Housing prices unlikely to drop despite pandemic: experts
Hanoi (VNA) - Experts believe that the real estate market is unlikely
to fall into a crisis and housing prices will remain stable because market
demand remained high while supply is limited.
The COVID-19 pandemic is
heavily weighing on a number of sectors, and property
is no exception. The market saw a significant fall in transactions in
the first quarter of this year.
Statistics from CBRE Vietnam
showed that only 1,600 apartments were put on sale in the first quarter, much
lower than the quarterly average of 6,500 apartments recorded since 2012.
Despite fewer transactions,
prices have not dropped off as expected.
According
to CBRE, average housing prices in the primary market rose by around four percent
during that time.
The Vietnam Association of
Realtors said market supply and successful transaction volume in the first
quarter of this year were both at their lowest levels for the past four
years, with no new developments launched.
The association said buyers
were seemingly waiting for drops in housing prices to make
purchasing decisions. Buyers tended to think that the property market
would fall into a crisis and prices would drop due to the impacts of the
COVID-19 pandemic.
However, experts said that a
crisis was unlikely.
The situation appears to
be different from the real estate crises in 1997-98 and 2007-08 when
housing prices fell to rock-bottom levels. The crises were fuelled by easy
credit for real estate which inflated housing prices, coupled with low-capacity
developers in the market.
The market was quiet in the
first quarter due to social distancing, real estate expert Dang Hung Vo
said. The market still had high demand and limited supply, he added.
He said the COVID-19
pandemic would cause difficulties in the short term, but real estate was a
long-term investment.
Vo said that that the number of
new projects licensed in 2019 was equivalent to just 20 percent of the
previous year.
In the next three years, new
supply would drop significantly, he said.
According to Pham Duc Toan,
general director of EZ Real Estate, housing prices would remain stable in
the medium and long terms because of limited supply.
The previous crises eliminated
weak developers from the market, and now players mostly had good
capacity and experience, which would help them
overcome this difficult time./.