Real estate market 2021: Prospects for which segment?

Minh Hoàng
April 27, 2021

This morning (March 19), Vietnam Report Joint Stock Company (Vietnam Report) announced the Top 10 prestigious real estate companies in 2021, notably information on market prospects. This year is segment-by-segment, and highlights some notable growth trends.

thi truong bat dong san 2021 trien vong voi phan khuc nao
Illustration

Real estate 2020 – a picture of fragmentation

The real estate market in 2020, according to Vietnam Report’s view, is a “fragmented picture”. Translation Covid-19 had a strong impact on retail, hotel and tourist real estate, while the office, land, and apartment segments were affected slightly.

The market almost froze in March and April. Many projects were delayed. But then, the market gradually recovered despite the continuing outbreaks in 2020.

Statistics of the Ministry of Construction show that as of the fourth quarter of 2020, there are 295 projects, with 125,449 licensed apartments; The tourism and resort projects have 49 projects, with 3,772 tourist apartments, 3,505 tourist villas and 48 licensed accommodation and office units nationwide.

According to the Vietnam Real Estate Brokerage Association, in the second half of 2020, there were 74,500 successfully traded products, equivalent to 50% of successful transactions in 2019.

In 2020, the real estate industry grows by 0.31% compared to 2019 and contributes 4.42% of the country’s GDP. In which, the outstanding segment is the industrial real estate segment and the housing segment. In addition, real estate in the provinces near Hanoi, City. Ho Chi Minh City, resort real estate in the Northwest mountainous areas such as Hoa Binh, Phu Tho, Sapa Lao Cai … all recorded good signals.

According to the General Statistics Office, the disbursement of foreign investment (FDI) real estate industry in 2020 reaches 3 billion USD, accounting for 14.8% of total realized FDI.

The imbalance between supply and demand continues when the demand for housing for low, medium and middle income people is quite large, but the supply is limited. The number of low-priced houses (houses under VND 2 billion) plummeted, in the city. In Ho Chi Minh City and Hanoi, there are no low-priced housing projects large enough to launch to the market, projects with less than 1,000 products are not available, or even considered “disappear” with this market segment.

Meanwhile, the luxury home market has increased, especially in prime locations and places with few new products, especially in the duplex segment, penthouse … There were products previously VND150 million. / m2 is now up to 200 million VND / m2, even 300 million VND / m2 as confirming the position of its owners.

The rental market declined in all aspects, including housing, condotel, officetel, resort tourism …, it could even be said to be frozen. However, in the market of discontinuous purchase prices, the real demand increased, even at the end of the year, compared to the middle of the year, it increased by 20% for products with good prices.

With a segmented and segmented picture in 2020, the business situation of businesses in the real estate industry has a strong divergence, many business units suffer losses and do not have the finance to maintain. keep active. According to statistics of the Ministry of Construction, up to 978 enterprises have to dissolve.

Six factors to help real estate businesses surpass Covid-19

thi truong bat dong san 2021 trien vong voi phan khuc nao

5 khó khăn của thị trường bất động sản 2021

Với năm 2021, theo Vietnam Report, thị trường bất động sản phải đối mặt với 5 khó khăn lớn nhất, đó là: (i) Diễn biến khó lường của đại dịch Covid-19; (ii) Chính sách Condotel: Cho đến nay vẫn chưa có văn bản nào về chính sách Condotel, Officetel, shophouse… dẫn đến vẫn còn có sự khác nhau giữa địa phương này và địa phương khác; (iii) Quy trình cấp phép, thẩm định phê duyệt đầu tư xây dựng các dự án còn lâu, phức tạp và nhiều công đoạn; (iv) Hạn chế về tín dụng khi không sửa đổi thông tư, doanh nghiệp gặp khó khăn trong tiếp cận nguồn vốn giá rẻ và (v) Thuế như chính sách thuế giao dịch liên kết vẫn còn nhiều phức tạp, làm cho các nhà đầu tư bất động sản chưa thực sự yên tâm. Chính sách này dùng để chống chuyển giá chứ không ban hành để chống giao dịch trong thị trường bất động sản và cuối cùng thị trường bất động sản lại phải hứng chịu những tác động không mong muốn đó.

