Supply drips, real estate prices still increase
The issue of cash flow for real estate project development is being concerned recently in the face of the situation that banks are tightening loans for the real estate sector. According to Savills Vietnam expert, it is necessary to clearly identify important sources of capital to remove bottlenecks for new supply.
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| Supply drips, real estate prices still increase. (Source: BNews) |
Experts of Savills Vietnam Company said that in the current investment market, the most popular investment channels are still gold, securities and real estate. Among them, real estate is seen as a safe investment channel, helping to accumulate assets with the potential to increase profits in the future. However, the real estate supply is still dripping and prices continue to increase rapidly after Covid-19.
Statistics of the Ministry of Construction show that, in the last quarter of the second quarter, the number of newly licensed commercial houses was 29 projects with 6,753 units, only about 74.4% compared to the previous quarter and equal to 42% compared to the previous quarter. with the same period last year. The North leads with 17 projects including 3,763 units; The Central region has 9 projects with 678 apartments and the South has only 3 projects but accounts for 2,312 apartments.
This data shows that the supply of commercial housing in the second quarter has not improved, especially the number of newly licensed projects is only about 42% compared to the same period in 2021.
New supply of real estate products in all segments in the first half of 2022 is limited. The Ministry of Construction explained that the new supply is limited mainly due to the tightening of legal procedures for real estate projects.
In addition, the narrowing of capital flows to the market from many sides such as tight control of credit capital, issuance of corporate bonds, the decline of the bond market, etc. is also the reason for the limited supply.
Meanwhile, housing and land plots are still the type of real estate that attracts attention, especially in the segment of mid-end commercial housing, affordable and social housing, the supply for this segment is relatively similar. Relatively few - Bureau of Housing and Real Estate Market information.
According to Dr. Su Ngoc Khuong - Senior Director of Savills Vietnam Investment Department, from now until the end of the year, the real estate supply will not be much with the context of the conflict between Russia - Ukraine still taking place, gasoline and oil will high and not much change.
Besides, the supply in the market is quite limited, leading to an increase in real estate prices by 20-30% compared to previous years. The price increase came from many other factors such as the price of gasoline, construction materials and labor all increased, inflation...
“New supply in the market is quite limited, investors increase selling prices, primary buyers expect added value due to inflation, rising prices of construction materials. These are the developments in the market in the past and 1 year, especially in residential real estate "- Mr. Su Ngoc Khuong cited.
This expert analyzes, the increase in real estate prices in recent times is considered to increase by translational and asymptotic. That means real estate prices will not increase as hot as in previous years, increasing at a time from 10-15% but prices will increase a few percent monthly.
However, when looking back at the market over the course of a year, real estate prices increased by 20-25%. This is the market movement in recent times. From now until the end of the year, the market will not change much compared to the first quarter of the year when the supply is limited and banks still tighten credit.
Notably, the real estate market increased, but the liquidity was slow because people with real housing needs could not afford to pay. "This is an issue that needs to be looked at in the market from the perspective of supply and demand, liquidity and price," emphasized Savills Vietnam expert.
Currently, bank loans are still the main source of capital for real estate and banks are reviewing lending possibilities for this segment. If macro factors such as fiscal and monetary policies change and the project's legal problems are resolved, the market will have more positive signals. Other businesses in construction and services will also benefit from the real estate business.
To develop a real estate project, investors need equity, loans from banks, capital from partners and capital received in advance from customers. These are the main capital groups for implementing residential real estate projects; in which, the majority of capital comes from bank loans.
Therefore, the trend of gradually tightening credit capital flows of many banks will make the market more difficult. However, developers will manage to solve this problem through various forms.
Dr. Su Ngoc Khuong said that, besides capital, the biggest difficulty of the market today is the legal issue of the project. This factor directly affects the progress of real estate projects in Vietnam. Many projects have been successfully transferred, but to approve the project from the step of having a policy until getting a construction permit takes 3-5 years.
Therefore, the Government needs to come up with solutions to help real estate businesses have the opportunity to create value and add new supply to serve the housing needs of the people - Mr. Khuong commented.
However, if the fiscal, monetary and legal policies in the next 3-5 years continue to be as difficult as now, the supply of real estate will not be much. Large cities will gradually lose their attractiveness and competitiveness compared to neighboring areas.
Therefore, in the long term, residential real estate in Hanoi, Da Nang and Nha Trang will receive the attention of people coming to live and work. Therefore, the housing problem will require a huge supply and should be given top priority - this expert forecast.
From the perspective of the State management agency in this field, Mr. Nguyen Manh Khoi - Deputy Director of the Department of Housing and Real Estate Market Management said that, between the capital market and the bond market, there is a close relationship with the real estate market and closely related to the real estate market. When adjusting the bond and capital markets, it will directly affect the real estate market.
Recently, when the bond market was hot, real estate was also hot, leading to abnormal development and lack of stability. Therefore, it is necessary to adjust the issuance of bonds in the direction of amending Decree No. 153/2020/ND-CP on the issuance of private corporate bonds for the right issuance and effective management.
At the same time, controlling capital flows should give priority to projects with high feasibility, providing quick supply to the market, especially in the segment of social housing and low-priced commercial houses.
The Ministry of Construction proposed to increase the supply to the market, strengthen the publicity and transparency of information, especially about projects, planning and source of goods, to avoid collusion to increase prices; increase investment capital - Mr. Khoi said.
(Source: VNA)
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