Real estate prices in 2021 increase or decrease, where to invest?
According to real estate experts, in 2021, there will be a local fever in some areas due to advantages in infrastructure, transportation, planning… however, this is also the year that investors (investors) ) should be careful when entering the market.
According to Mr. Phan Cong Chanh, a personal real estate expert, it is a fact that people have a lot of money but the “wait” mentality still occurs in the real estate market. Due to the impact of the Covid-19 epidemic, the buyer’s behavior is slower than before.
“I think 2021 is a year with many good signs but also a dangerous year. The market will have local fever in some places, there will be price amplification in the market. Fever will have consequences for the real estate market, pushing the price level far beyond the real value. Such a market is considered unstable, investors need to be careful”, Mr. Chanh shared.
Talking about the signal of the real estate market in 2021, expert Phan Cong Chanh said that, on the macro story, the bank interest rate in 2021 is falling sharply and the interest rate reduction may last for the next few years; Public investment is being focused by the state. In addition, the 13th Party Congress has just ended with many new policies plus benefits from public investment. These factors are driving the real estate market to develop. However, investor sentiment is still very cautious because of the effects of the Covid-19 epidemic.
Mr. Phan Cong Chanh, personal real estate expert
This expert advises, with the current real estate market, investors need to carefully study real estate in all aspects; Reviewing factors such as: Investment purpose, and investment finance. For investment purposes, investors should identify the market at this time with a medium and long-term vision. And finance should be heavy on available capital instead of using bank loans.
Forecasting the real estate market in early 2021, Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam, said that real estate prices in 2021 will still have the same upward momentum as in 2020, without any drop in prices. 2020 is a difficult year for the real estate market, but in general, real estate prices have not dropped. The same situation persists in 2021.
However, the phenomenon of some real estate being pressured to sell at par or lower prices to collect cash flow due to excessive financial leverage will still occur. Dr. Khuong gives an example, an investor buys a townhouse to rent out retail space. The house costs 15-20 billion, but they only have 10 billion left to borrow from a bank with an interest rate of 10%/year. Investors expect to lease properties about 80-100 million VND/month to offset bank interest. However, due to the epidemic, investors could not rent out, while they still had to pay principal and interest every month. For these investors, financial pressure is there, forced to sell assets at price or sell at a loss.
Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam
According to Dr. Khuong, real estate prices in 2021 will still increase if the following factors are ensured: Economic growth is at least equal to 2020; deposit and deposit interest rates as of 2020; The credit room is approximately 20%, the exchange rate is like 2020, the picture of the real estate market in 2021 is not very bad, still has a growth momentum.
“In a difficult context, people with money still spend money to keep assets as real estate instead of depositing it in banks,” said Dr. Khuong.
Besides, this expert said that if project legality is as difficult as in 2020, the real estate supply in 2021 will still be scarce. This does not mean that real estate in 2021 will explode in high prices, but it is very difficult to confirm that it is very difficult for real estate to decrease in price.
Talking about the profit expectations of investors in 2021, Dr. Khuong said that the average annual increase of 15-20% in real estate is a normal story, except for hot areas in terms of infrastructure and planning, real estate prices can be very expensive. can increase 30-40% within a year. For example, investors buy 3 billion apartments, 2 years later sell 3.3 billion; or buy a townhouse 3 billion, 2 years later selling 3.5-3.7 billion is a real story.
“Thus, investors’ profit expectations in the real estate market in 2021 remain stable provided that investors do not use financial leverage; because bank loans will make the selling pressure of real estate may occur. However, the sell-off of assets does not represent the general trend of the real estate market in 2021, “said TS.
Savills expert said that each investor has different expectations when participating in the real estate market. It is very difficult for investors to surf into the market at this time and should be cautious. And long-term investors with cash are still looking for good opportunities in real estate products in the market. According to Dr. Khuong, investors with available cash always want to transfer cash to real estate to be safe, especially with projects with good location, buy to be able to exploit and lease…
“I advise investors if entering the market at this time to limit the use of financial leverage. Should put money in assets with high liquidity, meeting the needs of the majority of people. The real estate market in 2021 has bright spots but it is not a really prosperous market, so investors need to be careful,” said Dr. Khuong.
Sharing the same view, Mr. Nguyen Hoang, Director of DKRA Vietnam R&D Department, said that in 2020, the real estate market will have many disturbances and declines. However, in 2021, the real estate market has good signals to recover. As there are more new supplies, purchasing power increases due to the Government’s economic growth expectation of 6.5%.
In addition, a number of traffic infrastructure projects are being increased investment by the State. Legal procedures and policies are also being changed and perfected. Bank interest rates are also falling sharply. These factors are better supporting the real estate market in general and investors in particular.
Mr. Nguyen Hoang, R&D Director of DKRA Vietnam
However, according to Mr. Hoang, this is not a market for surfing investors, but investors should choose long-term investment trends of 2-3 years or more. The products of land or apartments with prices from 2 to 2.5 billion VND are still the products chosen by many investors in the past and the next period. Because, whether for investment or for living, affordable real estate products still have good liquidity.
According to Young Intellectuals