Real estate market seriously affected by COVID-19 (Photo: VietnamPlus) Hanoi (VNA) - For almost one month, the acute respiratory disease caused by the novel coronavirus (COVID-19) has become the hottest keyword on all forums, as well as in all socio-economic aspects with a lot of "worrying" forecasts. The real estate sector, especially resort property, is among the most affected.
With this “bad” scenario, will the sector have any opportunities to overcome the shock caused by the COVID-19 to revive the “frozen” market?
Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn – one of Vietnam’s leading units on property research, granted an interview to VietnamPlus on this issue.
Psychological "load", transactions at low level
Reporter: As a market researcher, could you talk about worrying changes in the specific business activities of the real estate market since the beginning of the year, especially since the start of COVID-19?
Nguyen Quoc Anh: Real estate is a main element of the economy. When the economy is affected, real estate cannot avoid being affected. Economists forecast that if we can stamp out the disease in the first quarter of 2020, GDP growth will decrease by 1 percent.
With its contribution of 20-30 percent to GDP, real estate is also hit hard. We have noticed a reduction in sales events, and most projects cancelled putting products on the market in February and March.
For this market, the factor to make a transaction a success is that a buyer can see with his/her own eyes the asset in offer, as well as its direction and position. However, at this time, the psychology of both real estate brokers and buyers is affected, therefore, they will give lower priority to transactions.
In addition to impact of the disease, the post-lunar New Year time is also a slow time for the property market as traditionally the first lunar month is the time for leisure. After that, the market will get hotter. I expect this cycle will repeat in 2020.
Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn (Photo courtesy of Nguyen Quoc Anh) Reporter: How does the COVID-19 affect transactions and what are the hottest property segments in major cities, especially Hanoi and Ho Chi Minh City in the recent past?
Nguyen Quoc Anh: Before the lunar New Year (Tet), the interest of customers in real estate in Ho Chi Minh City decreased by about 14-15 percent, while Hanoi still saw increases thanks to stable prices of transactions.
In Ho Chi Minh City, we found that private houses and houses on major streets sold well with rapid transactions. In Hanoi, the hot segment is residential land.
Condotel “frozen” but potential
Reporter: Among “frozen” real estate types, resorts and condotel are facing the most difficulties. How do you evaluate these types?
Nguyen Quoc Anh: Resort property is very attractive and has great potential in Vietnam, as the country has a lot of scenic sites and a long coastline. However, at present, the number of tourists in Vietnam is only equal to one third of that of Singapore and a half of Thailand.
More visitors are coming to our country year after year. However, the scale of real estate has yet to meet demand of visitors, and there remains a lack of entertainment facilities that are attractive to tourists.
For example, in Da Nang, there are currently over 15,000 rooms rated three stars and more, which are not enough to serve groups of travellers from Europe or China.
Real estate market seriously affected by COVID-19 (Photo: VietnamPlus) The fact shows that the COVID-19 is causing a significant drop in the number of tourists and their spending.
I think at least in the first quarter of 2020, the tourism sector will be seriously affected, as over 30 percent of our tourists are Chinese.
Reporter: If this bad scenario continues, will the real estate market have any chance to overcome this shock?
Nguyen Quoc Anh: Basically life still goes on, and it is clear that we must try to contain the epidemic as soon as possible. If we can manage to stamp out the disease in the first or second quarter, the real estate market will have many opportunities to recover and we can see there are many hopeful factors.
For example, after the epidemic is successfully controlled, we can expect that the real estate market can heat up again after at least 3-6 months. With resort property, the recovery would be slower. If the outbreak is stamped out in the first quarter, the number of tourists will start to increase again in the third quarter, which will be a chance for this sigment to develop.
For development projects, the market supply is currently limited and the transaction volume decreases, so I think this year, companies will likely switch to the trading of residential land or private houses and houses on major streets.
According to last year’s general population census, Hanoi was home to about 9 million people. With the figure rising continuously, each year Hanoi will lack about 130,000 apartments, this means there is still demand for housing.
Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, talks to VietnamPlus reporter (Photo: VietnamPlus) Support policy needed to make a breakthrough
Reporter: How many percent will the volume of visits and transactions on Batdongsan.com.vn decrease in the first quarter of 2020 compared to the same period last year?
Nguyen Quoc Anh: Up to now, the volume of customers’ visits and search for products remains stable and do not decrease too much compared to last year, taking into account the impact of Tet.
For transactions, we found that the number of transactions on the Ho Chi Minh City market decreased more. According to statistics, in late 2019, the number of transactions fell by around 20 percent.
Reporter: Given the current situation of the COVID-19, in your opinion, what does the real estate market need to do to improve the situation?
Nguyen Quoc Anh: It is difficult to make any predictions about “bright spots” thus year. I only hope that there will be more support policies from the Government to create a breakthrough for the real estate market.
If we continue to maintain the relatively tight control policies, the macro-economic goal will be achieved but the market will face challenges to maintain the stability level as 2019./.
Reporter: Thank you very much!
| Regarding the difficulties of enterprises operating in the field of real estate, especially resort property, due to the impact of the COVID-19, Chairman of Ho Chi Minh City Real Estate Association Le Hoang Chau proposed the municipal People's Committee ask the Government and the State Bank to consider mechanisms in support of enterprises such as rescheduling loans, reducing loan interest rates and restructuring loans. Recently, on February 14, the Ministry of Natural Resources and Environment issued Document No. 703 providing guidance on land use and certification of ownership for condotels. The use of commercial and service land for this type of property can last from 50-70 years. When the land use term expires, if the user wishes to continue using it, the State shall consider extending the land use. |
