Property market yet to bottom out, insiders say

By Vu Le   November 29, 2022 | 02:17 am PT
Property market yet to bottom out, insiders say
Property buildings in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Investors are keen on knowing when the property market has reached its bottom, but industry insiders say the slide has just begun and further decline can be expected next year.

The secondary market in southern Vietnam has become vibrant in recent weeks with investors facing a financial crunch selling properties at 15-20% discounts. In fact, since last month, many property developers have been selling apartments and villas at 40-50% price reduction to buyers who pay in full.

At a property market forum last week, many investors at a forum asked if the market has reached its bottom.

Luong Dinh Thuy Van, CEO of investment consultancy Mogin Holdings, said it was difficult to say it has reached the bottom. Although many developers, sellers are claiming to sell at a loss, prices have not dropped by much.

The discounts only seem to indicate that sellers are cutting down on their profit margins at a time of cash crunch, Van said.

Investors should continue to observe the market and compare prices with that of other countries. She also advised against buyers making quick purchases just because someone advised them to.

Cash is king during this time, she said, adding that investors should only buy properties that are legally grounded and avoid unbuilt projects that carry risks.

Tran Khanh Quang, CEO of property developer Viet An Hoa, said that the selloff this year is only the beginning and more financial challenges can be expected in the coming years, especially for those who use loans to make investments.

"Further drops in prices are expected next year with prices half of what they are now."

Phan Cong Chanh, CEO of developer Phu Vinh Group, said that there are many uncertainties that can impact the property market next year, such as policy decisions of the U.S. Federal Reserve, changes in the land laws, tightened controls over credit and corporate bond issuance.

Investors should be prudent at this time, he said.

"There might not be solutions to these problems until mid-2023 and impacts of new policies might not be effective until the following six to 12 months."

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