To this company, remainders of real estate to reduce prcice is not much because price will continue reducing make investors sell it under cost price. Example is apartment at C level, with land cost and construction fee at around 2-3 millions/m2 and 5,5 – 6,5 millions VND/m2 , sale price to ensure gross profit at 20% will be at 12-145 millions VND/m2 , familiar with sale price on the market now.
Reducing price pressure likely come from Real Estate Company which meet financial difficulties to be force to liquidate project with low price. However, at the opposite direction, rebuying those projects of other investors will help reduce reducing price pressure , before products are put to the customer
According to Savills, in the first 3 quarters of 2013, number of apartments transaction has increased over the same period, especially Apartment at C level (price < 15 millions VND/m2.
“In more premium segment, we believe in that reducing price likely will follow form of repositioning products (more comfortable, construction quality, square smaller, …) more than just reducing price”, the report of Viet Capital Securities issued.
According to report of Viet Capital Securities, Real Estate can will be a good invest channel at currently because of low interest rate (7-8%), gold and foreign exchange markets are less attraction due to the policy of Government in controlling free market. So, the investors can be attracted by Real Estate because of high profit rate (5-8%) and ability of value conservation before inflation.
Researching market of Viet Capital Securities issued that attracting profit rate of leasing real estate (7-8%, familiar with bank interest rate) can be found in low segment has good quality such as E-Home 3 (apartment, Nam Long Joint Stock Company) or Hoang Anh Golden House (Apartment, Hoang Anh Gia Lai Group). Premium project in 2 District such as Vista (apartment, CapitaLand) or Estella (apartment, Keppel Land) also give a good profit rate around 4-5%.
Adequate Profit Rate along with ability of value conservation under inflation and potential increasing price will attract investors come back to Real Estate Market, help stabilizing house price. Meanwhile , the banks are now lending to individuals rather than enterprises. This is a positive point for balance of supply and demand in real estate.
Report of Construction Ministry issued Real Estate Inventory continued to fail on the past time.
Report of Viet Capital Securities also says that Government’s policies supporting reinstating of real estate. If the proposals of loosening clause of owning real estate for foreigners in Viet Nam are approved then foreigners will buy and sell Real Estate easily. Demand of foreigners is high or not need more time to verify, but at least this will reduce legal problems, and it is a positive point.
Beside, Government approved raising the ceiling overspending from 4,8% up to 5,3% GPD in 2014. This increase use to expend investment infrastructure, which from it, real estate will get profit due to connect infrastructure better. Government foresee increasing invest rate/GDP up to 32% and spend around 170.000 billions VND for public investment in 2014.
Government Decree 11/2013/ND-CP allow investors sell ground base without basic construction. Viet Capital Securities forecast the circular to steer and guide applying this decree will promulgate in the next time (around the next 3 months). This help investor in Real Estate curtailing time handover, as much as reducing financial liability due to basic constructions.