Housing market recovery helps property firm shares
Housing market recovery helps property firm shares
The revival of the housing market has had a positive impact on the prices of shares of property companies, according to the Vietinbank Securities Company.
Dang Tran Hai Dang, the company's research and analysis deputy director, told a seminar on an overview of the real estate market and investment opportunities that most shares in the sector had outperformed the VN Index in the past three months though they gave up some of the gains in November when the market retreated.
In the past six months, the property sector accounted for the highest trading value, with 18.7 per cent of the total.
In terms of market capitalisation, the sector accounted for 12 per cent, second only to banking.
But Dang pointed out that in the first nine months of the year almost 40 per cent of the listed real estate companies saw profits fall while 22.4 per cent suffered losses.
In the short term investors should consider companies with projects at strategic locations, like near the railway route in Ha Noi, the metro lines in HCM City, and ports, airports and beach resorts in Da Nang, Nha Trang, and Phu Quoc.
However, they should be financially capable of ensuring the completion of their projects.
In the long term they should look for companies with lands in key areas and strong financial capacity, among others, he said.
Le Hoang Lan Nhu Ngoc, senior manager at property consultancy CBRE, said the lower interest rates on mortgages and their longer tenures of up to 25 years and higher household incomes were factors behind the market revival.
Improved infrastructure and laws were also lending a helping hand, she said.
In HCM City, more than 10,100 new apartments were sold last quarter, three times the number from a year earlier.
Resort projects in coastal areas were attracting a lot of interest from buyers, she said.
She expects the recovery of the property market to continue next year thanks to positive factors like Viet Nam's connection to the world through free trade agreements and the TPP as well as the more favourable regulations on mortgages and housing ownership by foreigners.
