How is the real estate supply-demand paradox?
The real estate channel seems to have a paradox, that is, the demand is large, but the source of suitable investment goods is very scarce.
Despite the difficulties of the pandemic, Vietnam’s economy still achieved the top growth rate in the world. The good internal strength of the economy is the foundation for the excitement of investment activities, of which real estate is a typical example. However, the Real Estate Channel seems to have a paradox, that is, there is a large demand but suitable investment goods are very scarce.
Demand in the real estate market is huge
The Covid-19 pandemic is an event that has shaken the world economy and Vietnam is no exception. However, despite the difficulties of the pandemic, the data of the General Statistics Office recently announced that Vietnam’s GDP in 2020 still increased by 2.91%, among the highest economic growth group in the world.
It is the good control of the epidemic that has created conditions for recovery, promoting growth and strengthening the internal economic strength of Vietnam. As a result, the stock market continued to rise. In 2020, the stock market capitalization will reach nearly VND 5.1 million billion, equivalent to 80% of GDP, up 14% compared to 2019. A fact that seems to have become a rule is that investors prevail. With stocks tend to use profit-taking cash flow to pour into real estate, continuing to look for profitable opportunities. Mr. Nguyen Duc Huong, former Chairman of the Board of Directors of LienViet PostBank, forecast that stocks will win at the end of 2020, but after January 2021, stocks will correct and abundant cash flow from securities into real estate will tend to increase. rapidly increasing direction.
Real estate always has a great position in investment channels in terms of profit potential and safety. A survey by the BIDV Training and Research Institute gave remarkable information when up to 38% of investors wanted to pour money into real estate, then to other investment channels.
Mr Nguyen Van Dinh, General Secretary of the Vietnam Real Estate Brokers Association, said that Vietnam’s economy is keeping pace and will continue to achieve a better growth rate, so the demand for investment in real estate is increasing. again. The demand of the real estate market is increasing strongly due to the shift of investment from economic sectors. In addition, with the State Bank’s move to cut interest rates three times to support economic recovery, bank interest rates are at their lowest level in 15 years. This interest rate brings many benefits to real estate and investment buyers. The market is converging many factors that are beneficial for investment.
Resources are scarce
A paradox of the real estate market is that while the demand is very abundant, the market is scarce for investment products due to the authorities’ move to tighten project licensing. According to a report by the Vietnam Real Estate Association, by the end of the third quarter of 2020, the country had nearly 80,000 products for sale on the market, but 70% of them were inventories from previous years. New supply in the first 3 quarters of 2020 reached just over 20,000 products. This figure only reached 35% compared to 2019 and reached 20% compared to 2018.
The low-rise segment is also in the above circuit of severe supply decline. Savills’ Hanoi real estate market report Q2/2020 highlights the decline of this segment when only 8 new projects have been implemented and the new phase of 2 projects, providing about 790 low-rise apartments , down -44% year-on-year. In the third quarter, the Hanoi market recorded 3 new projects being implemented and the next phase of 3 other projects, providing the market with about 430 units, down -46% QoQ.
Also according to Savills data, in Ho Chi Minh City, the situation is not much better. Low-rise primary supply in the first 6 months was at the lowest level in the past 5 years, down -43% YoY.
Notably, market data of Batdongsan.com.vn in 2020 shows that real estate far from the center is attracting great interest from buyers. More and more buyers are interested in exploring suburban areas compared to before the Covid-19 pandemic, while areas closer to the city center see a decline in search volume. The low-rise segment, which thrives in the periphery due to the advantage of land fund, is scarce in supply while investment cash flows are pouring in here.
The Covid-19 pandemic has changed the behavior, habits and lifestyle of real estate buyers. The epidemic makes consumers aware of the importance of living space. The periphery area with green, airy and large living space, avoiding the crowded and cramped scene, which has the potential to increase the risk of disease transmission, has become the choice of many customers.
Large demand but scarce supply is an important characteristic in real estate investment, determining the potential for price appreciation and liquidity of products. Therefore, any low-rise projects near the city that are launched at this time will become a bright spot, quenching the thirst of the market’s huge demand for housing and investment in the periphery.
Xanh Villas – the most elite ecological urban area in the Southwest of Hoa Lac satellite megacity is a rare bright spot, solving the challenging problem of “demand – supply” above. With more than 6,000 trees planted over the past 10 years and the stream of Ngoc – King Ba gently winding throughout the project, Xanh Villas is the green lung in the west of the capital, creating a civilized living environment. fresh. About 30 km from the center of the capital, Xanh Villas is also a rare commodity in terms of standardization when it is clear in legal terms and is planned according to the model of a closed urban area with the synchronous integration of 25 modern utilities and services. great, classy.
Launching prime products in the right segments, it is not difficult to understand when Xanh Villas has become a hot spot of Hanoi real estate. The opening events attract hundreds of customers to attend and after only a short time, more than 70% of the apartments for sale have been sold.
Xanh Villas urban area
Loacation: Tien Xuan, Thach That, Ha Noi
Official distributor: Cen Land and THM Land.