After a period of hot growth and prolonged fluctuations, the real estate market is witnessing a significant change in investors' approaches.
Mr. Ngo Thanh Huan - CEO of FIDT - said that in the period 2013-2018, investors mainly look for areas preparing for planning, opening roads or expecting price increases to welcome the wave. At that time, many people almost do not care whether that area has industrial parks, jobs, residents or the ability to create cash flow, because as soon as planning or infrastructure information appears, land prices may increase sharply after a few years.
However, according to Mr. Huan, the current picture is different. Many suburban areas or areas lacking development momentum have not yet recovered as in previous cycles. Therefore, buyers are starting to pay more attention to real estate's real potential through criteria such as rental capacity, number of people in need of access, transferability and future buyers.
Mr. Huan said that after many fluctuations, investors are becoming more cautious in their investment decisions. Along with that, the new legal system, especially land regulations, also makes investors better understand the "rules of the game" and change their market approach.
In addition to legal factors, FIDT CEO said that the growth momentum of the Vietnamese economy has also changed significantly. If previously growth was mainly based on capital and cheap labor, now labor costs, production costs and real estate prices have all increased, making the old growth model no longer as effective as before.
Another factor emphasized by Mr. Huan is that the level of market transparency has been significantly improved thanks to the development of technology and data platforms. Investors can now easily access information about selling prices, transaction history, price increases and market levels in each region, making it increasingly difficult for crowd-driven investment to be effective.
Agreeing with this view, Dr. Dinh The Hien - Economic expert, Director of the Institute of Informatics & Applied Economics Research said that speculation will not disappear, but the nature of this activity has changed. If previously speculators only looked for a few months or a year, now they also have to calculate in a longer cycle, from 2-3 years and evaluate assets in the way of a real investor.
According to Dr. Dinh The Hien, speculators are now also more professional. They no longer speculate based on rumors or small capital amounts as before, but often own larger financial resources, accept holding for 2-3 years and choose branded areas with clear planning.
He believes that the differentiation of the market, the cautious psychology of investors as well as the current recovery process all reflect a larger trend, which is that real estate is entering a mature stage.
According to Dr. Dinh The Hien, when the economy moves from a stage of growth based on cheap labor to industry and urbanization at a higher level, real estate value will no longer be decided mainly by speculative expectations but by the ability to use, exploit and create real value.
Whether it is a buyer to live in, invest or speculate, the final selection criteria are all converging on a common point: real estate must have the ability to form a real living space, have residents, have jobs, have services and have long-term exploitation capacity. According to Dr. Dinh The Hien, this will be the foundation that determines the value and growth potential of assets in the new market cycle.
