Director of Savills Vietnam Housing Business said that when the market goes down, most real estate developers will keep a cautious sentiment due to market uncertainty, and investment groups or individuals. Will be quite hesitant because buying and selling properties or projects need a large capital.
According to a recently released report, Savills Vietnam said that the effects of COVID-19 on all industries of the world economy in general and Vietnam in particular are becoming more extensive, both in terms of direct and indirect.
As for the HCMC real estate market, both apartment and townhouse segments have seen a significant decrease in supply.
Accordingly, the supply of apartments in the primary market decreased by 52%, to 9,100 units, the lowest level in the past 5 years.
A similar situation also happened in the townhouse segment, with the number of villas / townhouses and primary land plots decreasing by 43% YoY to 3,250 units / lot.
In which, land plots decreased more sharply (down 53% YoY) compared with villas / townhouses (down 23%).
The total new supply in the first half of 2020 is more than 1,900 units / lot, down 58% YoY.
The record low supply led to the decrease in transactions, the first half of the year apartment transactions only reached over 6,800 units, down 55% year-on-year, the lowest level in the past 5 years. Villa / townhouse transactions decreased 34% YoY.
For land plots, a decline in speculators due to COVID-19 has caused sales to drop 67% year on year.
Absorption rates in the second quarter averaged 50% for villas / townhouses and 43% for land plots.
Performance of some real estate segments in HCMC. (Source: Savills Vietnam)
Mr. Nguyen Khanh Duy, Director of Housing Business, Savills Vietnam, said that when the market goes down, most real estate developers will keep a cautious attitude due to market uncertainty, and Investing groups or individuals will be quite hesitant because the purchase and sale of assets or projects requires a large capital.
There are also many units of investors that have to sell off their assets and portfolios due to business losses.
Mr. Nguyen Khanh Duy, Director of Housing Business, Savills Vietnam. (Photo: Savills Vietnam)
According to Mr. Duy, this difficult time is a good opportunity for businesses or individuals with financial ability and experience in investing in real estate at home and abroad.
With practical policies and policies of the Government, this can be considered as a golden time for mergers and acquisitions of real estate projects in HCMC in particular and the country in general.
In addition, the Ho Chi Minh City People’s Committee’s efforts to deploy the Metro railway line with the thorough completion of the construction of infrastructure in satellite districts such as District 9 and Nha Be will be a strong push for the expansion and connection of new urban areas, in order to relieve the load of the central areas.
In addition, the temporary restriction in business activities can be considered a good time for businesses themselves to restructure and change their investment strategies, targeting real estate segments with great potential such as industrial real estate or resort industry and complete procedures related to land, licensing to anticipate the next real estate development cycle.
Regarding legal procedures, a representative of Savills said that this is a need of the Government to control activities of real estate developers. The State also needs to consider and broaden more policies and procedures for buying and selling real estate for foreigners.
For example, increase the proportion of apartments sold to foreigners, simplify administrative procedures, allow online payment of taxes, transparency and instructions, speed up the grant certificates of ownership of houses and properties on land.
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