Recently, real estate prices have continuously increased sharply, especially in the apartment segment in large cities. Reports from market research units show that the average price of primary apartments in Hanoi has exceeded 100 million VND/m2, putting great pressure on demand for living and investment.
In the context of limited supply to meet real needs, the question raised by many investors is: Which segment will be potential in the coming period?
According to economist - Dr. Dinh The Hien, after a period of super-profit growth, the real estate market will shift to sustainable development; the most suitable segment in the coming time is products based on affordability and exploitation efficiency.
The Vietnamese real estate market has recorded strong growth in three decades, thanks to three fundamental factors including legality, economy and infrastructure. Dr. Dinh The Hien commented that this process has created outstanding profits for investors, but is currently entering a new transformation phase.
He analyzed that the legal system has made a long way - from not recognizing people's right to own land and houses to perfecting and allowing enrichment from real estate, allowing an individual to own many houses. This is a factor that has completely "untied" the market.
In terms of economy, since its integration in 2006, Vietnam's GDP has grown strongly, reaching over 450 billion USD and is forecast to surpass Thailand in the next few years, creating great purchasing power and accumulating assets in society.
Along with that, the state has invested heavily in developing transport infrastructure, creating a direct driving force to increase real estate value.
Thanks to the above three factors, Dr. Hien believes that real estate investment channels have achieved an average profit of over 25% in 30 years, far exceeding the stock channel (about 10%) and depositing to banks (about 8%).
However, he commented that the principle of " quantity changes, quality changes" will be clearly demonstrated when the fundamental factors are almost at the limit. Legal aspects are almost complete; the economy, once approaching the scale of Thailand, will no longer accelerate as in the previous period; and traffic infrastructure will be almost complete by 2027, especially in the Southern region.
Accordingly, the real estate market will transform according to the model of developed countries, becoming a sustainable development investment channel, no longer a super-profit channel as before.
Regarding the orientation in the new period, Dr. Dinh The Hien believes that potential segments will be segments that combine two factors "income" and "exploitation".
First, buyers (for living or investing) will make decisions based on their actual income, in which a house is considered reasonable when the payment - including the loan - must be consistent with their financial capacity.
Second, the value of a real estate will be evaluated through exploitation efficiency. "Whether the asset value is 5 billion or 50 billion VND, the key factor is the profit from operation. A real estate is considered a good choice if it can generate a profit from exploitation (lease, operation) of about 3% to 3.5%/year on the total investment capital spent" - he said.
According to Dr. Hien, this will be the main orientation of the market in the coming period, when real estate prices - especially apartments - have increased significantly, while the supply to serve real housing needs is still limited.
