Should we buy the real estate 'bottom' now?

Commenting on current real estate prices, Mr. Vo Hong Thang - Deputy Director of R&D DKRA Vietnam said that secondary prices have decreased in most segments such as land, houses, villas by 6-25%, even many projects in Ho Chi Minh City and the Southern region have decreased by 40-45% in both secondary and primary markets.

Surveying the reality in the suburban areas of Hanoi, the trend of "cooling down" is also clearly shown. Specifically, in Dong Anh district, land lots on Dong Hoi, Xuan Canh, Tien Duong, Nguyen Khe streets... are being advertised at deep discounts of about 40 - 50 million VND/m2. Compared to the "land fever" period early last year, land prices in the above areas are all being advertised for sale from 60 million VND/m2 or more, with some lots being pushed up to 70-110 million VND/m2.

Similarly, in Hoai Duc, service land in Di Trach, Van Canh, Lai Xa, Kim Chung... has decreased by 20-30% compared to the "fever" period and is currently being offered by investors at prices ranging from 60-70 million VND/m2.

Should we buy the real estate 'bottom' now? - 1 — Many buyers are waiting for real estate prices to drop sharply. (Illustration: Internet)

Despite reasonable prices, liquidity in the real estate market remains low.

According to a survey by Batdongsan.com.vn, in the first quarter of 2023, the land segment recorded 67,268 successful transactions, down nearly 55% compared to the previous quarter and down 56% compared to the same period. If comparing the above number with the time when the market was most active (quarter II/2022; land transaction volume was 213,018), the land transaction volume decreased by 68.4%.

One of the reasons for this, according to Mr. Vo Hong Thang, is that currently, many buyers are waiting for the market to "bottom out" before deciding to spend money.

Answering the question of whether or not to buy real estate at the bottom at this time, Mr. Vu Cuong Quyet - General Director of Dat Xanh North said that the psychology of customers is just to hope that the market will hit bottom when the downward trend begins to form. But the problem is where the bottom is and when the bottom is, no one can confirm.

Recently, real estate prices have been continuously advertised for sale at a loss. Mr. Quyet believes that this is only a local phenomenon and depends on each segment. For example, in the apartment market, Mr. Quyet affirms that, in general, prices have not decreased but in fact are still at a high level.

Therefore, in order not to miss the opportunity, each customer needs to determine the bottom price that they accept to catch for themselves. At this time, if there is a good product, at a price that customers accept, they should spend money to buy.

Sharing the same opinion, Mr. Le Dinh Hao - Director of Business Division Batdongsan.com.vn also said that it is very difficult to give advice on bottom fishing, because predicting where the top is and where the bottom is are all personal and subjective opinions.

Each type of real estate has a certain potential in the market depending on the time and the policies that are affecting that type and segment. Therefore, if customers have accumulated enough cash and want to buy completed products or future housing products that suit their needs for living or accumulating assets, they do not need to care about whether the price of that house has reached the "bottom" or not. As soon as they see an adjustment, they can immediately buy it.

Currently, the Government has a series of policies to support the market such as credit, amending legal regulations... Localities are also active in supporting slow-moving projects to complete legal procedures so that products can be launched on the market. It is likely that the market will soon recover and regain its vibrant rhythm.

Mr. Tran Khanh Quang, General Director of Viet An Hoa Company, said that since the end of March, the real estate market has been in the strongest price reduction wave in the past half decade. According to actual surveys, the average price reduction of real estate is 25-30% and in some remote or suburban areas in the South, it is 30-50%. However, the wave of property price reduction has now spread, becoming a normal rhythm, no longer shocking as in the first stage.

Mr. Quang assessed that the real estate bottom test will take place in the middle of this year. If the price drop continues to increase and buyers continue to stand on the sidelines, it means that the bottom-testing cycle has not ended. However, if the price drop slows down, buyers are willing to pay, and transactions begin to appear, this could be a signal that the market is gradually turning around.

According to the Vietnam Real Estate Brokers Association, after 2 years of rapid development, this is the right time, a "unique" opportunity to help professional investors, with experience in grasping market information, or strong financial potential, idle cash flow, ready to invest for 3-5 years or more with the expectation of higher profits than bank interest rates, to "collect goods", because the selling price has gradually stabilized and there are many options, especially in the secondary market.

For people with real housing needs, this is also an opportunity to buy, because during this period, many businesses are restructuring and adjusting selling prices to the equilibrium point in order to "survive".

If customers have enough cash and want to buy a completed product or a future housing product (with good construction progress and legal status) that suits their needs for living or accumulating assets, they do not need to care about whether the price of that house is at "bottom" or not. As soon as they see an adjustment, they can buy it.

Ngoc Vy

Useful
Emotion
Creative
Unique

Source