Economic downturn killing off property speculators
Economic downturn killing off property speculators
The current economic downturn has seen speculators flee the Ho Chi Minh City real estate market, which is in stark contrast to a few years ago when they flocked to it for big and easy money.
Secondary investors – i.e speculators who buy houses and land to resell for profit – have nearly disappeared as a result of cash shortages and poor market liquidity, said Nguyen Xuan Loc, general director of a property arm under local lender Techcombank.
Four or five years ago, such investors could easily take out bank loans, buy a land plot or an under-construction apartment, and then sell them one day later to reap huge bucks.
Things have changed a lot as banks have since tightened their credit valve and thus frozen the city property market following government efforts to rein in inflation and cool down the entire economy once left to grow uncontrollably.
As a result, few such investors visited city trading floors for transactions recently even though land and houses are now up to 40 per cent cheaper than one year ago, property agents say.
Ly Thanh Binh, owner of a brokerage firm in District 9, complained land transactions are now much fewer than several months ago although prices already fell by 20 per cent.
“Now I merely close one deal each month, a three-fold drop compared to late last year,” Binh said.
An agent at Hung Loc Phat Trading Floor in the same district, Duong said very few speculators came to it lately.
“If any, they dropped by to check prices only,” she added.
Speculators almost run away from the market, Nguyen Thi Cam Nhung, working for a trading floor in Binh Chanh district. Buying decreased by 30 to 40 per cent in the year to date, Nhung added.
Many agents say land prices slumped 30 to 40 per cent from last year in districts 7 and 12, and Hoc Mon district but hardly any transaction has been made so far.
“Only end-users with cash in hand would buy now,” said Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association.
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