Money once poured into real estate now goes to fashion

Real estate, in the eyes of investors, is the most profitable and least risky business field.

Money once poured into real estate now goes to fashion

Nguyen Manh Thang, director of an investment company in Hanoi, is well known for his education projects. However, he has now injected money into real estate.

Thang said as schools have been hit hard by Covid-19, he has had to shift to another business. Thang and a group of investors are developing a housing project in Thai Nguyen.

“Real estate is the most profitable sector and the risk is low,” he said.

A report released at a seminar held in late 2020 in Thanh Hoa showed that among the country's more than 12,000 millionaires, 90 percent of them had invested in realty, and among the 100 richest people in the country with fortunes of more than $30 million each, investment in the real estate sector had reached 99.1 percent.

Analysts said investors fear that the inflation rate will escalate as countries pump more money to recover the economies in the post-Covid-19 period. In this condition, it would be wise to invest in real estate, which helps preserve capital and serves as shelter for the time being.

Do Tien Dung company has been making big profits from car sale, but he still decided to invest in real estate. In 2020, his business in HCM City invested in a seafront real estate project which now brings profit of 10 percent.

Dung will expand investment in the real estate sector because land has become cheaper because of Covid. He is busy surveying the land prices in some provinces to prepare for the next projects.

“You can only get rich if you invest in real estate” is the popular saying of investors. The recovery period of the real estate market in 2014-2019 was considered the golden time for investors to make money. The profit that surfing investors could earn was up to 150 percent.

The General Statistics Office (GSO) reported that in the first four months of 2021, the number of newly established businesses increased by 17.5 percent compared with the same period last year. Real estate was the sector with the highest number, with 2,727 businesses registered, an increase of 56.5 percent.

This year the shareholder meeting season witnessed a series of businesses announcing plans to jump into the real estate sector.

Thanh Cong Textile and Garment (TCM) is cooperating with a Vietnamese partner to speed up legal procedure compliance for the TC Tower project in Tan Phu District, HCMC.

A manager at TCM said the company expects to have revenue and profits from the real estate investment in 2-3 years.

Gilimex, a textile company, has also developed industrial real estate with IZ projects in Quang Ngai and Thua Thien-Hue. It wants to develop a land bank to develop a chain of hotels serving industrial zones (IZs) in key economic areas of Binh Duong, Dong Nai, Bac Ninh, Hai Phong and HCM City.

Most recently, Gelex, an electric equipment manufacturer, has made public its new strategy under which the company would divest from the logistics sector and head for industrial property.

Analysts said investors fear that the inflation rate will escalate as countries pump more money to recover the economies in the post-Covid-19 period. In this condition, it would be wise to invest in real estate, which helps preserve capital and serves as shelter for the time being.
 

Prior to that, Gelex announced a plan to develop hotels, commercial services and offices for lease in Hoan Kiem District, Hanoi.

Shareholders of Cholimex, which has advantages in import and export, have approved a plan to invest in industrial real estate. The company now has three projects in Vinh Loc IZ.

High risks

In principle, high profits are associated with high risks and stiff competition. A lot of investors have actually got ‘bogged down’ in the real estate market.

Mai Linh Group is an example. After conquering the taxi market, Mai Linh shifted to real estate, building a workshops and offices to serve transportation activities. But the projects failed. The group had to sell some projects to get money for debt payments.

President of Son Ha Group Le Vinh Son told the press that after he divested from real estate projects he had a ‘terrible’ lesson from the real estate investment.

After overcoming the dark period of his time, Son said: “I promised to shareholders that I won’t make investment in real estate for five years. The five-year period is going to end, but I believe that after five years, I will still decide not to invest in real estate."

Thuan Thao, a well known transport firm in the south, is another failure.

In 2009-2013, Thuan Thao had the highest number of large real estate projects in Phu Yen, including the 5-star Cendeluxe, an entertainment and ecological center, Thuan Thao Land conference and exhibition center, Resort & Spa Golden Beach, and Sao Mai Theatre with the total investment capital of trillions of dong.

But the projects are burdening the company. In mid-2019, Cendeluxe Hotel and Thuan Thao Conference and Exhibition Center were put into auction by Viet Tin Company at the starting price of VND500 billion, but the auction failed.

In Hanoi, the gold inlaid Habico Tower has become the bitter end of Hai Binh JSC, which was established as a petroleum equipment trading company and then jumped into the real estate sector. The tower is now a deserted 9-story concrete block.

Sohovietnam’s President Phan Xuan Can said real estate is no longer a super-profitable business field, so investors need to be cautious when pouring money into it.

The competition in the market is getting fierce and in order to compete with other developers, businesses need to have long-term vision and strong financial capability, while their products need to have good living space and reasonable costs to satisfy customers’ requirements. 

Tu Giang

Bank deposit interest rates up, as stock market, real estate investing risky

Bank deposit interest rates up, as stock market, real estate investing risky

Depositing money at banks is currently the safest and most profitable investment channel, as Covid-19 developments remain complicated and the stock market is "hot" and, thus, risky.  

PM wants to reform tax regime to prevent real estate speculation

PM wants to reform tax regime to prevent real estate speculation

Prime Minister Pham Minh Chinh has emphasized that the national housing strategy needs to include reasonable social housing development, and the tax regime on land speculators should be adjusted.

 
 

Other News

.
Newspapers and social media: cooperation or confrontation?
Newspapers and social media: cooperation or confrontation?
FEATUREicon  07/07/2021 

VietNamNet spoke with Nguyen Ngoc Chu, a respected mathematician, who is a well-known Facebooker whose posts on his page attract at least 1,000 likes each.

