Week 35/2021 – Central Vietnam Real Estate News Summary
In this weekly or sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to the real estate market in Vietnam.
We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact on Central Vietnam’s property market.
You will find a summary, a link to the source as well as CVR’s take on the article.
We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.
“CVR: Western Management – Local Knowledge”
1. Hundred of residential projects are being stuck causes a big loss for the market
In Ho Chi Minh City, statistics in the last three years show that up to 126 commercial housing projects are not recognized because developers do not have the right to use 100% of residential land.
According to some experts, in the period from 2015 to 2020, some provisions of the Law on Housing and Decree 99/2015/ND-CP only allow appointing the developer of a commercial housing project for a single case, especially investors who have the right to use residential land (with 100% residential land). For the rest, all cases where the developer receives the transfer of land use rights in accordance with the provisions of the Land Law where agricultural land is interspersed with residential land; non-agricultural land interspersed with residential land; 100% agricultural land; 100% of non-agricultural land is not residential land and is not recognized as an investor in commercial housing projects.
These problems make the real estate market suffer great damage, the market’s supply decreases; house prices are pushed up; creating unfair advantages for some investors with existing projects, it is increasingly difficult for middle- and low-income people to buy houses.
HCM City should consider removing the difficulty to help the development of the projects and help reduce the price of houses in the city.
Not everybody wins the game of land investment. It would be better to do investment with well-inform projects which have adequate paperwork and choose those which had the pink book issued. A stronger and more transparent market means more opportunities! Considering investing in a new construction development project in Central Vietnam? Contact the CVR team for more information on current and upcoming opportunities.
2. The selling price of land plots and secondary apartments in Da Nang dropped sharply
Although the secondary selling price decreased significantly, the consumption of land plots and apartments in Ho Chi Minh City. Da Nang in general is still quite low compared to the same period in 2020.
With the apartment product line, in the first 7 months of 2021, the supply of new apartments in Da Nang came from 4 projects launched for sale, supplying about 236 units to the market, only equal to 46% of 2020. The apartment consumption rate of households is also only 49% over the same period. New supply is concentrated mainly in Ngu Hanh Son district.
As for the townhouse/villa segment, because supply and consumption are not volatile, the primary selling price of this segment has not changed much compared to the previous sales, many sales policies with high discounts are approved. applied to stimulate demand before the general decline of the market. Particularly, the beach villa segment still recorded very low overall purchasing power.
Forecasting the market in the last months of the year, Mr. Nguyen Hoang said that Da Nang is one of the leading cities in the country in terms of tourist attractions. However, due to the impact of the Covid-19 pandemic, in the first 6 months of 2021, the number of visitors and tourism decreased to only about 1,052,300 visitors, equal to 38% compared to 2020. The epidemic and the application of distancing measures have generally affected the socio-economic situation, but some projects are still introduced to the market and are still well-received by customers. This shows that the market in the Central region still has a lot of potential and opportunities to recover and develop right after the epidemic is under control.
Why it is important: This is a good time for investors who have plans to buy real estate for long-term investment.
As Da Nang continues to develop into a major economic center and international destination, CVR can help you find suitable real estate that fits your specific needs whether it’s for a business or new home. Interested in learning about opportunities in Central Vietnam? Contact the CVR team today!
3. Why housing prices increase after each Covid-19 wave
Reduce profit, not take loss yet
Experts mentioned that there was no sell-off to cut loss yet, just accepted less profit. For example, before the epidemic, the investors expected to invest in real estate with a 20% profit, now they sell with an expected profit of 10% and they will choose one of many properties they currently have to sell, not sell off everything.
The expected return of the project developers may decrease, but not much. They do not offer initial price drops, but indirect discounts in the form of promotions, gifts,…
The trend of “leaving the city” to go countryside
Investors are gradually adapting to the epidemic, plus the macro policies are getting better, which will be an opportunity to find real estate to preserve cash flow.
The epidemic pulls many people back to their hometown to be close to nature, the climate is good, the population density is sparse, but the infrastructure is still well connected, so after the epidemic, there will be a wave of investors to the provinces with a favorable climate, good landscape to buy real estate as a second house. Potentially, the real estate market in the suburbs will increase in price.
Why it’s important:
This is a good opportunity for investors with good cash flow. They can buy now with a favorable price and wait after the covid wave to sell.
With invaluable local and regional market knowledge, an extensive professional network, and an up-to-date database of properties for sale, our team of experts will guide you through every step of the homebuying process. Whether you are interested in an apartment, condo, or single-family home, the CVR team will help you find a property that works for you. Contact our sales team today!
4. Retail real estate market will stabilize in 2022
According to real estate CBRE, retail segment sales in most Asia Pacific (APAC) markets in the first six months of the year surpassed or were on par with, pre-pandemic levels.
Consumption trends changed due to the impact of the pandemic, on luxury goods, sportswear, and clothing. The recovery of the retail market drives growth in the demand for premises in the countries
According to CBRE, rents for the retail segment will gradually stabilize in 2022, in which rents in large commercial centers are likely to recover higher.
The most obvious recovery prospects come in large markets, where population density and shopping demand are high, while growth prospects for low-end markets will depend on business efficiency. prevent the spread of the COVID-19 pandemic
Why it is important: With the hope of recovering from the COVID-19 pandemic, rents for the retail segment will gradually stabilize in 2022. Now is a good time for investors to return to the real estate market to prepare for the development trend after the pandemic.
CVR is here to help you understand the trends of the market so you can make the best investment decisions. Our experience, highly regarded reputation and strong legal knowledge keep us at the forefront of the real estate industry. Interested in learning more about opportunities in Central Vietnam? Contact the CVR team today!
5. Real estate investors massively sell to block profits, few products actually cut losses
The prolonged fourth wave of Covid-19 is causing many investors to stumble and rush out to salvage their previous investment. Besides some investors had to bite their teeth to reduce the selling price, the market was still mainly selling to block profits.
According to the research of Batdongsan.com.vn, the market also began to appear with many investors with heavy losses. Some longtime investors and real estate brokers said that in the current period, the type of real estate that really has to cut losses is newly deployed apartments and land plots in the province. If investors miss holding too many of these products at the same time, the payment pressure is great, so if they want to discharge quickly, they have to accept a deep discount.
According to experts, the fourth wave of Covid-19 not only directly reduces rental income but also erodes the accumulation of individual investors, thereby having a strong impact on the ability to hold rental income. their properties. It is quite common for real estate investors to drop their goods at a discount. However, the current exits only stop at the technical cut-loss and profit-blocking levels, but there has not been a massive sell-off situation.
Experts also said that although the current wave of real estate losses has only stopped at the technical cut-off threshold, if the disease control cannot be improved before September, there may happen, slight sell-off at the end of this year. Many investors who are financially insolvent, late in payment, unable to pay for too long, might be penalized for contract liquidation and will have to accept a deeper reduction.
As always, CVR is at your service and happy to provide help anyways we can!
Contact Us today to find the real estate investment in Da Nang which is right for You!