Why now is a great time for individual investors in real estate?

>> Government calls for broad-based measures to help realty sector

At the recent "Uong Bi—Quang Ninh—Investment Bright Spot 2023" seminar under the direction of VARS, experts stated that the government has helped remove bottlenecks and the real estate market is showing a gradual warming signal.

Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association (VNREA) and Chairman of the Vietnam Association of Realtors (VARS), shared that the first quarter of 2023 shows positive signs in the real estate market thanks to the government's support and removal of difficulties. For example, the government established a working group to review the difficulties of enterprises and localities with stuck projects (according to Decision 1435/QD-TTg). Official Dispatch 1164/CD-TTg was also issued to urge relevant units to comply with Decision 1435/QD-TTg, which mentioned that real estate businesses need to do their own research, review products, and suit the market's needs.

According to experts, the real estate market is revealing a bottom when policies are issued, interest rates cool down, cash flow starts to come back in, and investors focus on investment segments that meet real needs, are fully legal, and can be exploited immediately. However, the market still has many doubts, and the current cash flow has not mainly returned to the real estate industry. Nevertheless, for long-term investors, this is the time to put money down when they see the recovery cycle of the market starting.

Mr. Hoang Trong Phu, an experienced investor from District 3, Ho Chi Minh City, has experienced many ups and downs of the real estate market. However, the level of profit that this investment channel brings still satisfies him more than other investment channels. This year, instead of hunting for land, Mr. Phu turned to hunting for well-planned projects based on suitable types aimed at real-life and business tenants. Although some people might think it is unwise to put money down at this time, Mr. Phu is not investing for a short-term gain but is looking forward to the next 3–5 years. Furthermore, Mr. Phu is not dependent on loans because he has accumulated years worth of capital, so he is not under pressure to turn cash flow.

>> Ensuring the stable development of the real estate market

Like Mr. Phu, many investors are also starting to hunt for goods when they see the government, ministries, and sectors deploying difficult solutions for the real estate market simultaneously. In particular, the State Bank of Vietnam recently directed commercial banks to lend and disburse quickly with the right focus and target audience for businesses and real estate projects that are eligible under regulations, along with extending credit to homebuyers with suitable interest rates.

Many industries, including the real estate industry, are currently facing economic challenges. However, the primary obstacle hindering the market is the psychological barrier; most potential buyers are waiting for a significant drop in real estate prices before making a purchase.

Experts recognize that determining the market's top and bottom is a subjective assessment. Each type of real estate has certain potentials and advantages that depend on various factors, such as time and policies. Therefore, once buyers have accumulated sufficient financial resources and found a suitable property, they should not hesitate to make a purchase. They should buy as soon as they see an adjustment in the market.

Nguyen Xuan Loc, the general director of Techcom Vietnam Real Estate Company, believes that, except for cases of financial difficulty, this is the best time for people with real housing needs and stable capital flows to invest.

He points out that during the crisis period from 2008 to 2012, land prices continued to rise. Although the market currently faces many difficulties, real estate prices have only decreased by 10–25%, much lower than many people's expectations of a 30–40% drop.

He further explains that real estate is a finite resource, and regardless of the stage or situation, it remains a high-cash-flow investment channel. The opportunity for price appreciation is always guaranteed. Therefore, buyers should pay close attention to choosing the right product with clear legality and carefully study the reputation and capacity of the investor.