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Real estate to boost economic recovery?

Real estate to boost economic recovery?

Monday 01, 11 2021
Despite the impact of the epidemic, Vietnam’s real estate market still experienced good growth when real estate prices have not decreased, demand is high, and large investment capital has flowed into the industry.

Many experts believe that the real estate market is like a spring that is bouncing back, which is considered a boost to economic recovery after the pandemic.

According to Dr. Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, in the first nine months of 2021, there were 1,000 real estate businesses reoperating. The amount of newly registered FDI capital in the real estate sector reached 1.74 billion USD, accounting for 13% of the total investment capital in Vietnam, second only to processing and manufacturing industries.

National Financial and Monetary Policy Advisory Council

The issuance of real estate bonds has also been very vibrant with value of 148,000 billion VND, ranking second after banking bonds. Prices of real estate stock have also increased.

The above factors show that people still pay a lot of attention to real estate. Compared to previous economic crises, the Covid-19 pandemic has a different impact on the economy and the real estate sector. In the past, when there was a problem, the demand immediately dropped. Now, however, demands for industrial real estate, logistics, and housing are still very high.

Real estate transactions during the period of social distancing fell sharply but real estate prices did not decrease, reflecting high market demand.

Ease of administrative burden

Experts say that the real estate market is fully capable of recovering on its own. Real estate businesses do not ask for money support but removal of administrative burden. As long as the policy bottlenecks are resolved, the real estate market will bounce back as strongly as a “compressed spring”.

Mr. Vuong Duy Dung

Mr. Vuong Duy Dung, Head of Housing - Real Estate Market Management Department, Department of Housing and Real Estate Market Management (Ministry of Construction) said that the real estate market in general has faced difficulties in the past few months. There has been deflation in both supply and volume of transactions. The total supply is only 60-70% while the transaction volume is even lower, only 40-50% compared to the second quarter of 2021.

However, the deflationary market is not due to demand. This is only a short-term effect caused by the impact of the epidemic. The supply decreased but the opposite was true for demand. Only the rental price of commercial service premises decreased in provinces which were heavily affected by the epidemic.

In 2020 and early 2021, there will be many policies that can remove difficulties for the real estate sector.

Dr. Can Van Luc also said that the growth prospects of the economy in general and the real estate market in particular are positive when the Government is very drastic in building a program of economic recovery in 2022  and 2023. There are many supportive policies for the business community. Chances are high that the GDP growth of Vietnam in 2022 will reach 6.5 - 7% if these programs are implemented well.

Dr. Can Van Luc

Source: thesaigontimes

 

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