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The seminar attracted the attention of a large number of investors. Photo T.D

Market with "bass notes"

Real estate experts said so at the seminar "Real estate investment opportunities in the vicinity of Ho Chi Minh City in 2020" organised by Real Estate Investment Page of CafeLand of Investor Magazine on 5 December.

Dr. Vo Tri Thanh, former head of the Central Economic Research Institute, said despite great potential, the real estate market in 2019 has had more "bass notes" than the same period last year. This was most evident in Hanoi and Ho Chi Minh City. Currently, Ho Chi Minh City has many projects that are congested at about 100. Forecasts for 2020 have it unlikely to see sudden changes in supply and transactions, depending on the segment. HCM City's inner supply will remain scarce in 2020.

According to Ho Chi Minh City Department of Construction, in the first nine months of 2019, only one project was approved for investment policy, 12 were accepted and no new projects were accepted. Corresponding to the above figure, only 11,830 apartments were approved for investment and 10,085 completed apartments. This is only a third of the previous year.

The supply shortage was because newly licensed projects were limited. Not only that, many projects in Ho Chi Minh City have been suspended due to inspections related to use of public land. Therefore, land prices in many places in Ho Chi Minh City are still increasing or only slightly decreasing. Currently, the price of land in Ho Chi Minh City is very high; the frontage of many roads in districts far from the center such as District 12, District 8 also reaches hundreds of millions of dong per m2 and in small roads also up to 30-80 million dong/m2.

In general, the market is quite tought, but most new projects successfully launched about 70-80 percent, especially the mid-range segment. In the luxury segment, the price volatility ratio compared to other segments is expected to increase. However, at current prices, many investors find it hard to squeeze, so the tendency to search for coastal areas is inevitable.

Delegates exchange at the workshop.

In 2020, the suburban area will decide on supply

According to experts, the real estate market in the provinces surrounding Ho Chi Minh City such as Binh Duong, Dong Nai, Long An and Ba RiaVung Tau recently developed strongly and formed a new price ground. Especially, with the plan of developing Long Thanh airport, the price of land in Nhon Trach, Long Thanh has a "fever" very quickly.

The province with a population growth rate, a high urbanisation rate is Binh Duong, which has a vibrant real estate market and high housing prices. It is noted that the price of residential land, ready-built townhouses in Binh Duong has an increase of about 15-20 percent within a year, particularly for projects that have a certificate of land use rights, the increase is from 25 percent - 30 percent/year. Especially the areas bordering Ho Chi Minh City have increased sharply in the last three years. Compared to 2017, some projects in Di An town area have an increase of 60-100 percent.

In addition, investment capital of real estate businesses tends to move to surrounding areas to find opportunities. Vo Huynh Tuan Kiet, Deputy Director, Head of CBRE Vietnam's housing project marketing division, said investors are expanding the segment and geographical position. With the scarcity of land bank at the center, project developers are looking for land banks around Ho Chi Minh City and neighbouring provinces such as Dong Nai, Binh Duong, Long An.

From this fact, Kiet predicts urban areas in suburban districts will be the main source of supply in the real estate market in 2020. In which, townhouses will be favoured, especially projects with reputable investors.

However, Kiet also said the market last year was greatly affected by the consequences of ghost projects. Many investors are worried about virtual projects that cannot be implemented with other factors. Previously, product selection was based on location and infrastructure. Currently the trend has changed. Position, legal and reputation are considered factors when making investment decisions.