According to experts, the increase in real estate prices is forecasted to be difficult to stop in the context of escalating development costs along with explosive housing investment demand in many markets.
.jpg)
Illustration
According to a survey of many consulting firms and experts, real estate prices recorded a fairly rapid increase in the first quarter of 2022 and is expected to continue the upward trend in the coming quarters.
One of the reasons for the increase in housing prices is due to scarcity of supply, land prices, rising material costs, and a long time to complete legal procedures. At the same time, in the first quarter, the prices of construction materials such as steel and cement increased sharply and showed no signs of cooling down.
The report of the Ministry of Construction on the real estate market shows that, in the first quarter of 2022, the average real estate transaction price of the whole market is always in an uptrend. Survey data on price fluctuations of some types of real estate in March and the first quarter of 2022 in 8 localities including Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, Binh Duong, Dong Nai, Khanh Hoa , Ba Ria-Vung Tau shows that real estate prices increased quite high in many types.
Specifically, in Hanoi, apartment prices increased by 1.53%, individual houses by 2.24%, land for housing construction by 2.85%. Similarly, in Ho Chi Minh City, the percentages also increased by 2.48% respectively with the price of apartments and single-family houses increasing by 2% and land plots being more expensive by 3.6%.
According to Savills Vietnam, in the first quarter of this year, there were no new projects in Hanoi, but all new supply came from the next phase of six existing projects. The number of transactions decreased, the selling price increased while the Hanoi housing market remained positive with high demand.
The urbanization rate, the natural population growth rate and the rise of the middle class will be the main drivers to help boost the demand for apartments in the coming time.
Hanoi continues to wait for the real estate supply from the project being started
Grade B projects lead the way in terms of primary price growth, followed by Grade C and Grade A. This causes the market to fall into a shortage of low-cost apartments.
Savills experts forecast that, with a large land bank, 5 upcoming districts in Hanoi including Hoai Duc, Dong Anh, Thanh Tri, Gia Lam and Dan Phuong will become hot spots for residential real estate development, accounting for rate of 24% of future supply.
Do Thu Hang, Senior Director, Research and Consulting Department, Savills Hanoi analyzed that, after a quiet quarter, the Hanoi apartment market is expected to recover quickly. Improved off-centre infrastructure will help promote real estate development.
In the segment of villas and townhouses, the market tends to slow down. Compared to the fourth quarter of 2021, the performance of this segment has improved when the market recorded a certain growth in new supply , evenly distributed throughout Hanoi.
Although the transaction volume of villas and townhouses still increased quarterly, it was still lower than the same period last year. Currently, townhouses and townhouses are the two products with the strongest consumption in the market. Notably, in terms of price, since the third quarter of 2021, the primary selling price has continuously recorded the highest level ever.
From now until the end of the year, in this segment, the market will welcome more than 1,600 units from ten projects; in which, the western region is still the place with the largest future supply.
From the "limitation" of products in the Hanoi market, investors will continue to look for opportunities in neighboring localities such as Bac Ninh, Bac Giang, Hung Yen, or Hoa Binh - an expert of the company. Savills forecast.
From a different perspective, Mr. Matthew Powell, Director of Savills Hanoi, analyzed that the upward pressure on prices and the high inflation rate while the credit is tightened may slow down the real estate market activity in the future. Short-term. However, the increase in real estate prices is forecasted to be difficult to stop in the context of escalating development costs along with explosive housing investment demand in many markets.
Sharing the same view, Mr. Dinh Minh Tuan, director of Batdongsan.com.vn, commented that real estate has a correlation with inflation. When inflation is high, real estate will also increase in price and is considered by investors as a safe haven. Inflation increases, the currency is increasingly depreciating, investors will turn to assets with accumulated value such as land or assets with long-term growth value.
In addition, an economic support package of VND 350,000 billion is about to be implemented; Of which, nearly 114,000 billion VND will be poured into infrastructure, which will further support the attractiveness of this investment channel. With the apartment segment, the sharp increase in input material prices forced developers to increase selling prices to ensure profits, not to mention a series of other factors such as rising labor costs and lengthy licensing procedures. … also affects product prices.
According to Mr. Tuan, real estate only increases in correlation with inflation in the context that Vietnam's inflation is gradually approaching the target inflation, if this number is exceeded, the lending interest rate will increase, thereby negatively affecting the market. market, negatively affecting leveraged investors.
Therefore, investors should also have a methodical strategy, be prepared for fluctuations in both price and liquidity of the market. In addition, investors should also calculate a prudent investment strategy, avoid following the psychology of the crowd or set high expectations, run after land fever because it is easy to get bogged down and buried in capital and virtual profits.
By Vietnam+