Fiscal and monetary policies provide good support for real estate recovery
Sharing his views at the event announcing the "Real Estate Market Report for the Third Quarter of 2023" organized by Batdongsan.com.vn on the morning of October 4, Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn commented that the recovery time of the real estate market will start from around the second quarter to the fourth quarter of 2024.
Explaining the reason for the above statement, the expert said that there are 3 basic indicators of the real estate market that have taken place in accordance with the trend that Batdongsan.com.vn had previously predicted.
Firstly, regarding bank interest rates, Batdongsan.com.vn analyzed that during the previous crisis period, it took 1.5 years from the time the State Bank lowered the interest rate ceiling until the real estate market began to reverse.
If in the period 2008-2012, the market took 4 years to show signs of adjusting bank interest rates, in this period, right from the first quarter of 2023, the State Bank has made 2 adjustments to reduce operating interest rates, followed by reductions in many types of interest rates.
Fiscal and monetary policies provide good support for real estate recovery.
Second , regarding credit growth, reviewing the story of 2012, credit growth decreased from 20% to 7%, while inflation reached 8%. In 2013, credit growth increased to 12% and inflation was 6%.
"Right in the year of credit easing, the real estate market immediately showed signs of reversal. In the current market context, from the beginning of 2023, the State Bank has oriented credit growth for the whole year of 2023 at 14-15%, compared to 14% in 2022, this is a positive signal," Mr. Quoc Anh shared.
Third, regarding real estate policy, in 2008, real estate market liquidity plummeted, but it was not until 2013 that there were policies to support the market such as the 30,000 billion support package and the promulgation of the revised Land Law.
By 2022, the market will repeat the sluggish trend when credit is tightened, interest rates increase, and liquidity decreases. However, since the end of 2022, the Government has continuously implemented measures to remove difficulties for the real estate market such as the 120,000 billion VND support package, Decree 08 helps relieve the pressure of bond payments for businesses, Resolution 33 contributes to unclogging the real estate market, Decree 35 allows the Provincial People's Committee to regulate the areas that can be divided into plots for sale...
Based on the analysis of the above indicators, Mr. Nguyen Quoc Anh said he maintained his opinion: "The real estate market is likely to recover around the second quarter to the fourth quarter of 2023".
Apartments will be the first real estate segment to recover.
Batdongsan.com.vn's Q3/2023 real estate market report shows that apartments are the type of real estate least affected by the negative impacts of the market in the past year because this type serves real housing needs.
In the third quarter of 2023, the level of interest in apartments showed signs of recovery, with demand for buying apartments increasing by 1% and for renting increasing by 6% compared to the previous quarter. In particular, apartments priced from 2 to 4 billion VND were the most searched.
In 2023, apartment selling prices will not change much, only increasing slightly from 1% - 5% in Hanoi and almost unchanged in Ho Chi Minh City.
However, in the long term from 2015 to present, the increase in apartment prices in Hanoi and Ho Chi Minh City has exceeded the increase in people's income. After 8 years, apartment prices in Ho Chi Minh City and Hanoi increased by 82% and 56% respectively, while the income of people in urban areas increased by only 39%.
Mr. Le Bao Long - Strategy Director of Batdongsan.com.vn commented: "Buying apartments is becoming increasingly difficult for people when the rate of income growth cannot keep up with the rate of house price growth. In the future, primary apartment projects will also have high prices because investors have to optimize profits when costs are pushed up."
Accordingly, Mr. Long said that the current price increase of apartment buildings is being affected by many direct and indirect reasons.
Firstly, there is a supply-demand imbalance in the market when people's real housing needs are still high but the supply of apartments is still limited, especially apartments within the price range and in the inner city.
Second, the world economy is fluctuating, causing the price of construction materials to stay high, forcing investors to increase product prices to make a profit.
Third, land funds are limited while land prices are increasing, land funds in the city center are increasingly scarce, to implement a project takes a lot of time and costs to implement.
According to data from Batdongsan.com.vn, the land price index has maintained a stable increase from 2018 to present nationwide but tends to differentiate between specific regions and areas in 2023. After a long period from the first quarter of 2018 to the third quarter of 2023, the selling price of land in the South increased by 71%, in the North increased by 54%.
For the above reasons, Mr. Long affirmed that apartment prices cannot be lower or reduced any further.
Mr. Le Bao Long – Strategy Director of Batdongsan.com.vn.
Citing information in the report of Batdongsan.com.vn, Mr. Long also pointed out the psychology of real estate consumers, in the context of high housing prices, people are turning to renting or looking for ways to borrow to buy a house. However, currently, many buyers have not yet taken out a loan to buy because they are still concerned about interest rates.
Because apartment prices are constantly increasing and the demand for buying and renting this type of property is always high, the average profit rate when investing in apartments is up to 12.5%/year (combining price increase and rental profit).
This is a better and more stable profit than other types of investment such as stocks, gold, foreign currency, land, and savings. This data is compiled and analyzed by Batdongsan.com.vn, compared from 2015 to present.
According to a survey conducted by Batdongsan.com.vn, more than 27% of brokers believe that apartments will be the type of real estate that will recover the earliest, forecasted in the fourth quarter of 2023; 42% believe that this type will recover in the first 6 months of 2024.
"In general, this is the type that is expected to lead the recovery trend of real estate. The apartment market is likely to recover the earliest compared to other types, expected to fall in the first quarter of 2024 and at the latest in the second quarter of 2024 will reverse," added Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region .
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