Nhưng bên cạnh đó, kết quả khảo sát chuyên gia và doanh nghiệp bất động sản của Vietnam Report trên thang Li-kert 5 điểm đã chỉ ra top 5 yếu tố tạo xung lực phát triển mạnh nhất đến thị trường bất động sản trong năm 2021, đó là: (i) Nút thắt trong chính sách bất động sản được gỡ bỏ; (ii) Khả năng kiểm soát dịch bệnh; (iii) Sức chịu đựng và khả năng phục hồi nền kinh tế sau đại dịch Covid-19; (iv) Dòng vốn FDI chảy vào Việt Nam; (v) Lãi suất giảm.

5 yếu tố yếu tố tạo xung lực phát triển thị trường bất động sản năm 2021

thi truong bat dong san 2021 trien vong voi phan khuc nao

First, the bottleneck in real estate policy is removed. In 2020, the real estate market is stalled. One is due to legal procedures, when there are many overlapping laws, the highest point is in the period 2019-2020. State management agencies, legislatures also understand this issue, initially there are Circulars, Decrees, instructions to answer questions and problems left in the 2019-2020 period. Therefore, the year 2021 will have more favorable legal procedures for the real estate market.

Specifically, the introduction and supplementation of Decree No. 25, Circular 21 of the Ministry of Construction, Resolution 164 helps to remove legal for real estate projects; Decree 148 amending and supplementing a number of decrees detailing the implementation of the Land Law, effective from February 8, 2021, with important contents on rescuing thousands of projects with trapped land is expected. will remove supply shortages bottlenecks.

Besides, according to experts in the survey of Vietnam Report, the biggest motivating factor is the Disbursement Policy for public investment and this is considered the salvation when things are delayed, determined to resolve. Public investment is the strongest policy in 2020 and 2021.

Second, the ability to control the disease. When Covid-19 appeared, it reduced the purchasing power of the whole 2020 economy in general. Not only tourism, agricultural products, and commerce, but also in the real estate industry, the purchasing power of the market is also significantly reduced. Except for localities with special happenings like TP. In Ho Chi Minh City, although house and land prices have increased, purchasing power is still good. In some localities, including Hanoi, not all prices can be sold.

There are vaccines in the world now, but even the United States, which is the largest vaccine economy in the world, still thinks that the epidemic is only under control by the end of 2021 and that the US economy could return. normal in 2022. In other countries, Europe as well as Asia, the disease situation is still very serious.

Third, good economic resilience and stamina. In terms of general rule, the market has times of going up and down with a sine wave, but in 2020 it has dropped to a very low level. Vietnam’s economy is in the recovery phase, GDP of Vietnam in 2020 will increase by 2.91%, the lowest level in the past 10 years.

In the Asia Pacific region, Vietnam is one of three countries with positive growth, including Vietnam, China, and New Zealand. With such growth rates, of course, very low, but emerged as one of the economies of positive growth in the face of a strong epidemic worldwide. Vietnam will continue to recover in 2021 and the GDP growth desired by the Government is about 6%. This is a challenging growth for the Vietnamese economy but feasible.

With the premise that Vietnam’s economy continues to recover and grow, accordingly, the real estate market will also continue to recover when there are advantages and ripe opportunities.

Fourth, ODA flows into Vietnam. Under the impact of the US-China trade war, Vietnam’s strong commitment to the new generation of FTAs ​​and more importantly, Vietnam still ensures the capital flow requirement until it is in an economic, growth zone. Political, social stability and the country and people who want to rise are the three factors that attract capital flows to Vietnam.

Therefore, FDI in the real estate sector is forecasted to increase strongly in the coming time because a large amount of capital from newly established real estate investment funds is ready to enter Vietnam, along with increased exports due to Benefit from the signed trade agreements, tourism activities will warm up and more foreign investors will gradually be allowed to enter Vietnam, along with macroeconomic policies, microeconomic policies, policies financially adjusted flexibly… will contribute to promote and push the real estate market to heat up.

Fifth, lower interest rates. When the gold market has many risks, the foreign currency market is tightly managed and does not bring interest rates, the inevitable trend is that the cash flow will strongly flow into the stock market. Many investors borrow money to invest in stocks.

According to an expert in a survey of Vietnam Report, if stocks continue to rise sharply as at present, they may lead to a bubble. But if all real estate procedures are removed, the market returns to normal levels and there are adjustments to create a more balanced development for the whole economy. At that time, compared to the securities investment channel, real estate investment was more stable, although the resort real estate segment was strongly affected by the epidemic.

