Property market to face three big pressures: Expert
The property market will become more volatile in the second half of the year with low liquidity, a listless secondary market and higher prices, an economist has predicted.
Apartments in HCMC's Thu Duc City. Photo by VnExpress/Huu Khoa.
The number of transactions in both the primary and secondary markets would decline by 30-50 percent, Huynh Phuoc Nghia, vice dean of the HCMC University of Economics's international business faculty, told VnExpress.
The flow of money into all segments like apartment, villa, shop-house, and land has slowed down due to the psychological impact of the Covid-19 outbreak, he said.
Prices are rigged by intermediates and investors in secondary market, so investors would find it difficult to make big profits this year, he said.
Meanwhile, flows of money into the realty market are mainly loans, especially short-term ones, he said, noting that recent land fevers have driven property prices to the inflated level, inciting many investors to borrow money to buy real estates to resell them.
Inflated prices of real estates have resulted in bigger bad debts which not only become a burden for the property market, but also affect the whole economy, because it takes a decade or more to solve bad debts, Nghia stated.
The State Bank of Vietnam, the country’s central bank, should tighten monitoring credits for the real estate sector, the expert said, noting that the credit growth in the sector has already reached 15 percent in the first months of this year, compared with the ceiling rate of 12 percent set by the bank.