Experts explain the real estate fever at the beginning of the year

Minh Hoàng
April 19, 2021

At the “Spring Real Estate Talk” organized by the Vietnam Real Estate e-magazine Reatimes, experts gave explanations about the real estate fever at the beginning of the year and the consequences surrounding this fever. .

Regulations on subdivision for sale causing land fever

– According to Nguyen Manh Ha, Chairman of the Vietnam Real Estate Brokerage Association, despite the difficulties caused by the Covid-19 epidemic, real estate prices have still risen sharply. Especially in the first months of the year, this price increase phenomenon took place strongly, appearing hot fevers in many parts of the country. Mr. Ha said that there were 2 causes that caused the land fever over the past time. First, after gold and securities, real estate is still an attractive investment channel for preserving and increasing asset value. Second, the big cities continue to face the scarcity and shortage of supply that makes real estate prices soar.

– A common scenario for the land fever at the beginning of the year is to follow planning information such as proposed airports, highways, super projects. However, notably, this “fever” this time not only comes from clearly planned areas, with construction permits, but also occurs in locations that are not in the planning. Even residential land in the village, agricultural land, forest land … also increased rapidly.

– Mr. Ha emphasized that the “land fever” not only destroys the economy, society, jobs of the people … Therefore, the State and local leaders must pay close attention and control this situation.

Experts gave explanations about the ground fever early in the year

– GS. Dang Hung Vo believes that another cause of land fevers is the impact of the 2013 Land Law expanding regulations on subdivision for sale. In many countries around the world, the form of subdivision for sale is to settle urban housing, not to commercial. However, in Vietnam, the commercial introduction of plots for sale has pushed up land prices and caused land fevers. Mr. Vo emphasized that investing in real estate waiting for price increases and then selling is an act of harming the economy. The investment must exploit the value of investment on land to bring efficiency to the economy.

– In fact, from 2016 to 2020, during this period, the Government has instructed four times on amending the Land Law. But so far, the Land Law has not been revised. The major shortcomings of the Land Law are hindering the economic development of Vietnam. “I think that perhaps until 2023, this Law can make changes”, Mr. Vo said.

– Real estate stocks benefit from land fever
Also at the seminar, Dr. Can Van Luc, chief economist of BIDV, said that by 2020, the construction sector has a good growth. The added value of the whole industry is 6.5%, contributing a not small proportion in the GDP. The stock prices of listed construction companies increased by 27% in 2020 and until now, in the first quarter of 2021, the price of minerals increased by 31%. This shows that the real estate and construction sectors are relatively positive. Mr. Luc forecasts that by the end of Q1 / 2021, due to the impact of land fever, real estate stocks will increase by about 15%. As for the construction sector, last year there was a very good growth, the whole industry value increased by 6.5%, making an important contribution to GDP.

– Foreign investment inflows into Vietnamese real estate also increased sharply in the past year. In 2020, newly registered capital in real estate will reach 2.3 billion USD. The trend of foreign investors contributing capital to buy shares and buy real estate in 2020 also increases strongly. In which, foreign-invested enterprises that contribute capital to buy shares account for 26% of the total capital contribution and share purchase of the country, reaching about 2 billion USD. This capital will contribute significantly to promoting the development of the real estate market in Vietnam in particular and the economy of Vietnam in general.

Source: Duy Bach

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