Regarding the Government’s policy, the recently lowered interest rates have greatly supported the real estate market on both sides, including traders and real estate builders when they can borrow money from banks. Low interest rates, reducing capital costs and good support in real estate construction. Real estate buyers also benefit from borrowing money at lower interest rates. Low interest rate policy has supported real estate market.

thi truong bat dong san 2021 trien vong voi phan khuc nao

According to experts and businesses in the survey of Vietnam Report, some segments that will continue to attract cash flow are industrial real estate, mid-range apartments priced from 25 – 30 million / m2 to serve the demand. In real life, serviced real estate, housing associated with industrial zones cost between 1-3 billion and mountain resort real estate continue to be positive.

Resort real estate is the segment most affected, but in the second half of 2021, if the vaccine is deployed on a large scale, it could be developed again. Because resort real estate is seasonal, it only needs to be active for 6 months to recover and compensate for losses throughout the year. Therefore, whether this segment can revive or not depends very much on its ability to control and repel Covid-19.

During the Covid-19 boom, the market was able to see many speculators on land and real estate resorts in Da Nang and Nha Trang facing many difficulties and falling into situations waiting for the market to fully recover. .

In the North, there are already many mountain resorts and in 2021 it is forecasted to continue to be positive. Tourist destinations about an hour or two from the city have become popular as residents are restricting travel or using planes for vacations.

Office building segment in 2021 has two trends: (i) focusing on projects that have the potential to revive, projects with favorable locations and (ii) with projects that do not have prospects. New projects born in unfavorable locations will face difficulties and will be temporarily “overshadowed”.

The land plot segment, which is not subdued by any factor, is still very “hot”, especially in areas with large planning and projects, and areas with high levels of development. This is a permanent product, and the value is increasing all the time, it is only a matter of time and scale.

In addition, the pervasive land at large projects such as the buffer zone of Long Thanh airport, the corridor of transport infrastructure works, the border area of ​​the emerging industrial zones – is the affected area, the buffer zone will become trend, especially when TP. Ho Chi Minh City is questioning the policy of revoking the corridor on both sides of the infrastructure to auction construction planning.

The residential real estate segment for low-income people is in great demand, but investors are not interested in putting money in, because the profit margin is very low. In order for this segment to grow, it is necessary to support the Government in encouraging investors, and banks to invest more in the low-income housing segment.

This segment currently needs a lot of capital, but the financial system of Vietnam is pouring money into this segment very slowly. Therefore, the growth rate of this segment is relatively low in 2021.

High-end real estate segment in big cities like Hanoi or Ho Chi Minh City. Ho Chi Minh City is gaining value and many foreign investors are also investing in this market segment.

Industrial zone real estate in the next 2-3 years may also have good potential as some investors in China and other countries are planning to relocate their factories to Vietnam. . This is a fertile land that everyone wants to invest in.

However, to be able to invest in industrial real estate at this time is not easy because it is related to the planning of industrial parks, transport infrastructure …

According to experts in the survey of Vietnam Report, currently there has not been a wave of foreign investors entering Vietnam. At this point, there are only a few large enterprises entering Vietnam but have not seen a move.

In particular, in the context of the trade war between the US and China is gradually easing. Therefore, the movement of some US businesses to Vietnam will probably not take place as strongly as predicted.

Besides, industrial real estate recently was very different from industrial real estate 10-15 years ago. If in the past, the investors in industrial real estate only worked on infrastructure, then they waited for the investors to come to rent factories, and the investors had to build the factories themselves; But now, the form of industrial real estate business in Vietnam has changed, investors can also build completely ready-built warehouses, factories and then rent out. Besides, not only investment in factories, factories, but also warehouse leasing is an effective form of industrial real estate investment.

The agricultural real estate segment is currently many people interested. Because the area of ​​agricultural land is so much, almost every province in Vietnam has agricultural real estate. But whether investing in agricultural real estate is a boon for investors is still questionable as they cannot turn agricultural real estate into resort real estate, commercial real estate or not. industrial real estate.

Transforming agricultural property into land that can be used as other real estate is not easy, and requires

thi truong bat dong san 2021 trien vong voi phan khuc nao

According to statistics of research company Statista, the Vietnamese smart home market has a revenue of about 83 million USD in 2019 and is forecasted that this market size will reach about 437 million USD by 2023, equivalent to the growth rate. growth is expected to 51.7% in the period of 2019-2023.

However, a survey of Vietnam Report with home buyers pointed out the top 4 concerns about smart homes, including: Price; Information security; The ability to perform smart home features; Technology reliability. In particular, high cost is also the biggest obstacle in the development of smart housing, the cost of deploying and installing smart home devices is usually between 50 million and several billion dong, so the audience uses This segment is often used by high-income earners.

