Vietnamese remain keen on real estate despite slump

By Vu Le   May 1, 2023 | 03:07 pm PT
Vietnamese remain keen on real estate despite slump
Office buildings and apartment blocks in Ho Chi Minh City’s eastern area. Photo by VnExpress/Quynh Tran
A recent survey has found people want to buy land and houses even though the property market is frozen.

The survey of 1,000 people done by property buy and sell website Batdongsan at the beginning of this year found 87% of those already owning three or more properties, 79% owning two and 66% of owning one want to buy more next year.

And 46% of those who do not own a house or land said they want to buy real estate. Some 60% of respondents said they want to buy real estate next year as an investment.

Dinh Minh Tuan, regional director for the south of website Batdongsan, said people in other countries in the region like Singapore, Thailand, Malaysia, and Indonesia buy real estate mainly for occupation and not investment.

But in Vietnam, a survey by real estate trading company Viet An Hoa found local people tend to regard real estate as a measure of their life’s achievement and as assets. At the age of 30, they often make great efforts to buy their first house.

When they have abundant financial resources, at 35 or older, they are motivated to buy a second property.

By the time they are 40, the emerging rich prefer to own three or more properties, and this increases to four or five at 50.

Huynh Phuoc Nghia, a senior consultant at business consultancy GIBC, claimed real estate investment has developed into an obsessive house-owning syndrome.

There are three common reasons for investing in real estate, he said.

The first is purely financial and is meant to make money based on quickly getting in and out, and so buyers tend to use leverage, he said.

This group accounts for 60-70% of the market.

The second is investment to achieve long-term cash flows, and these buyers are not interested in selling out, Nghia said.

The third is buying property to use as collateral, flaunt it or use as leverage to achieve large financial goals, he added. This group often consists of institutional investors.

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