Despite the negative effects of the Covid-19 pandemic, real estate is still attractive to many people and is still a safe investment channel in the current context.
Real estate is still a safe investment channel
Many positive signals
Collecting data from the local Department of Construction shows that in the second quarter of 2021, there were 29,949 successful real estate transactions.
The average total transaction volume was about 118% compared to the previous quarter and about 101% compared to the same period in 2020.
In Hanoi alone, there were 1,094 successful transactions, equal to about 20% compared to the previous quarter. In Ho Chi Minh City, there were 3,002 successful transactions, equal to about 87% compared to the previous quarter.
Specifically, there were 6,384 successful transactions in the North, 7,300 successful transactions in the Central region and 16,265 successful transactions in the South.
In general, successful transactions are still concentrated in the mid-end and high-end segments.
According to the assessment of the Ministry of Construction, the absorption capacity of the market in the second quarter is better. In this quarter, no new inventory of real estate was created from the primary market.
The inventory of untransacted real estate is almost exclusively available to secondary investors and some types of real estate are being heavily impacted by Covid-19 such as tourism and resort real estate.
Regarding investment capital, the Ministry of Construction said that although the total direct investment capital of foreign investors decreased by 2.6% compared to the same period last year.
Total newly registered capital, adjusted capital and contributed capital to buy shares by foreign investors in the real estate business in the first 6 months of this year increased by more than 35% over the same period last year, equivalent to 300 million USD.
The capital level increased gradually from the end of March to June 2021 from $0.6 billion to $1.15 billion. Accordingly, accumulated registered capital in the real estate sector also tends to increase month by month.
Thus, it can be seen that Vietnam is still considered to be in a good position to attract FDI into the real estate business.
According to statistics from the Ministry of Planning and Investment, in the first 6 months of 2021, real estate business is the field with a strong increase in new establishment registration (up 44.8%).
The number of businesses returning to work in the real estate business is 831, up 19.6% over the same period in 2020.
Despite many difficulties, many real estate businesses continue to maintain their plans and target higher profits than 2020.
For example, in 2021, Novaland plans to hand over 18 projects including Saigon Royal Residence, The Grand Manhattan, Golden Mansion, Orchard Parkview… and many other projects in provinces including Dong Nai, Binh Thuan, Khanh Hoa, BA Ria Vung Tau.
Novaland sets a revenue target of VND 27,491 billion, an increase of 447% compared to 2020 and a profit after tax of VND 4,100 billion, up 5% compared to 2020.
Vinaconex targets total consolidated revenue of VND12,230 billion, up 41% year-on-year. Expected profit after tax is 1,008 billion VND.
To achieve the above business plan, Vinaconex will accelerate the progress of ongoing projects and promote sales at Cai Gia Cat Ba Amatina New Urban Area (Vinaconex ITC), the office complex for lease. and Green Diamond luxury apartment at 93 Lang Ha (Hanoi), the extended Hoa Binh Boulevard Urban Area project (Quang Ninh), Thien An New Urban Area (Vinaconex 25).
All money will eventually flow into real estate
Assessing the current real estate market, Mr. Nguyen Tho Tuyen, Chairman of BHS Group, said that we have many opportunities.
Covid-19 appeared to turn everything upside down, disrupt the global supply chain, and make many industries miserable.
“Currently, the real estate market is still a good investment channel, preserving long-term capital and safety,” said Tuyen.
There are 5 reasons given by the CEO of BHS Group for the above statement.
- Firstly, bank interest rates are still low and inflation is well controlled.
- Second, cash flow continues to pour into financial investment channels such as stocks, bonds, and even virtual currencies.
“This is an unusual sign, but it also benefits the financial industry. The proof is that the stock market is continuously increasing and more and more investors are F0. Wherever the money flows, it will eventually take profits in real estate, “said Tuyen.
- Third, the situation of scarce supply. Many people think that this is a disadvantage, but at this time, the scarce supply is the key to the development of the market.
- Products with transparent legality, good progress, infrastructure, and taste are still sought after by investors.
- The evidence is that the price of land in the center of the provinces is still increasing, the price of apartments in the city. Ho Chi Minh City and Hanoi increased about 8-15% in the past year. In particular, the type of long-term ownership of Second home is very much sought by investors.
- Fourth, the difficulties in business in some industries are favorable for real estate.
- When interest rates are low but capital cannot be traded in their industry, many people will want to invest in other more profitable channels, including real estate.
- Fifth, technology makes the real estate business not too difficult. The proof is when Hanoi and Ho Chi Minh City. According to directive 16, meeting with customers has become difficult, but some sales staff are still able to sell goods.
They can provide project location, schedule, sales policies entirely online. They replaced the previous openings at the hotel with a few hundred guests per event with an online sale that could attract tens of thousands of views and hundreds of online bookings.
However, according to Mr. Tuyen, not everyone has the above-mentioned favorable conditions.
If you are an investor, you need to have knowledge and reliable sources of information. If you’re a salesperson, you need to be persistent and quick to learn new skills. Especially knowing how to use online tools.