Time to buy a house before prices go up?

Active recovery

According to information from the Department of Natural Resources and Environment of Ho Chi Minh City, the number of real estate records in the first 2 months of 2024 was 67,750 records compared to 48,949 records in the first 2 months of 2023, an increase of 18,801 records. Thanks to that, the revenue in the first 2 months of the year reached 103,164 billion VND compared to 90,741 billion VND in the first 2 months of 2023. In particular, tax revenue from real estate transactions increased sharply, reaching 955.3 billion VND, while in the first 2 months of 2023 it was 659.9 billion VND.

Previously, in the report on the real estate market in Ho Chi Minh City in the fourth quarter of 2023 and the whole year of 2023, the Ho Chi Minh City Department of Construction stated that real estate business activities still faced many difficulties but gradually recovered, with the growth of each quarter being less negative than the previous quarter.

The market has grown again

The above figures also coincide with the report of the Ho Chi Minh City Statistics Office on the socio-economic situation in February and the first two months of 2024 that the real estate business situation in the city has shown signs of recovery since the Government issued policies to remove obstacles and promote the real estate market such as: Resolution No. 33 of the Government on a number of solutions to remove obstacles and promote the safe, healthy and sustainable development of the real estate market; Decision No. 338 of the Prime Minister on approving the project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021 - 2030"; Telegram No. 993 of the Prime Minister on continuing to resolutely implement solutions to develop the real estate market to develop safely, healthily and sustainably, contributing to promoting socio-economic development...

At the same time, recently, businesses operating in this field have joined hands to implement many payment policies and incentives for customers. Real estate business revenue in the first two months of 2024 is estimated at VND 42,300 billion, accounting for 59.4% of other consumer service revenue, up 20.1% over the same period.

Waiting more will lose the opportunity?

Mr. Ngo Quang Phuc, General Director of Phu Dong Group, said that recently the National Assembly passed three very important laws related to real estate, namely the Law on Real Estate Business (amended), the Law on Housing (amended), and the Law on Land (amended) with many easy provisions, cutting down on administrative procedures, thereby helping to speed up project progress, so businesses are quite happy.

According to Mr. Phuc, currently real estate, especially the segment for real housing needs, is still considered an essential commodity, still selling although not as fast as when the market was hot. The most difficult times have passed when interest rates decreased, savings are no longer high, so money will flow into low places, people have to find safe havens to invest. Of which, real estate and stocks are the two channels chosen first. If stocks require a lot of knowledge and experience, real estate will be easier. This is a good time to negotiate with investors to buy at the best price, with the most choices. "But real estate has a very quick reversal. A house can go for months without being sold. One day, suddenly many people call to buy at the same time, the homeowner will reconsider, maybe not sell anymore or offer a higher price. When the real estate market recovers, prices will increase again, at that time the opportunity to buy a house will be more difficult" - Mr. Phuc said.

Projects targeting people with real housing needs still sell.

Mr. Ngo Quang Phuc also said that real estate prices always increase and do not decrease. Even in the most difficult times of the market, the price level still increases because input costs such as land purchase, construction costs, and financial costs always increase and remain high. To reduce prices, the only way left is for businesses to reduce profit expectations. If in the past, investors often expected profits for a project of about 30 - 40%, now businesses have to rethink. At Phu Dong Group, the expected profit of a project is about 10 - 15%. "Currently, creating land funds to do a project is extremely difficult. For example, the SkyOne project (Binh Duong province) is currently selling for about 30 million VND/m2, but if after two years, at the same location, the price will have to increase by 20 - 30%. Therefore, if at this time there is cash flow, enough income to pay off bank loans and if you choose the right product, you should buy a house, no need to wait any longer. If you wait any longer, you will lose the opportunity," Mr. Ngo Quang Phuc analyzed.

Sharing the same view, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also commented that from the second half of 2022 to the end of the first quarter of 2023 is the most difficult period for the real estate market of the whole country and Ho Chi Minh City. In which, the first quarter of 2023 is the bottom of the Ho Chi Minh City real estate market with a negative growth rate of 16.2%. Entering the second quarter of 2023, the Ho Chi Minh City real estate market gradually overcame the most difficult period and began to enter the recovery and growth phase again, although there is still negative growth but there are signs of gradual decrease with a negative growth rate of 11.5%. In the third quarter of 2023, the Ho Chi Minh City real estate market continues the recovery and growth trend again, the speed is slow but shows a more solid recovery, although there is still negative growth but continues the decreasing trend with a negative growth rate of 8.7%. By the end of 2023, it can be affirmed that the real estate market in Ho Chi Minh City has overcome the most difficult period. Although there is still negative growth, it has decreased significantly with the negative growth rate for the whole year of 2023 being only 6.38%.

"After the first two months of 2024, the real estate market of the whole country and Ho Chi Minh City continued to recover and grow more firmly, being the leading sector in attracting the most foreign investment capital (FDI) and in the stock market, real estate stocks along with financial and banking stocks are leading the market. With this recovery momentum, it can be said that the real estate market will return to normal operations and enter a safe, healthy and sustainable development cycle from the second half of 2024, creating momentum for stronger development from the beginning of 2025 onwards," said Mr. Le Hoang Chau.

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