Residential real estate in 2021: The ‘delicacy’ of the market

Residential real estate such as land plots, apartments, houses attached with land… are outstanding types of the market. Land plots have long-term and stable value; Apartments are the key product with increasing social demand; houses attached with land (townhouses, villas) are of high value.

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Advantages of the traditional market segment

According to Mr. Phan Cong Chanh, a personal real estate expert, Chairman of Phu Vinh Investment Consulting Joint Stock Company, said that 2021 is about traditional market segments such as land plots, apartments, townhouses… These are the segments that address the most basic human needs in the current uncertain Covid-19 epidemic.

The “second home” market such as resorts, hotels and even office buildings that will continue to be affected next year, the speed of recovery depends on control of the COVID epidemic. Mr. Chanh predicts that this market can recover from the third quarter of next year, when there is a vaccine for it. Recovery cannot develop vertically, it takes time.

Regarding the traditional market investment area, if HCMC is the center, the border provinces (Binh Duong, Dong Nai, Ba Ria – Vung Tau) has increased in price recently. The period of 2021 – 2023 is the investment period of neighboring markets such as Binh Phuoc, Phan Thiet… These localities benefit from the wave of infrastructure and reasonable real estate prices.

Mr. Vo Huynh Tuan Kiet, Deputy Director, Head of Housing Project Marketing for CBRE Vietnam, pointed out a typical development model of a market. In Binh Duong, 4 -5 years ago, the demand for apartments was very low, mainly apartments for workers but now active in many higher-class segments at highway of Binh Duong area, Di An City, Thu Dau Mot. Therefore, Mr. Kiet emphasized that each market at a time would have a change in product types and different market needs. It is difficult to say what is a leading segment in 2021.

With the same point of view, Mr. Nguyen Hoang, Director of Research and Development DKRA Vietnam, emphasized that the choice of investment in any type of real estate would depend on the understanding of investors in that type as well as many factors involved. However, Mr. Hoang said that residential real estate such as land plots, apartments, houses attached with land… are outstanding types of the market. Land plots have long-term and stable value; Apartments are the key product with increasing social demand; houses attached with land (townhouses, villas) are of high value.

Opportunities come along with challenges

In 2021, Mr. Kiet said that investors will continue to find new land funds. Investors in Ho Chi Minh City have a tendancy to find land fund in Hanoi and vice versa, businesses in Hanoi also redirect to HCM. In addition, the trend of developing projects in coastal and coastal markets continues to develop.

In general, CBRE representative said that the market would have positive recoveries but could not make a strong breakthrough because it depends on many factors. For example, Ho Chi Minh City has still delayed in the progress of projects because legal procedures would not be completely resolved at once. The second factor is the impact of the Covid-19 epidemic, although Vietnam has well controlled it, had new vaccines, it takes time to verify.

In conclusion, 2021 is the year of recovery but no breakthrough yet. Supply will improve, developers will diversify products to suit the needs of the market. Mr. Nguyen Hoang emphasized that each type of product has challenges and opportunities. DKRA Vietnam representative said that in the context of the complicated real estate market, the investment is also facing many difficulties, requiring investors to determine that the investment is long-term. Short-term investment is no longer suitable at the moment. Therefore, the financial potential must be enough for long-term investment, even just waiting when the market fluctuates. Investors should also have a good understanding of the type of product intended to be invested with all relevant factors such as segment, location, legal, sales policy, potential power…

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