Property prices escalate despite COVID-19 pandemic
Although the local real estate market has been hit by the COVID-19 pandemic, leading to poor liquidity and a fall in supply to the market, property prices have continued to increase, according to economic experts.
Moving forward, questions are being raised on how the national economy will recover, particularly with real estate and property being viewed as an important field of investment.
According to economic expert Dr. Vo Tri Thanh, during the third quarter of the year Vietnamese growth is considered to be at its lowest point since records began. Despite facing major difficulties, there are also some positive signs.
“Swift vaccination in recent times, along with changes in anti-pandemic strategy, is an important factor in bringing life back to normal. Besides, despite facing plenty of difficulties, the world economy has gradually recovered, with positive growth forecast. The control of the pandemic will also open up expectations for real estate investment,” Dr. Thanh said.
The past two years has seen the real estate market remain a bright spot, offering good prices in many countries globally. From the perspective of consumers, rising property prices have driven them into difficulty, Dr. Thanh added.
Dr. Can Van Luc, a banking and finance expert, said that real estate prices since 2020 have increased by 5.6% globally, despite the negative impact of the pandemic. For some countries such as Australia and Canada, real estate can be viewed seen as a medium and long-term investment channel for investors.
The opening nine months of the year saw the number of real estate businesses increase following the establishment of 5,400 new firms with a total registered capital of VND343,000 billion.
The Vietnamese real estate market is therefore expected to start recovering strongly from the fourth quarter of the year, with the third quarter representing the bottom quarter of the national economy.
Economic growth is therefore expected to expand by 2.5% or 3% this year, and between 6% and 7% next year. Indeed, economic recovery will be a key driving force behind the growing real estate market, Dr. Luc said.
Dr. Nguyen Van Dinh, deputy general secretary of the Vietnam Real Estate Association, said that in the first quarter of 2020, the transaction rate hit the lowest level since the 2013 crisis. In line with this, the absorption rate stood at approximately 10% compared to the same period from last year. However, after a period of careful consideration and evaluation, by the end of 2020 it was confirmed that the domestic real estate market was not facing a crisis.
“The pandemic makes real estate liquidity poor, but compared to the region, the liquidity of Vietnam's property market is still good. During two years of suffering COVID-19, many economic sectors were severely affected, so many investors have embarked on real estate - a potential market," Dr. Dinh analysed.
However, supply is consistently failing to meet the market's demand due to barriers such as the censorship process and halted construction. Accordingly, the property market has failed to obtain lots of new products, leading to insufficient supply. This is the problem of the market in the present and medium term, Dr. Dinh added.
According to Nguyen Manh Khoi, deputy head of the Housing and Real Estate Market Management Department under the Ministry of Construction, numerous COVID-19 outbreaks over two years has severely impacted the real estate market, thereby resulting in project hiatus and decreasing supply.
“Transactions in the real estate market in 2020 and 2021 have witnessed changes. During the first half of the year, real estate transactions were significantly higher, showing that the real estate market is still of great interest," Khoi said.
