How will the real estate market perform in 2017?

20-Dec-2016 Intellasia | VNN | 6:00 AM Print This Post

While some experts believe the real estate market will be active in 2017, others think the market will cool down and encounter difficulties.

Tran Kim Chung, deputy head of the Central Institute of Economic Management (CIEM), said he can see three factors which can serve as an impetus for real estate market development in 2017.

First, stable economic development. Economists predicted that the national economy will perform better than in 2015 and 2016 with a higher growth rate and better exports.

Second, the indexes related to the real estate market are good. Bad debts have been settled and banks have increased lending to real estate projects, while idle capital in the public is flowing to the real estate market.

Third, the State has applied many policies to organise a transparent market.

“The transparent state management will help businesses and investors feel secure,” Chung said.

Tran Ngoc Quang, secretary general of the Vietnam Real Estate Association (VnREA), also thinks the high economic development, the deeper global integration will bring benefits to all the business fields in the national economy, including the real estate sector. The development would lead to higher demand for infrastructure, houses, urban areas and industrial zones. cited a report from JLL, a real estate service provider, as showing that international investors see great opportunities in the Pacific Rim real estate market and that capital flow to the market is on the rise.

The merger & acquisition (M&A) market is very busy in 2016 and the tendency is expected to continue in 2017. The most noteworthy transaction this year includes the ones in which CapitalLand Vietnam Holdings spent $52 million to take over the project located in the 0.5 hectare ‘golden land’ area in Cau Kho ward of district 1 in HCM City. VinaCapital spent $13.8 million to take over the International centre Building in Hanoi.

In July 2016, The Manor Central Park in Hanoi was transferred by Vietnam’s Bitexco Group to Mitsubishi. The value of the deal remains a secret.

Meanwhile, Dinh The Hien, a respected economist, in a report on Vietnam economy prospects in 2017, said that the real estate market would cool down in 2017.

He said though the real estate market would still be a popular investment channel, its scale would narrow because of decreased speculation and bank loans.

Hien analysed the figures from official reports to show that the real estate market in 2014-2016 grew more rapidly than the national economy, with a very high number of projects marketed, which went beyond the consumption capacity. This will create an oversupply.


Category: Business

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