Identification of "hot" real estate spots at the end of the year

The spontaneous land segment will return to real value. Photo: H. Anh.

The popular segment will grow strongly

By the end of September, 2018, the real estate market has gone through a complete journey with exciting activity across all segments. Overview of real estate market in recent time, Vietnam Real Estate Association said that the two ‘big’ economic operators, Hanoi and Ho Chi Minh City, have relatively stable trading activities and prospects with abundant supply, rich transactions, but real estate prices have not really increased, even many projects have reduced prices. For example, in Hanoi, the number of transactions in nine months has not been announced but in the first half of 2018, the number of transactions increased by 31% compared to 2017. According to the real estate market in late 2018, the Vietnam Real Estate Brokerage Association predicted that the main market source would be the affordable housing segment, and there would be fiercer competition in the high-end segment.

Take the example from Ho Chi Minh City market, Dr. Su Ngoc Khuong, Investment Director of Savills Vietnam, said that the suburban areas such as District 9, Nha Be and Binh Chanh attract investors because of the land fund for the project development. Buyers are also interested because the product is well suited to the financial situation; the location of the project is well connected to the city center as well as adjacent areas have developed public facilities. "Most of the coastal projects target cheap housing because of the abundant land resources, low land costs and low project development costs. Meanwhile, the demand for affordable housing is huge. At present, the land funds in the vicinity of Ho Chi Minh City have created fierce competition between domestic and foreign investors to acquire and grasp the demand for housing, which is very high here." Dr. Su Ngoc Khuong said.

Concerned with this assessment when forecasting real estate market from now until Lunar New Year 2019, Mr. Le Hoang Chau, chairman of HCMC Real Estate Association said that the real estate market will develop better since this is also the peak of the real estate market. Accordingly, the affordable housing segment will grow strongly and together with the mid-end segment, will continue to play a dominant role in the market. During this time, the construction standards of Vietnam allowing the construction of commercial apartments with an area of less than 45 m2 is expected to be issued and will facilitate the development of cheap apartments, including cheap apartments for rent.

On the topic of "hot" segments in the past, Mr. Le Hoang Chau said that the price of these segments will return to real value. Previously, since early 2018, there have been local land fever events in some localities such as Hanoi, Ho Chi Minh City, Da Nang, Vinh Phuc, Bac Ninh, Hung Yen, and especially in future special zones such as Van Don, Northern Van Phong and Phu Quoc. This is due to the fact that these are localities with large industrial zones with high potential for tourism, high demand for housing, with synchronous land lease infrastructure and legal transparency... so the land price in these localities has sometimes increased from 30-50%. For future speculators, the ground is pushed higher due to speculation and market sentiment.

Social housing: disbursed 200 billion VND

Prior to that, some information on the property market was also of public concern, which is information on real estate projects mortgaged at banks with loans for social housing. In terms of funding for social housing, in 2018, the government spent 1,000 billion VND implementing this policy, of which 500 billion VND was central budget and 500 billion VND was taken from mobilized resources from banks. In early April, the Prime Minister signed the Decision 370/QD-TTg on the preferential interest rates for social housing at the Bank for Social Policies, and also from this time, the Bank for Social Policies started implementing the housing loan program with the plan to disburse about 1,000 billion VND in 2018.

According to Mr. Nguyen Van Ly, deputy general director of the Social Policy Bank, as of 31 September, 2018, total outstanding loans of this program reached 200 billion VND with over 700 customers in 50 provinces. The provinces with high outstanding loans are Quang Nam, Da Nang, Bac Ninh, Bac Giang, Hung Yen, Quang Binh, Thua Thien Hue... With Hanoi and Ho Chi Minh City, according to representatives of the Social Policy Bank, disbursement of social housing loans in these two localities is still low because some investors have mortgaged their loans at other banks. Both localities have their own social housing programs.

Sharing information about the problems in the disbursement process, Mr. Nguyen Van Ly said the problem is still of concern. In this, the representative of the bank emphasized that the problem of social housing was previously the project owner called for borrowed capital from other banks. So far, people want to borrow from the Social Policy Bank to buy, the project owner must release the apartment, however, this is a matter that needs a lot of time.

Many are of the opinion that with the disbursement at the end of September 2018 of 200/1,000 billion VND, the disbursement of 1,000 billion VND for social housing in 2018 will be difficult to achieve. Representatives of the Bank for Social Policies said that the bank is keen to accelerate the disbursement process but must consider many aspects because quick loans are error prone, easy to mismanage to wrong subjects. According to the representative of the bank, the disbursement progress as above is appropriate and will basically disburse as planned.

In addition, in the past, many real estate projects mortgaged at banks continue to raise concerns. In Hanoi, the Land Registration Office of the Hanoi Department of Natural Resources and Environment recently published a list of investors who have registered mortgages using land use rights, mortgages, housing and housing in the future, under the housing development projects in Hanoi. Accordingly, there are all 92 projects that are mortgaged by future land use rights or land-related assets such as projects, apartments, houses... According to experts, according to the regulations of Real estate business law, real estate projects when selling goods must carry out procedures to provide guarantees to home buyers. In addition, the Law on Credit Institutions stipulates that when providing property owners with loans, they must have collateral assets which may come from the project itself or other assets of the investor. It is important that the investor and the bank jointly carry out the procedures to receive the property mortgage, secure transaction registration and partial asset disassembly when selling goods to customers in order to secure benefits for customers.