to be an opportunity for people with real demand for housing.
Housing structure revised
The sharpest decline has been seen in the segment of ground. From the end of 2011 till date, prices of grounds in several urban areas have reduced from 30 percent to 40 percent compared to previous price peak.
The segment that attracts most people of capital city is segment of condominiums; however this segment has not shown any significant changes. Their prices are currently considered to be much higher compared to real prices. Compared to the same period last year, prices of condominiums in Hanoi have just decreased about 5 percent – 10 percent. Segment of offices for rent is under the pressure of reducing prices when the supply is increasing sharply, however averaged decline is just only 3 percent compared to the previous quarter.
In order to achieve ideal prices, as well as create new and more attractive prices, according to many real estate markets, it is necessary to readjust the housing structure in housing development projects to satisfy diverse demand of people, utilize economically land resources as well as to ensure the uniformity of infrastructure in new urban areas. Luxurious apartment projects should also be limited to increase the rate of condominiums to over 80 percent in Hanoi and in Ho Chi Minh City. Projects of urban areas should meet requirements of synchronous infrastructure, satisfying fully the essential needs of people as well as promoting the development of rental housing.
Opportunities for those with real demands
According to the Department of Housing and Real Estate Market Management, a problem causing angry and dissatisfaction among people is the fact that there are many incomplete, unused villas and adjacent houses in urban areas, which have negative social- economic influences, causing huge waste of land resources, money and people’s labour forces, worsening urban landscape as well as social security and urban environment.
Financial burdens on investors has become heavier and heavier, especially for investors implementing projects with bank loans. Many real estate experts forecasted that next one or 2 months will be deadline for investors to repay interests and principal, or else they will be fined for delaying repayment; many loans will meet the due term therefore the flights of investors out of the market (mainly investors with short term capital) will continue.
Advantages in the market belong currently to the buyers, and for many years it is the first time they have had the feeling of being a “God”. Now the buyers have rights to make their requirements of favourite products, to choose better products with more competitive prices and services, they also have a more active part in the negotiation on prices than before…
According to real estate investors in Hanoi, the market currently belongs to people with real housing demand.
Dr Nguyen Ba An – Deputy Director of Institute for Development Strategy (under Ministry of Planning and Investment) once stated to reporters: “This moment is the best one for those who have money to invest because the real estate market is coming back to real value, virtual values are being eroded away.” Quiet market and declined prices are the very opportunity if investors manage to catch them. Especially for investors with long term capital, they can take the chance of abundant supply and buy houses at cheap prices, and then wait for opportunities to sell later.
The overall picture of real estate market is bleak; it is clearly a disadvantage for investors. However in fact, there is a small part of investors who still find opportunities to make money from the current situation. Real estate products’ prices keep declining, however in the long term, real estate market is still considered a potential one because real estate products are always essential for people, stable accommodation is always an important criterion in development strategy of Asian people in general and of Vietnamese in particular. Therefore, when understanding well consumers, investors still have opportunities to sell products.
Luong Tuan
Vietnamese
