Some experts continue to be sceptical about the possibility of the real estate market entering a calm period and freezing liquidity at this moment.

As a player in the sector for more than two decades, I and many other business leaders don’t expect a dim outlook for the real estate market at this time. In terms of the macroeconomic factors, Vietnam still posts a good GDP growth, increased public investment disbursement while maintaining inflation at an acceptable level. When there is a huge demand for housing, why people are so pessimistic about the scenario of the market?

From the perspective of business leaders, I have to agree with this point of view. If I disagree and dream too much about the prospect that the market will still be good, I will lose liquidity and have no money to pay my staff, who are working day and night to seek customers to get 2-3 per cent commission for each transaction.

I also play a role as a market analyst who has made contributions and shared ideas to improve the real estate market. From the perspective of market analyst, I feel sad about the things I want to do, but which don’t happen. When the market grows too drastically, it leads to unsustainable development.

Data from market research companies show that there is a widespread decline in liquidity across all segments due to the exponentially rising housing prices, which are out of control. Meanwhile, homebuyers with genuine demand tend to delay the purchase due to uncertainty. It is worth noting that many people expect that housing prices will reach the bottom level amid the volatility.

This has caused many troubles for real estate brokers, whose income mainly from the 2-3 per cent commission fees depending on the price of each apartment and land plot. The shrinking housing prices mean reduced income for the brokers.

Meanwhile, the marketing and sales expenses remain the same. With a low and slow liquidity, investors have to give priority the development costs so that it is easy to delay the payment of commissions to sales agencies.

The outbreak of the pandemic dampened the outlook for real estate brokers. However, when it was contained at the end of last year with widespread vaccination, brokers expected a new cycle for the real estate market. However, the credit tightening policy and the problems in the corporate bond market have once again frustrated brokerage businesses when investors turned their back to the market.

It is a challenge for us all. The real estate crisis in the 2009-2011 period seems to be back again with many uncertain factors, although the current market context is far different from the previous period.

The market uncertainty has affected the transactions across a wide range of assets, including land-based property, luxury and ultra-luxury apartments although the majority of buyers in the segments can afford them.

Meanwhile, the lucrative hospitality segment has witnessed the strong recovery post-pandemic, but the market has been subdued.

Real estate developers are suffering tremendous pressure to control the cash flow for this capital and expense-intensive segment. For instance, steel prices have been increased by 46 per cent on-year, which results in an average increase of 7 per cent for the project development expenses. The pressure also comes from the increase in land development costs and bank loan interests.

Source: VIR.