The real estate market was getting warmer in May and June with more successful transactions reported, and then the Covid-19 outbreak occurred in July. The market has once again become unpredictable.

Experts worry that the real estate market is not just challenged by Covid-19, but also other unfavorable conditions, including the rising gold price and unsettled legal risks. The variables have sparked concerns about the grey picture of the real estate market in the next 12 months.

Nguyen Loc Hanh of Ngoc Chau A Real Estate Investment predicted that big difficulties are ahead as demand will drop dramatically while supply keeps increasing as a result of the May-June ‘euphoria syndrome’.

Hanh told VNexpress that real estate developers have fallen on the defensive as their sale plans for the last six months of the year have become upset because of the return of Covid-19.

He believes that sales will be decreasing in the time to come. The prices won’t fall in the primary market, but big discount rates will be offered to stimulate demand.

In the south, especially in the HCM City area, the new supply of apartments in Binh Duong, and the supply of land and townhouses in Dong Nai and Long An have increased sharply. 

Some projects, which were initially priced high, will have to change their pricing strategies and the developers will have to raise discount rates to boost sales.

Some projects, which were initially priced high, will have to change their pricing strategies and the developers will have to raise discount rates to boost sales.

The developer of a project in Long Thanh area in Dong Nai province initially planned to sell at VND22-25 million per square meter, but the official price quoted was 15-20 percent lower. The developer also offered a 10 percent discount rate to stimulate demand.

Hanh said the economy will face big difficulties and people’s income will decrease. People now are hoarding cash.

Rentals have also been affected in the crisis as demand and rents have dropped dramatically.

Meanwhile, Tran Khanh Quang, CEO of Viet An Hoa, thinks the gold price increase and interest rate reduction will affect realtors in the last months of the year. They will either inject money into underappreciated assets or keep cash. The transactions of land plots, garden lands with full legal status, and apartments priced at below VND2 billion are expected to lead the market.

The expert believes that the market would only begin seeing positive changes in late 2021.

Translated by Mai Lan 

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