Investors find it difficult to make profits in the short term
The operating trend of the real estate market is attracting attention as the price level remains high and investment cash flow continues to seek opportunities. Experts believe that the price and opportunity trends in the market in the coming time will have a clearer differentiation.
Dr. Nguyen Tri Hieu - Financial - Banking Expert - said that with a developing economy like Vietnam, real estate prices are very difficult to reduce.
According to him, although the Government and society both want housing prices to fall to make it easier for people to access, reality shows that it is unlikely to happen when land prices continuously increase, construction costs escalate and interest rates tend to increase slightly. He believes that interest rates will increase this year and this is one of the factors that will continue to push real estate prices up.
However, the current price level is already very high, making it more difficult to seek short-term profits. "At this time, making quick profits from real estate is not easy," Mr. Hieu stated his opinion. However, in the long term, the real estate market, especially the housing segment, still has room for growth because the supply does not meet the actual demand.
Assoc. Prof. Dr. Ngo Tri Long - Economic expert - also said that real estate is a safe money-holding channel thanks to the limited nature of land in the face of increasing demand. However, to succeed, investors need to look for real estate that is likened to "beauty queens", that is, assets with prime locations, transparent legal status, synchronous infrastructure in health, education and security.
According to him, these assets are not only highly liquid but also create sustainable cash flow, in contrast to risky and legally obscure real estate that often has very low growth margins.
Strong differentiation by administrative center and infrastructure
From a long-term perspective, Assoc. Prof. Dr. Tran Dinh Thien - Member of the Prime Minister's Economic Advisory Group - said that real estate is still a potential investment channel. However, after administrative unit mergers, the price level will show clear differentiation movements.
He analyzed that in some localities that were former capitals, prices may be adjusted down due to the decline in central role. Conversely, areas selected as new administrative centers, accompanied by strong investment in transport infrastructure and public services, will have significant room to increase prices.
According to him, real estate prices in the coming period will largely depend on location factors, development "coordinates" and infrastructure investment levels, instead of increasing simultaneously as in previous cycles.
Mr. Thien also emphasized that market potential is also strengthened by the process of upgrading urban development standards, towards green cities, smart cities and sustainable development. Investment activities should therefore be placed in a long-term vision, carefully considering fundamental factors such as planning, infrastructure, connectivity and urban development trends, instead of chasing short-term rumors or FOMO psychology in the face of temporary price "waves".
Mr. Thien said that the current market cannot be approached by general assessments or short-term "waves", but requires a strategic perspective. In the context of re-planning administrative units, especially province merger scenarios, real estate values will be very strongly differentiated.
Old administrative centers, if they no longer play the role of focal points, may face the risk of devaluation due to the flow of people and capital shifting. Conversely, localities selected as new administrative centers will become a convergence point for management apparatus, investment and trade activities, thereby activating urban infrastructure and real estate development.
He also clearly distinguished between long-term investment and short-term speculation. Long-term investment is associated with planning, infrastructure and real capital flows, while speculation based on short-term price increase expectations is easily eliminated when the market enters the screening phase. In the new development cycle, real estate is only truly sustainable and profitable when placed in the right "strategic coordinates" of geo-economic shift and urban driving force.