4 home buyers concerns about smart home

thi truong bat dong san 2021 trien vong voi phan khuc nao

Online real estate services continue to grow and boom

With the development of the 4.0 revolution, technology is seen as the key to empower businesses in general and real estate businesses in particular. Besides the traditional business model, the business model applying digital transformation is gradually dominating the market, creating new competition.

Currently on the market there are two types of enterprises that develop technology application in real estate (proptech), which are traditional real estate enterprises performing digital transformation and start-up businesses building protech platforms. . Some real estate companies have built a closed itinerary application from product introduction to operation.

Survey results of Vietnam Report with home buyers in March 2021 show that the most popular choice of information channels before buying real estate is from Referrals of friends and relatives (68,15 %); Sharing forums, real estate groups (65.93%); Specialist pages on real estate on the internet (35.36%); Consulting company, brokerage (35.36%). In addition, up to 16.30% of respondents consult information from real estate brokerage apps and nearly 2% of people learn through livestreams.

Using virtual reality technology allows the broker to bring a realistic image of the house to buyers without leaving the house in the context of epidemics, limiting crowds. Research results of Vietnam Report also showed that 22.96% of people used to use brokerage apps and will continue to use them; 62.22% of people have never, but will try it in the future. Besides, there are still 11.85% of respondents who have never and do not want to use them because of concerns about risks in personal information security, fear of fraud.

Reviews of real estate transactions on the app

thi truong bat dong san 2021 trien vong voi phan khuc nao

5 priority corporate strategies of the post-Covid-19 era

The survey results of real estate enterprises by Vietnam Report showed top 5 priority strategies for real estate businesses in the post-Covid-19 period. In addition to the strategy of ensuring the effectiveness and quality of the existing project and developing new brands and products as in previous years, this year businesses choose to add strategies including: Implementing M&A, invest in the acquisition of potential real estate projects; Recruit and train qualified human resources to respond to new contexts and Restructuring apparatus, human resources and lean business solutions.

5 priority strategies for real estate business after Covid-19

thi truong bat dong san 2021 trien vong voi phan khuc nao

Evaluate the media reputation of real estate businesses
Building prestige and brand name in the market helps real estate businesses overcome difficulties during the Covid-19 pandemic.

Evaluation of the reputation of businesses in the real estate industry through their presence on influential media channels from January 2020 to the end of January 2021 shows that nearly 54.4% of sales The enterprises studied with an average frequency of appearing once a week, of which Vinhomes is the enterprise with the highest number of coding units (encoded information units).

In terms of the diversity of images in the media: 65.82% of businesses reach 10/24 covered topic groups, Novaland is the highest with 21 out of 24 groups. Top 5 topics that are most mentioned are: Products, Finance / Business results, Image, Stocks and Business strategy / M&A.

The positive – negative news ratios of the 10 topics that appear the most on raw media

thi truong bat dong san 2021 trien vong voi phan khuc nao

The enterprise’s initiative in the media is also considered an important factor affecting the corporate media reputation risk management. As a practice, to ensure accurate information and increase credibility with recipients, at least one-third of information about businesses in the media should be sourced from businesses and senior leaders. of the business (members of the Board of Directors / Board of Directors). However, the analytical results showed that the amount of information sourced from enterprises in the research period was only 23.6%.

In terms of information quality, enterprises are rated as “safe” when they reach the ratio of positive and negative information difference to the total amount of information encoded at 10%, but the “best” threshold is over 20%. In the real estate industry, 73.42% of businesses studied achieved this 10%. It should also be noted that the more businesses appear in the media, the harder it is to get the “best” rate compared to businesses with less presence, especially maintaining this rate for 12 months. of one year of operation.

Regarding information fluctuations by month, despite the impact of the pandemic, the real estate industry has strictly controlled information, the negative news only outperformed the “safe” level in the months. 3, 8, 9, 11. The rate of positive news increased higher in the last months of the year when the market recovered.

(According to Vietnam Report)

In addition to the analysis of the real estate market in 2021, Vietnam Report also announced the list of Top 10 prestigious real estate investors in 2021; Top 10 prestigious industrial real estate companies in 2021; and Top 10 prestigious Vietnamese real estate consulting & brokerage companies in 2021.

thi truong bat dong san 2021 trien vong voi phan khuc nao
thi truong bat dong san 2021 trien vong voi phan khuc nao
thi truong bat dong san 2021 trien vong voi phan khuc nao

Source: M.Hong