The real estate market is expected to become warmer in the time to come as the market correction period has bottomed out, experts say.
Richard Leech, Director of the Hanoi branch of CB Richard Ellis, a real estate service provider and consultant, believes that Vietnam’s real estate market has fallen to the deepest low and will bounce back soon.
“The real estate market has become attractive in the eyes of investors,” he said, adding that investors have come back to purchase.
“I believe that the market will see the upturn in the fourth quarter of 2008, and you will see the market heat up further in 2009,” he said.
He went on to say that those who have a real demand for accommodation can now easily access real estate products as the market is no longer distorted with speculation as it was several years ago. Buyers nowadays have more choices as real estate developers have been trying to offer diversified products.
Dr. Do Thi Loan, Secretary General of the HCM City Real Estate Association (HOREA), shared Mr. Leech’s view, adding that though Vietnam’s real estate market is facing big difficulties, it remains very attractive to investors, since the urbanization in Vietnam is still in the early stage.
Nguyen Manh Doan, a freelance land broker in Ha Dong Town in Hanoi, confirmed that real estate has become much cheaper than one or two years ago, since investors have left the frozen market and it is now the right time for investors to purchase.
There have been signs of recovery in the real estate market. In HCM City, after falling sharply in early 2008, real estate prices have increased again in the last few months.
Do Tien Duong, an investor in HCM City, said that the real estate trading floors still keep quiet with just one or two successful transactions a week on each floor; however, this should be seen as a considerable improvement when compared to the frozen period several months ago.
A securities broker in HCM City, who keeps close watch over the real estate market, said that the prices of high-grade apartments have increased slightly, upwards of 5-10% recently.
“The stock market has become gloomier as the result of the global financial crisis. The dollar and gold markets prove to be not attractive as the prices fluctuate all the time. It is now the right time to come back to the real estate market,” he said.
Dr. Loan from HOREA cited another reason that she thinks will help the real estate market warm up: banks’ capital has become more profuse and they are trying to push up loaning to fund real estate purchases.
Mr. Leech affirmed that as the demand for accommodation is very high, the prices of houses and apartments will not decrease further.
He said that foreign investors have been injecting a lot of money in Vietnam’s real estate, and they have every reason to do so. Foreign investors see that Vietnam’s cities are underdeveloped and need more and more money to develop the infrastructure.
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