Vietnamese Tiếng Việt | Tuesday, October 16, 2018 | Advertise with Us
   
Text Size

Experts divided on Vietnam’s real estate market

Share
(0 votes, average 0 out of 5)

While some experts warn that a real estate bubble could occur in 2019, others believe there is no need to worry.

vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, HoREA, MOC, real estate bubble

Will there be real estate bubble?

 

Vo Tri Thanh, former deputy head of the Central Institute of Economic Management (CIEM), said the macroeconomy has big influences on Vietnam’s real estate market. However, the market performance shows latent risks, especially in planning, monetary policy and legal areas. 

He said economic forecasts show signs which are not favorable for Vietnam’s economy in general and the real estate market in particular. Thus, investors need to be cautious.

The world economy is predicted to slow down in the next two years, while Vietnam’s economy is believed to be affected by trade war activity. 

In addition, changes in monetary policy which tighten capital flow to the real estate market will also have an impact on the market.

Nguyen Tri Hieu, a finance and banking expert, said the total outstanding loans of the national economy is VND6,800 trillion, of which 20 percent has been disbursed to the real estate sector.

Hieu describes the situation as ‘extremely worrying’. The state doesn’t have long term monetary policy for the real estate market, while the State Bank has tightened lending to real estate sectors.

“If the cash flow continues to go to the real estate market and real estate prices increase by 100 percent within one year, risks will occur,” Hieu said, adding that current credit growth would lead to a real estate bubble. 

“It is highly possible that a real estate bubble will occur by 2019,” he said.

Meanwhile, other experts are optimistic about real estate market performance.

Duong Thuy Dung from CBRE Vietnam said the liquidity in the real estate market has been stable in recent years. About 40,000 new apartments open for sale each year, while 30,000-35,000 apartments are sold.

Dung said the price increase can only be seen in some market segments in certain areas, which do not reflect the situation of the whole market.

The sharp price increase of 40-60 percent only occurs in some areas in HCM City. Meanwhile, in the entire market, the price has increased by 3-5 percent on average in nearly all market segments. The areas with good infrastructure have seen prices increase by 7-14 percent.

Tran Dinh Thien from the Vietnam Economics Institute and Thanh from CIEM said the current situation is not too worrying. However, they think it would be better to be cautious about possible risks.

 

Source: VietNamNet

Maybe You Also Interesting :

» Real estate market still gloomy in traditionally noisy time

Real estate market has been found gloomy in the first quarter this year instead of being noisy as it used to be in previous years. 

» Pending project market gets busy towards the year end

A number of projects left unimplemented for many years have changed hands, while more and more large transfer deals have been reported recently. 

» Foreign investors rush to buy into Vietnamese businesses

Nearly 5,000 deals involving foreigners buying into Vietnamese businesses have been reported so far this year, an increase of 50 percent compared with 2017.

Login