VietNamNet Bridge - The property market is worried about ‘land fever’ amid a shortage of available land.

*  The revenue from land tax and fees in HCMC decreased sharply by 16.8 percent compared with 2018, while the revenue from land use fees for project development dropped by 22.5 percent. According to the HCMC Real Estate Association (HoREA), the decline may continue in 2019.

*   The scale of the real estate market was smaller in 2018 and the problem may be carried forward to 2019. In 2017, 92 housing projects were under implementation which promised to provide 37,502 apartments and 5,489 houses. In 2018, only 77 projects with 28,316 products were expected to be launched into the market in the future, a sharp decrease of 34.1 percent compared with 2017.

*  The new supply is expected to be limited as a result of the HCMC Housing Development Program in 2016-2025, which prohibits the development of multi-story apartment projects in the central area of the city until 2020.

HoREA warned that the policy would not only lead to a short supply and decrease in revenue of real estate firms, but also to a reduction in the state’s revenue from the real estate market. This will affect sectors which have relations with the property market.

*  The supply doesn’t match demand. In 2018, the high-end housing sector accounted for 30 percent, the medium-class sector 45.3 percent, while popular products only accounted for 24.7 percent.

According to the HCMC Construction Department, high-end products are priced at over VND40 million per square meter. In the market, apartments priced at VND30-40 million are classified as high-end.

The real supply of high-end products could be 30 percent higher than reported by the construction department. Meanwhile, analysts have warned about the oversupply of high-end apartments and the shortage of more affordable apartments.

*   The number of secondary investors is unstable. Market analysis firms report that 61 percent of purchases in the high-end market segment are for investment purposes, 13 percent for short-term investments and only 26 percent for accommodation in 2018.

As such, there were more secondary investors in 2018 than in 2017, when investors only accounted for 50 percent. 

*   Inventory products of 65 listed real estate firms have very high value of VND201.921 trillion.

*   Analysts warned that land fever with fake demand, pushing the market prices up, may occur in 2019. Some speculators and brokers may join forces to release unreliable information about the city development program, which could lead to a sharp rise in prices in some areas of the city.

US$1=VND22,000

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