Global housing fever: a warning for Vietnam

The Vietnamese real estate market has grown strongly in recent years and will remain an attractive investment channel for domestic and foreign investors.

Less than a day after signing an agreement with a client for a 3-bedroom house in Sacramento, Calif., Andrea White, a real estate agent in the United States, received an attractive offer from another client.

They were prepared to pay up to $ 520,000, which was $ 21,000 more than the offer price and 37% more than two years ago. House prices in all parts of the United States have risen by double digits year over year, according to statistics from Zillow.

Not only in the United States, global house prices have also increased. The first months of 2021 saw a positive recovery with average price growth of 3.9%.

According to the Savills survey of the housing market recovery in 30 cities around the world, from mid-2018 to the end of 2020, the housing market in these cities edged up 0.7%, largely due to unrest social, policy changes and tariffs. in many countries and subsequently the Covid-19 pandemic.

However, in the first half of 2021, the high-end real estate market recorded a recovery in many countries, with average price growth of 3.9%, the fastest rate since December 2016.

In the first half of 2021, more than 70% of the cities in the survey recorded growth in the value of residential properties. Cities that have experienced negative growth are those that were previously largely dependent on demand from international customers.

In the United States, Los Angeles and Miami took the lead with a growth rate of more than 9% in the first half of 2021, thanks to the advantage of a large area as well as favorable weather.

In Asia, China saw marked growth in residential property prices in 2021, despite tighter financial regulations and numerous policy changes by provinces and cities to cool the market. Growth in Guangzhou was recorded at 7.9%, while it reached 13.7% in Shanghai.

Several cities such as Singapore, Bangkok and Kuala Lumpur have also seen price growth recently, largely due to increased demand but limited supply.

In Hong Kong, residential property prices fell between 2019 and the first half of 2020 due to uncertainties in the social situation. This market has started to show signs of recovery with an increase of 1.9% in the first 6 months of 2021, thanks to low interest rates and the reopening of tourism activities.

In Europe, real estate values ​​in London are stable in 2020 and increase by 1.1% in the first half of 2021. At the same time, the Paris real estate market records a drop in prices and a drop in the number of transactions compared to the previous year. The main reason was the prolonged lockdown, thus negatively affecting the confidence of buyers in this market.

Real estate assets 4 times greater than global GDP

As the world’s largest store of wealth, global real estate values ​​exceed the combined value of stocks and bonds, and nearly four times the global GDP. The value of all gold mines today is around $ 12.1 trillion, which is equivalent to only 4% of the world’s real estate value.

The value of all types of real estate globally hit a record high of $ 326.5 trillion in 2020, up 5% from 2019. This growth was driven by housing development, which is the largest real estate segment, equivalent to 79% of the global real estate total. real estate value. The value of residential real estate rose 8% to $ 258.5 trillion in the past year.

Not only registering price growth, the number of transactions in many cities has also increased sharply, especially compared to the same period in 2020.

Positive factors for the market are low interest rates, improved buyer confidence, and increased number of high value deals and economic stimulus. As many countries gradually open their borders, the market can expect increased demand.

Uncertainties due to the Covid-19 epidemic may still persist, but signs of economic recovery will bolster investor confidence, thus boosting real estate demand by the end of the year.

Signs of fever in Vietnam

Global housing fever: a warning for Vietnam

Vietnam’s real estate market has turned hot. According to surveys by real estate consultancy firms, Covid-19 has shut down many economic activities, but residential real estate in Vietnam remains one of the fastest growing markets in Southeast Asia. East.

For 10 consecutive quarters, the apartment market in Hanoi has recorded an increase in prices, with around 14% / year since 2017 in the Cau Giay district of Hanoi. In Ho Chi Minh City, the price has increased by 15-20% in District 7, District 9 and Nha Be.

The real estate market has developed strongly in recent years and will remain an attractive investment channel for domestic and foreign investors. With favorable factors such as political stability, positive forecasts for the economy, increased foreign investment capital, large population and increasing purchasing power, and the signing of numerous free trade agreements , the Vietnamese real estate market should have a lot of room for development.

According to real estate experts, in the long term, house prices in major cities will continue to rise due to many factors.

In central neighborhoods, new projects are increasingly rare, while the demand for housing is on the rise. Vietnam’s current urbanization rate is only around 35%, and around 49% in Hanoi, quite low compared to the region and the world. With the low rate of urbanization, migrants from the provinces to Hanoi will increase, while housing is a need of all.

Real estate experts said the land fund has not changed, so it is difficult for house prices to be adjusted downward. In addition, the input costs of housing projects have also increased, shifting from the price of land, building materials to labor … to drive up housing prices. When demand increases and supply is limited, housing prices in central areas or places with convenient transportation, health care and other public services will increase.

Matthew Powell, director of Savills Hanoi, said commercial real estate, industrial real estate and commercial real estate will also grow. The supply of commercial real estate in Hanoi compared to other cities in the world is still quite limited. The demand for industrial real estate has also grown rapidly in recent years with many new types such as data centers, logistics centers or industrial cold stores.

Duy Anh

Real estate agents spend billions of dong to buy land during pandemic

Real estate agents spend billions of dong to buy land during pandemic

Real estate agents with strong financial capacity collect land for large projects in the future.

The real estate market awaits an amendment to the investment law

The real estate market awaits an amendment to the investment law

The amended 2020 Investment Law is expected to increase housing supply.

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