Apartment prices increased dramatically because of creating cash flow?

Share at the discussion given by Construction Newspaper held on the afternoon of April 24, many experts and guests commented that apartment prices in Hanoi have increased dramatically recently and are attracting great attention from investors and people.

Mr. Nguyen Van Dinh – Chairman of the Vietnam Association of Real Estate Brokers (VARS) – said that the impacts of the macro economy and the Government’s management when promulgating new legal regulations have impacted active in the real estate market. From the end of the fourth quarter of 2023 until now, the market has had many improvements.

Specifically, price transactions have continued to grow by an average of 5%, products priced at 3 billion VND or less are sought after by many people. The products that people are most interested in are apartments and land; Prices and transaction levels in densely populated areas and industrial parks increased sharply by about 20%.

The residential real estate segment is also more bustling, housing transaction prices of about 3-5 billion VND receive a lot of attention, and many customers gather. The industrial real estate segment is also starting to bustle, but the resort real estate segment has not seen growth.

Notably, according to Mr. Dinh, recently, there were 8,000 apartments opened for sale nationwide, with 3,000 apartments for sale in Hanoi alone. The apartment index in Hanoi market increased sharply by about 48% compared to the first quarter of 2019, in Ho Chi Minh City increased by 21% compared to 2019.

According to Mr. Pham Thanh Hung (shark Hung) – Vice Chairman of the Board of Directors of Cen Group – the current real estate picture is seeing a sudden increase in prices, especially the apartment segment in Hanoi.

According to Mr. Hung, this adjustment is necessary when the real estate market has recently encountered many difficulties in supply, legality, market, and the breakdown of the financial system has made investors have cash surplus crisis.

Analyzing the above statement, Mr. Hung cited that according to the financial report of the first quarter of this year, the amount of money lying in commercial banks is about 18 million billion VND that cannot be disbursed.

People who are in dire need of money do not have collateral, but those who have collateral do not need to borrow money. Since then, commercial banks have had to lower interest rates to 5-6%, which is unprecedented in the history of recent years.

“When interest rates decrease, investing and exploiting real estate has created a positive cash flow. From there, real estate rental money can offset bank loan interest,” Mr. Hung emphasized.

Also according to Mr. Hung, in reality today, many people are willing to buy apartments to rent, then use the rental money to rent another villa in the same area to live. This fact shows that apartment real estate is currently generating a good cash flow.

“Currently, the market does not have many products that can replace apartments. There are products that have cash flow and value but are stuck with liquidity; or there are products that are fully legal but do not have cash flow value. Apartment price increases up to this point have been relatively balanced compared to supply and demand and there will certainly be adjustments, but if we talk about price reduction expectations, I think not,” Mr. Hung shared. more.

Sharing the same opinion as above, Dr. Tran Xuan Luong – Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute – said that the behavior of consumers and home buyers has changed. In the past, people were often afraid of apartments, for many reasons such as: Legality, red books or fire prevention issues… But now, consumer culture has also changed, because of convenience and location. Advantages of apartments.

“We need an apartment to live in, to do business, to create cash flow. For smart investors, it is easy to calculate that spending money on rent will create cash flow,” Mr. Luong analyzed. accumulate more.