Is Vietnam’s Covid-19 treatment Favipiravir drug effective?
Is Vietnam’s Covid-19 treatment Favipiravir drug effective?
FEATUREicon  07/07/2021 

Vietnam has never included any antiviral drugs in its Covid-19 treatment regimen because of unclear and unproved effectiveness of the drugs in clinical trial results.

What’s behind the high GDP growth rate?
What’s behind the high GDP growth rate?
FEATUREicon  07/07/2021 

The high GDP growth rate of 5.64 percent reported for H1, when a number of large cities and provinces were under social distancing, businesses had to close, and people lost their livelihoods, has puzzled many people.

Strengthening tools to protect children in cyberspace
Strengthening tools to protect children in cyberspace
FEATUREicon  05/07/2021 

The strong development of the Internet and social networks has made children become digital citizens early, which brings many benefits in the service of learning, entertainment, and enhanced social interaction.

CPI rises slowly as people run out of money
CPI rises slowly as people run out of money
FEATUREicon  06/07/2021 

The reported CPI only reflects 60-70 percent of the real situation, according to the former Chair of the Hanoi Supermarket Association Vu Vinh Phu.

Minister of Home Affairs: state apparatus is too cumbersome
Minister of Home Affairs: state apparatus is too cumbersome
FEATUREicon  06/07/2021 

Minister of Home Affairs Pham Thi Thanh Tra says that the state apparatus is overly cumbersome with too many levels of hierarchy and an overlapping structure in ministries and ministerial-level agencies.

2022 World Cup qualifier: What is Vietnam striving for?
2022 World Cup qualifier: What is Vietnam striving for?
FEATUREicon  06/07/2021 

The Vietnamese team already knows exactly the opponents in the final qualifying round of the 2022 World Cup. How far does it want to go?

Vietnam railways corporation incurs big losses, thousands of workers take leave
Vietnam railways corporation incurs big losses, thousands of workers take leave
FEATUREicon  06/07/2021 

The Vietnam Railways Corporation (VNR) is experiencing its toughest days in history as many trains have stopped running during Covid-19. Many workers have had to take unpaid leave.

Fighting for $52 billion market, int’l groups flock to Vietnam
Fighting for $52 billion market, int’l groups flock to Vietnam
FEATUREicon  05/07/2021 

Despite the effects of the Covid-19 pandemic, the e-commerce industry still witnessed explosive growth in 2020.

Ministers of Home Affairs explain new circular on certificates for civil servants
Ministers of Home Affairs explain new circular on certificates for civil servants
FEATUREicon  05/07/2021 

The burden of certificates has been compared to “sub-licenses”, “a miserable and expensive journey”, and “buying certificates” by many National Assembly deputies.

Vietnam's Covid-19 vaccine strategy: speeding up vaccinations with 1 million doses per day
Vietnam's Covid-19 vaccine strategy: speeding up vaccinations with 1 million doses per day
FEATUREicon  05/07/2021 

Access to Covid-19 vaccine sources has been difficult due to a scarcity of supply in the world. What solutions will Vietnam need to buy enough Covid-19 vaccines for its people?

Vietnam's Covid-19 vaccine strategy: speeding up vaccinations with 1 million doses per day
Vietnam's Covid-19 vaccine strategy: speeding up vaccinations with 1 million doses per day
FEATUREicon  04/07/2021 

Access to Covid-19 vaccine sources has been difficult due to a scarcity of supply in the world. What solutions will Vietnam need to buy enough Covid-19 vaccines for its people?

'Confessions' of Tinder scammers
'Confessions' of Tinder scammers
FEATUREicon  04/07/2021 

No sooner had the appropriation of billions of Vietnamese dong been discovered than the fraudsters suddenly disclosed their swindles, which were quickly done thanks to the trust and affection they easily gained from the victims.

Vietnam welcomes third FDI wave
Vietnam welcomes third FDI wave
FEATUREicon  04/07/2021 

Vietnam is committed to developing its role in the production value chain through FDI and has been preparing for many years to improve the qualifications of its workers.

Victims of romance scams left desperate
Victims of romance scams left desperate
FEATUREicon  03/07/2021 

With nothing obtained and losses incurred, the victims of the dating app scam have been left in the depths of despair.

Youth prefer freelancing, working from anywhere
Youth prefer freelancing, working from anywhere
FEATUREicon  03/07/2021 

As technology is developing at a lightning speed, more and more young people want to give up their dedicated desks in offices and work from anywhere in the world.

Ben Tre tries to 'make impossible possible' by digitizing
Ben Tre tries to 'make impossible possible' by digitizing
FEATUREicon  06/07/2021 

When talking about how digital transformation should proceed in a poor country, Ben Tre provincial People’s Committee Tran Ngoc Tam had a practical view: transformation will succeed only if people understand it and get benefits from it.

Vietnam makes Covid-19 treatment drug, awaits trial results in other countries
Vietnam makes Covid-19 treatment drug, awaits trial results in other countries
FEATUREicon  02/07/2021 

Scientists need to study and master the technology and start a pilot small production process of a treatment drug for Covid-19 before organizing production on industrial scale, Phan Van Hieu, a respected pharmacist, said.

Betting online is easy
Betting online is easy
FEATUREicon  03/07/2021 

While legal football betting businesses remain "immovable", illegal betting sites have been bustling. Billions of dollars go abroad every year to football bets.

Home-sharing, shared-kitchens boom during pandemic
Home-sharing, shared-kitchens boom during pandemic
FEATUREicon  03/07/2021 

Booking a room on the phone, ordering food from an app and shopping online with smart lockers, people are increasingly using technology, changing the habits of consumers.

 
 
 
Leave your comment on an article

OR QUICK LOGIN