According to experts, Vietnam's real estate market in the last months of 2022 will face many difficulties due to the impact of changing legal policies, the monetary policy with tightening credit in the real estate segment, etc. Therefore, the market will continue to go into a quiet state.
According to EZ Vietnam Real Estate Joint Stock Company, the market is currently under the impact of many factors, causing stagnation. The decline of the financial market drags the real estate market down. Currently, the source of money for lending from banks is also tightened, and the credit room of banks is almost exhausted. Therefore, the real estate market will be quiet until the end of 2022.
Commenting on market trends, the founding director and managing director of the Rich Invest real estate investment fund said the market in the last 6 months of 2022 would continue to go into a quiet state. The reason is the impact of the legal policy is in the process of change, the monetary policy with the tightening of credit in real estate. Credit growth is now at 9.34%, nearly two-thirds of the plan at the beginning of the year, leading to banks tightening lending, which affects many industries, including real estate.
Forecasting market movements in the last 6 months of the year, the President of the Vietnam Association of Real Estate Brokers said that the real estate market is going through a period of rebalancing. House prices will increase due to rising costs, and liquidity will decrease. Investors also tend to be more cautious in investing. The reality of "easy buying, hard selling" is present in the real estate market. Investor sentiment is low, and home buyers are hesitant, so projects will be hard to sell.
Moreover, when the capital is congested, it will easily lead to the risk of Vietnam’s real estate market falling into a quiet state. Therefore, buying a home for investment needs to be cautious, especially when using financial leverage. Cash flow needs to wait for safe opportunities in the future after carefully considering macro factors.
According to VnDirect, real estate sales may decline in the second half of 2022 due to more challenging home buying demand.
Real estate demand, especially high-end, hoarding, and speculative properties, will still face difficulties in the second half of 2022 due to limited credit to these types. Besides, the mid-end and affordable segments may be affected by cost-push inflation and rising interest rates.
However, demand in these segments is likely to overcome said pressures in the second half of 2022. It is because the new supply in this segment is limited, while the demand remains high.
Based on that, VnDirect forecasts that the sales of the top 5 real estate companies to track (including Vinhomes Joint Stock Company, Novaland Investment Group Corporation, Nam Long Investment Corporation, Dat Xanh Group Joint Stock Company, and Khang Dien House Trading and Investment Joint Stock Company) may decline to 88,600 billion VND in the second half of 2022, compared with 159,400 billion VND in the first 6 months of 2022, equivalent to a decrease of 44% compared to the beginning of 2022.
Sharing the same opinion, KB Securities Vietnam (KBSV) believes sales will decrease due to the influence of rising interest rates.
With the ongoing intense inflation, the move to increase interest rates is becoming popular in countries globally, and Vietnam may not be able to avoid the general trend to ease pressure on the exchange rate. High-interest rates will directly affect the cost of real estate investment capital for businesses and individuals in 2023, causing the market's absorption capacity to decrease while the accumulated inventory is still very large after the past period.
Concerns about declining sales of real estate were also voiced by Rong Viet Securities Company (VDSC) in its recently published real estate industry outlook report.
According to VDSC, corporate bonds, or, for specific, real estate bonds, will mature with great value from Q3/2022 and 2023. In a tight credit environment, a large number of bonds maturing will negatively affect the liquidity of project developers and increase loan financing costs of real estate businesses in the coming time.
"The possibility of rising interest rates and stricter control of real estate credit activities of banks today will greatly affect the liquidity of projects, cash flows and profits of businesses in 2022-2023", VDSC forecast.
Compiled by VietnamCredit