VN realty gears up for post-virus race

VIETNAMESE property firms are gearing up to tap opportunities from the post-pandemic recovery of the real estate market, which was predicted to soon get back on its feet.

The real estate market has been frozen since the beginning of this year due to the Covid-19 pandemic.

The Ministry of Construction’s statistics showed that about 80 per cent of real estate sale agents were closed or temporarily halted operations in the first quarter of this year while the remainder maintained operations at a modest level.

The number of new real estate firms founded in the quarter also dropped by 12 per cent while of those who temporar ily halted operation increased by 94 per cent.

Transactions also slumped in the quarter, equivalent to 40 per cent of the same period last year. Only 14 per cent of property products available in the market in the quarter were sold, the lowest level in the past four years.

However, industry insiders believed that the impacts would only be short term and the market would be robust in the next two years.

Nguyen Quoc Bao, deputy director of real estate firm Danh Khoi Group, said the real estate market was undergoing a purification process, pushed by the Covid-19 pandemic, to prepare for a new growth cycle.

This would be a difficult time for companies of weak capacity, but for those with strong financial capacity and professional operation, obstacles like the Covid-19 pandemic would only be short term. The pandemic even created opportunities, he said.

Danh Viet Group chairman Tran Le Thanh Hien said the difficulties of the real estate market were just temporary, adding that in the long term, the market had significant potential for development.

It was time for real estate companies to expand land banks, especially those with strong financial capacity.

Pham Lam, chairman of real estate services firm DKRA Vietnam JSC, said the market would see increasing competition in the post-pandemic period with the participation of diversified developers, from giants to start-ups, which would create a robust picture in 2020-2021.

Asian Holding Real Estate JSC director-general Nguyen Van Hau said real estate firms must improve resilience and flexibility to cope with market shocks.

Although there were difficulties, the market saw positive signs, Hau said. The State Bank of Vietnam’s move to cut rates would support the property market.

Su Ngoc Khuong, director of Savills Vietnam Co Ltd, the Vietnamese unit of the UKbased real estate services provider, said the pandemic had negative impacts not only on the real estate market but also on more than 50 relevant industries, including construction, building materials, labour and financial markets.

However, he said, Vietnam’s real estate market still had a number of advantages and was attractive to investors, given the population of nearly 100 million people, 55 per cent aged between 25 and 40 who had high housing demand and strong purchasing power, together with the country’s s t a bl e economic g rowth, improved transport infrastructure and rapid urbanisation.

The government’s efforts in has t e ni ng a dminis t ra t i v e reforms and speeding up disbursement of public investment were expected to create impetus for economic growth which would benefit the real estate market, said Khuong.