Stable development predicted for property market in 2019

Vu Van Phan, deputy director of the Housing and Real Estate Market Management Agency under the Ministry of Construction (MOC), said the real estate market in 2018 witnessed stable development with no major fluctuations. This could be seen in the stable number of transactions, decreased inventory levels, and stable prices.

The total value of real estate inventory by November 2018 had dropped to VND22.98 trillion, a decrease of VND105.57 trillion from the high peak in the first quarter of 2013.

However, he said land price increases may occur in some areas which have been programmed to develop into special economic zones or new urban areas with well developed infrastructure systems.

According to Stephen Wyatt from Jones Lang LaSalle, 150,000 apartments were completed in the first nine months of 2018 in HCM City, while the selling price increased by 4 percent only compared with the same period last year. 

He predicted that the supply would be plentiful in 2019, with 40,000 apartments and 4,500 villas and houses to be launched into the market.

Meanwhile, Nguyen Vu Thien Diem, chair of Thien Minh Group, thinks the real estate market in 2019 will be flat. There are difficulties ahead, including the lack of land and the few medium-tier housing products.

Nguyen Tri Hieu, an economist, noted the foreign investment into the sector has increased in the last three years. 

Investors from Singapore, Japan and the Republic of Korea have shown special interest in properties in central areas of the city and near subway stations. They partner with Vietnamese to develop projects to improve management.

Since many ‘bottlenecks’ in the legal framework have been cleared, Hieu believes that the real estate market will receive new investment flows in the time to come. 

The State Bank of Vietnam (SBV) has tightened commercial banks’ lending to fund real estate projects. However, this will not affect the development of projects as investors now are seeking capital from many sources.

“Real estate developers are now undergoing restructuring to list their shares on the bourse and join hands with foreign investment funds to develop projects. So, there is no need to worry that the capital flow to the real estate sector will get stuck once commercial banks cut loans,” Hieu said.