The country’s property market is expected to slow down with prices starting to drop by the end of this year and hitting the bottom by mid-2021. (Photo: VNA) Hanoi (VNS/VNA) - The Vietnamese property market is expected to slow down, with prices starting to drop by the end of this year and hitting the bottom by mid-2021, creating opportunities for home buyers sitting on cash, experts have forecast.
“Housing prices will begin to plummet by the end of this year and bottom out by mid-2021 when the [COVID-19] pandemic has impacted almost every sector, especially the housing market,” Tran Khanh Quang, general director of Viet An Hoa Company, said.
Since the second wave of the pandemic began late last month, investors’ confidence has once again weakened as property sales dived and incomes were hit hard.
“The financial market has faced fluctuations since the beginning of the year when the outbreak started,” he said, adding that a large amount of long-term cash flow is still waiting for good prices to buy.
“From the end of the year to the first half of 2021 will be an opportunity for home buyers. The most affected segment is the higher end.”
With the real estate market remaining uncertain in the first half and probably continuing to be so for the rest of the year the commercial housing segment in HCM City faces a slump, according to Savills Vietnam.
The outbreak has forced people to tighten their purse strings due to loss of income, which would also affect housing demand.
Housing development has also been facing a prolonged legal and licensing barrier, hitting buyers’ confidence.
The resurgence of COVID-19 caused the online real estate market to slow down by 7 percent in July as measured by users’ likes and number of searches, according to a report from popular property website Batdongsan.
The amount of news posted and the level of interest in the market has seen a decrease since late-July due to the return of the deadly virus, it reports.
Interest levels in online real estate floors in provinces recorded an average drop of 10 percent.
The website’s internet consumer research data also show that in Da Nang, the new epidemic epicentre, it dropped by 20 percent, the highest rate in the country.
Le Hoang Chau, chairman of the HCM City Real Estate Association (HoREA), said the market would continue to have high demand for affordable apartments while the supply in this segment is limited.
“There is need for more investment in the affordable housing segment. This segment has high demand and also high liquidity".
Demand from foreigners was also increasing, said Nguyen Duc Them, project sales manager at Savills.
According to HoREA's report, foreigners now own around 16,000 apartments, or 2 percent of the total supply, and this has not affected locals’ opportunity to buy housing.
Since 2015 big-name developers have sold 12,335 units to foreigners, 81 percent of them in HCM City.
Most people coming from Europe, North America, Australia, and Japan prefer to rent when they come to work in Vietnam, while those from mainland China, the Republic of Korea, Taiwan, Hong Kong, and Singapore prefer buying, it added./.
