Vietnam's real estate market this year is slowing down to the lowest level in many years, both in terms of supply and transactions. However, the real estate market is still considered to have a lot of potential in 2021 and real estate investment is still a notable investment channel alongside others.

Residential real estate will still be a highly liquid segment in the future. 

The real estate market will have many pushes

In a post-Covid-19 context, investment channels such as real estate, securities, gold and bank deposits have advantages and profitability factors depending on the knowledge of the investor and level of risk. According to economist TS. Can Van Luc, if investors want to be safe, they should save money and if they invest in real estate and securities with higher risks, they will gain also higher profits in the condition of good market recovery.

"Currently there are very few real estate brokers participating in the industrial real estate brokerage market, this playground is mostly owned by foreign enterprises such as Savills, CBRE".

Pham Ngoc Tung, Deputy General Director of IMG

At the same time, in 2021, many projects to amend the law will be completed and problems in legal policies inhibiting the development of some products and some segments in the real estate market will be removed to help open the market flow, business activities and project development. Bui Van Doanh also emphasised that capital flows would be expected to continue pouring into the real estate market through many different channels. Notably, recently deposit and lending rates continue to decline, showing commercial banks are facing difficulties because there are no borrowers. When interest rates drop sharply, banks will inevitably choose a lending channel for real estate because this investment channel can still make certain profits. These factors will be effective leverage for the real estate market in 2021.After a quiet year, the real estate market is expecting a "push" to flourish again and become bustling in 2021. According to Bui Van Doanh, Director of the Institute of Real Estate Research, besides there are many obstacles, many factors can become the driving force for the real estate market in the current context. First of all, the land fund for enterprises and investors is still abundant. It is seen that the companies “standing" in the current period are all companies owning a huge land fund, such as Vingroup, CEO Group, Van Phu - Invest andNovaland.Besides, new urban areas have still a lot of room for development, such as Thai Nguyen, Lao Cai, QuyNhon, NinhThuan, BinhThuan, Quang Nam and QuangNgai. Many developers such as Capital House and FLC have been aiming to exploit the potential of these areas.

Regarding investment in real estate, in addition to direct investment in real estate products, another indirect investment direction is buying bonds of real estate firmsand shares of real estate enterprises. Can Van Luc said that in terms of economics - investment, risks are high, so profits are high and vice versa for these investments. In this case, direct investment (buying real estate products) is more risky and it will also be more profitable. If ranked from low to high risk, it would be: bonds, stocks, buying real estate products, however, this depends on real estate segment because the residential real estate segment is less risky than other segments.

Residential real estate will have good liquidity

Given the current market has deep compression, there would be a great resilience when recovering, the speed of recovery would be strong, according to Tran Thi Thu Hien, Director of DTJ Investment and Distribution Company, the real estate market would have a huge opportunity later this year and in 2021. The representative of DTJ also said that residential real estate would have good liquidity in the current context. “Regarding the segments that will attract cash flow from real estate investors, I think investors will be the screeners for their own investment products. In the current economic difficult situation, products for shelter with reasonable prices will have good liquidity. Investing in a high-end apartment will be more difficult, unless the product has a new breakthrough. For resort real estate, investment products of great value, the decisions of investors will be slower, the product which must be differentiated, necessary and existing in the market have liquidity. But it's not easy,” saidHien.

Regarding other factors affecting investors' decisions to give money, Hienemphasised that at the present time, it was the reputation of the investor andthe quality of the product.

In another angle, Nguyen ThoTuyen, Chairman of BHS Group, said that in the future, investment demand would not be in hot investment areas as in the past period.The participation of primary investors together with professional investors, land plots and apartments still have transactions. However, the current investment method of investors is to focus on safety and keeping assets. “With the method of “growing sweet potatoes in strange fields, sowing rice seeds in familiar fields", but will not invest in sweet potatoes, they will invest inriceseeds with the aim of safety first. They will choose places with good growth, synchronous infrastructure, convenient transportation. In which, QuangNinh, HaiPhong, Binh Duong, Dong Nai and Vung Tau are notable markets,” said Nguyen ThoTuyen.

Regarding the potential of industrial real estate, this is a"hot" segment on the market, now with the price of 125 USD per m2 for 40 years of industrial land lease, the average investor pays only 6,000 VND per m2 each month with full infrastructure and utilities, Pham Ngoc Tung, Deputy General Director of IMG emphasised "this is a very cheap number".At the same time, he suggested that, instead of investing in housing or resort real estate which depended tourists, current investors could invest in industrial real estate."A lot of enterprises in the South are investing to buy land to build factories for lease, or to buy land in industrial zones and then build factories forFDI enterprises,”said Tung.