Real estate is still a safe investment channel
In 2020, before the impacts of the Covid-19 pandemic, traditional investment channels such as gold, stocks, bonds, and foreign currencies fluctuated continuously.
For example, gold, for the first time in history, the domestic gold price was recorded at the threshold of 60 million dong/tael. However, after only a few days, the gold price fell to the threshold of 55-56 million dong/tael.
Contrary to the fluctuations of gold, stocks or foreign currencies, the real estate market in 2020 will still grow vertically. Most of the segments have grown very strongly, especially the segment of houses, land plots or apartments.
Thanks to the stability, with a continuous increase, the real estate market in 2020 has attracted more than 30% of new capital flows, shifting from other investment channels to real estate.
Commenting on investment channels in 2021, many experts affirmed: Real estate is not the most profitable investment channel, but this is the safest channel.
According to Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam, in 2021, the real estate market will continue to be adversely affected by the Covid-19 pandemic. However, the level of influence is only local and has not witnessed a significant decline like 10 years ago (2010 – 2011).
Mr. Khuong said that in the period 2010 – 2011, the real estate market witnessed a 30% drop in prices. Some reasons for this phenomenon are: the market has grown too hot before, followed by the growth in overheated credit from 30-45%. At the same time, the growth in overnight interest rates from 10-12% to more than 20%.
In the current situation, although there are still many outstanding factors, the real estate market is very different from before.
Assuming that the economic growth rate, deposit interest rate, and deposit interest rate in 2021 will be the same as last year’s, the credit growth margin will still grow by approximately 30%, the exchange rate and exchange rate will still grow. Foreign currency prices are well controlled.
In the worst case scenario, the real estate market in 2021 will still grow like 2020 and cannot happen worse cases. This confirms that the real estate market is still at a safe level.
For individual investors, their investment trends also have certain shifts and changes.
Dr. Khuong analyzed: Normally, individual investors will tend to choose gold and real estate as safe haven channels.
In the past, in uncertain times such as wars and epidemics, investors would switch from risky investments with high liquidity to investments with less risk and lower liquidity.
If the previous generation, during wartime instability, hoarded gold, and now it is converted to real estate.
According to Mr. Khuong, 2021 is really an opportunity for individual investors to reconsider their business and real estate investment activities. At the same time, Mr. Khuong recommended that investors should consider when using financial leverage to invest in real estate.
Because, the market in 2021 will still have a bad impact on the market, especially the tourism, resort and retail real estate segments. If they use too much leverage, they will most likely not be able to pay the interest, including capital.
“For those with abundant financial capacity, investors can “surf”, but not rent,” Mr. Khuong said.
Class C apartment, rare but high profit rate
Meanwhile, assessing the most potential real estate segment in 2021, Ms. Vo Thi Khanh Trang – Head of Research, Savills Vietnam said: In Ho Chi Minh City, the consumption rate of Grade C apartments as high as 93% in 2020 and is expected to remain high in 2021 can be explained in addition to financial incentives, it is because the investors have made a difference in the projects. .
Besides, the supply of townhouses is also quite limited, while the value of Grade C apartments is reasonable and the quality of project development in this segment is increasingly improved with the orientation of creating a living environment for the community. with many local amenities.
Savills research also shows that the supply of Grade C apartments in 2021 will be less than in previous years due to increasing land costs, leading to less attractiveness to investors. .
In two big cities, Ho Chi Minh City and Hanoi, the supply for this segment is predicted to be 50% and 15% of the total supply expected to open for sale in 2021, respectively.
Ms. Trang said that the Grade C apartment segment will perform well in the near future. Because, the inventory of this product line is low and the new supply is limited. In addition, investors continue to boost demand with many incentives.
In general, about the market overview in 2021, many experts believe that the market is still stable and is a good opportunity for investors to consider switching from other investments to real estate investment to preserve capital, and because there are now more options on the market including highly liquid properties that were previously difficult to access.
According to Dan Tri