3 paradoxes in the real estate market 2020

Avatar of Nick John By Nick John Dec14,2023 #estate #paradoxes
3 paradoxes in the real estate market 2020 6
3 paradoxes in the real estate market 2020 6

Real estate prices are still soaring amid the pandemic

Despite the epidemic making the economy difficult and causing many industries to suffer in 2020, real estate prices still skyrocketed, making many experts concerned about this unusual paradox.

VnExpress’s survey showed that in Thu Duc City, an apartment price range of 60-90 million VND per m2 appeared, an unprecedented price level in this area.

Meanwhile, the asking price of townhouses also escalated amid the pandemic.

By the third quarter, the primary price offered by investors for the first time reached 5,337 USD per m2, an increase of 3.1% compared to the previous quarter.

At a conference on the housing market taking place before Christmas, Mr. Dang Hung Vo, Former Deputy Minister of Natural Resources and Environment, said that in contrast to crises that caused housing prices to decline in history, paradoxically,

Real estate market in the south of Ho Chi Minh City.

According to Mr. Vo, currently the real estate market has low supply while demand is too high, creating the possibility of price increases.

In addition, the impacts of planning, according to Mr. Vo, infrastructure and Vietnamese people’s real estate investment psychology are causing housing prices to increasingly escalate.

Primary selling price increased, secondary price decreased

In the third quarter of 2020, the price of new apartments offered for the first time on the primary market increased by 10-15% compared to the beginning of the year, but secondary selling prices decreased by 2-3%, in some cases by 5-10%.

According to DKRA Vietnam’s Ho Chi Minh City apartment market report, after the second wave of Covid-19, housing prices began to record opposite increases and decreases in the primary market (investors offering for the first time).

Primary selling prices of apartment buildings in some areas recorded a fairly high increase, an average of 10-15% compared to the beginning of 2020, with consumption reaching nearly 80% of the basket.

Mr. Nguyen Hoang, Director of DKRA Vietnam Market Research and Development Department, said that the increase in apartment prices on the primary market is due to increased project input costs and prolonged project legal regulations.

Meanwhile, the decrease in apartment prices on the secondary market, according to Mr. Hoang, is due to investors buying and reselling having difficulty with cash flow in the context of low market sentiment in the middle of the epidemic season or investors

House rental prices plummeted, selling prices escalated

In 2020, townhouse rental prices in Ho Chi Minh City are currently down 25-40% compared to before Covid-19.

What is worth noting is that the asking prices of properties including real estate and apartments still show no signs of cooling down, the price increase of land-locked real estate (villas, project townhouses) still reaches 20-36% compared to the previous year.

Mr. Phan Cong Chanh, General Director of Phu Vinh Group, said that the phenomenon of escalating property values and falling rental prices is showing an opposite reaction and this is creating the strongest division in the investment market in a decade.

The cause of this paradox, according to him, comes from the real estate market suddenly being affected by the pandemic.

Talking to VnExpress, Mr. Nguyen Loc Hanh, General Director of Ngoc Asia Real Estate Investment Joint Stock Company, confirmed many paradoxes that have appeared in the real estate market in 2020. These paradoxes show that the pandemic

Mr. Hanh commented that the way the real estate market reacted to the epidemic over the past year seemed positive, unlike previous crises, making hidden concerns about the recession not yet revealed in the short term.

Optimistic thinking and confidence in 2021 promise many positive developments and a strong recovery with global confidence that the Covid-19 pandemic will be controlled.

Besides many conflicting views, what many experts agree on is that the pandemic has changed the real estate market in a way that few expected and reversed all plans of the real estate business over the past year.

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