Time to inject money into real estate
Real estate firms’ shares have become more attractive to investors as the property market recovery is expected to reap big profits.
The total real estate volume of shares traded in the last month reached 1.1 billion, which was 30%-60% higher than shares of enterprises in other business fields, according to a report released at a workshop recently.
The real estate shares’ attractiveness is attributed to the prosperity of real estate firms which has returned, thanks to the warming of the real estate market. |
Meanwhile, the changes in the legal framework, especially the amended Real Estate Trading Law which loosens the conditions for buying, owning and leasing real estate for foreigners in Vietnam, have also helped the market.
Le Hoang Lan Nhu Ngoc, a senior executive from CBRE Vietnam, confirmed that the real estate market has warmed up in recent months. Besides the projects developed by well-known Vietnamese firms like Novaland, Thu Duc House and Dat Xanh Group, there are also projects by joint ventures between Vietnamese and foreign groups.
Dang Tran Hai Dang, deputy director of VietinBankSc’s Center, noted that there is high demand from the mid-end market segment. The amount of mid-end apartments delivered in the first quarter of the year accounted for 54% of total apartments delivered in Ho Chi Minh City.
There are 28 real estate shares listed on HOSE. The transactions of the shares have become busy recently, especially firms developing popular and mid-end products, such as NLG, NBB, BCI, SCR, DXG, NDN, VIC and TDH.
VietinbankSc noted that the cash has been mostly flowing into shares of firms which show clear development plans and have projects with cleared land. However, it also pointed out that many real estate shares still cannot attract cash flow. A lot of real estate developers continue reporting loss or low profits.
Even TDH, which is considered a good share, also has a market price just nearly equal to ½ of the book value. This shows that investors still are cautious, or they cannot see high profitability of enterprises.
In the past, when the market witnessed ‘hot’ development, many real estate firms increased their charter capital sharply, but profitability did not increase proportionally.
In the latest report, the Ministry of Construction predicted an oversupply of high-end apartments and a shortage of apartments in lower-end segments.
