House prices still rising despite Covid-19 impact

Compared to the end of 2019, the property price has still risen recently and showed some positive signs of recovery if Vietnam continues to well control the coronavirus pandemic. 

House prices still rising despite Covid-19 impact

Many companies in the real estate sector have restarted their businesses with new plans and strategies to adapt to the current market.
From the early 2020, though the Covid-19 pandemic has badly affected many industries, the property market is slightly suffered.
According to some related competent agencies, just 16 percent of apartments was sold in the first quarter of the year, lowest in four years and merely equivalent to 40 percent compared to the same period last year.
By May 2020, because many tourism facilities have reopened, the number of successful transactions in the second quarter of 2020 was about from 130 to 140 percent compared to the first quarter of 2020 nationwide. Businesses have quickly enjoyed Government's support policies after social distancing.
By the end of June 2020, there were 42,716 successful real estate transactions. Particularly, 2,521 and 6,774 real estate transactions have been successful in Hanoi and Ho Chi Minh City respectively.
While the demand for housing in the middle- and high-end apartment segment with price above VND25 million ( US$1,000) per square meter only accounts for 20-30 percent whereas the affordable segment with price below VND25 million per square meter accounts for 70-80 percent of market demand yet the supply is not falling well short of demand.
Reporting to the National Assembly about the realty market, the Ministry of Construction said after a long period of constant growth from 2014 to 2018, the real estate market in 2019 tended to decrease. Some indicators for the drop in realty market are the trading volume decreased by more than 40 percent and the supply of real estate projects decreased by 10 percent compared to 2018.
Though the supply of houses in the first six months of the year has increased, it still declined compared to the previous time. Moreover, there is a plentiful supply of middle- and high-end apartment segment while there is a shortage of social apartments and low-priced commercial houses.
Notably, the property price of the housing market in recent months still has witnessed a marginal year-on-year increase. While prices of apartment and separated houses in Hanoi are 0.16 percent and 0.01 percent percent higher than the same period last year respectively. Similarly, the price of apartment and separated houses in Ho Chi Minh City goes up 0.25 percent and 0.15 percent respectively compared to same period in 2019.
FDI inflows into Vietnam's real estate market ranks the second just after the processing and manufacturing industry. However, statistics by the Ministry of Planning and Investment show that by end of June, 2020, FDI capital registered in the realty field was US$850 million, accounting for 5.7 percent of total.
The Ministry of Construction forecasts that the market will continue to face certain difficulties in short term due to the impact of Covid-19. In the long run, real estate businesses, however, still show their optimistic signs and positive results especially the industrial real estate segment as foreign investors are pouring capital into the Southeast Asian country.

By Anh Phuong - Translated by Uyen Phuong

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