Real estate investors under strong pressure to lower prices
Some 20 percent of real estate investors are likely to have to lower prices by 5-10 percent to have money for restructuring portfolios or making due installment payments, experts say.
The eastern area of HCMC. Photo by VnExpress/Quynh Tran.
With sluggish sales amid the ongoing fourth wave of Covid-19, they will be forced to lower selling prices to quickly get the needed money, Tran Khanh Quang, CEO of Viet An Hoa Real Estate Investment Joint Stock Company in HCMC, told VnExpress.
Among the struggling investors, those who own real estate worth over VND20 billion ($869,000) are likely to slash their prices by 5 percent, and those who have more properties may lower prices by 5-10 percent.
"July is a key period for the fight against the pandemic. On the secondary real estate market, there will be sellers, no buyers, which will create stronger pressure for investors to lower selling prices," he said.
David Jackson, general director of real estate service provider Colliers Vietnam, said if the Covid-19 pandemic situation extends for several weeks, many investors who have borrowed money to buy properties or have not restructured their portfolios well will have to sell them at lower prices to cut losses.
The pandemic has heavily affected incomes of people and enterprises, and this has resulted in a stagnant real estate market, he noted.
VnExpress studies have found that there have been no price falls in the primary realty market during the ongoing Covid-19 outbreak, but there are signs of this happening in the secondary market. In late June, some investors slashed prices of condotels to cut losses or switched to other investment channels.
Huynh Phuoc Nghia, a senior advisor at Global Integration Business Consultants Company in HCMC, said the pandemic is adjusting the real estate market towards the true value of properties. According to him, real estate prices have been inflated too much by investors, and now some of them who rely on loans will be forced to lower prices.