HOUSING PRICE RISES DESPITE LOW-VOLUME TRANSACTIONS (PART 2)

HOUSING PRICE RISES DESPITE LOW-VOLUME TRANSACTIONS (PART 2) 28 August

There is a general perception that the home price is high because of manipulation. The future property price (due to current listed houses are not affected by these reasons) also come to grips with the accelerating pressure by a number of factors:

The land price on the market after the boom still remain exorbitant, therefore, the cost of compensation for site clearance could be high. In addition to that, the land pricing framework in many provinces have been increased by 15%, building materials and other construction expenses were up by roughly 50% (this expense group accounting for more than 50% input cost of real estate investment) which also affect housing price.

On another hand, the project approval procedure takes up a great deal of time, even longer than the past, because of law and regulation impediments, which raised the expenditure of funds and opportunity cost.

With the aim of stable Vietnem real estate market development, the law and regulation amendment should be hastened up to ameliorate the lack of market supply. Inflation control and restraining the rising price of input real estate elements are equally important. The last but not least mission is to curb the spread of COVID-19 pandemic as soon as possible and stimulate the economy recovery and development in other fields as long with real estate industry. As a consequence of that, the fundamental investments were steered to the right target, optimizing the national resource.

In the latest surveys, after the land boom earlier this year, in many provinces, landed property transactions were slowed down obviously. We barely see the scene of car after car parked in long line or the crowd thronged to visit open residential plots for sale. However, the land price is still showing no signs of decline, there is only a small drop about VND 1 – 2 million / sqm. Many real estate experts assumes that the land price soaring will fundamentally result in the need for the market to balance the real demand and supply, possibly form a new price level, allowing the development of spare space for the provinces. Furthermore, in the overareas it will undoubtedly take a lot of effort and time to adjust to balanced price.



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