Lowest interest rate in 10 years, boosting real estate demand

Analyst Chu Duc Toan assessed that infrastructure development has a direct impact on the real estate market, becoming the main growth engine for this market.

Home loan interest rates at domestic banks are relatively stable at 9.2-9.5%, the lowest level in 10 years. VNDIRECT expects the State Bank (SBV) to maintain an accommodative monetary policy in 2021 as inflation remains under control. “Although we do not expect the SBV to cut further operating interest rates, we believe that the SBV will not raise interest rates in 2021 in order to continue supporting the economy by maintaining monetary policy easing.” VNDIRECT experts evaluate. Accordingly, VNDIRECT believes that mortgage interest rates will remain low in 2021, thereby supporting real estate demand.

A big impetus for the real estate market comes from the fact that the Government is taking more drastic actions to promote public investment in the second half of 2021, especially investment in infrastructure development to boost the economy. recuperate. On July 9, 2021, the Ministry of Construction issued Directive 01/CT-BXD on speeding up the implementation and disbursement of the 2021 public investment capital plan. Accordingly, the disbursement of public investment capital was directed to complete 100% of the target in 2021. VNDIRECT believes that the promotion of infrastructure development has a direct impact on the real estate market, becoming the main growth driver in the coming years.

Some projects that have a positive impact on the real estate market have/are expected to start construction in 2021 such as Long Thanh International Airport phase 1 (starting in early 2021); 6/11 North-South expressway component projects are under construction and the remaining 5 projects are expected to start construction in 2021. In addition, there are also some notable projects expected to be completed in the second half. 2021 and 2022 such as Nhon metro line - Hanoi station; Thu Thiem Bridge 2 and Metro Line 1 (Ben Thanh - Suoi Tien).

In addition, VNDIRECT sees several upcoming planning approvals that will also support infrastructure development and land prices. In particular, the proposal to establish the Northwest city including Cu Chi and Hoc Mon, along with the information about moving the districts of Hoc Mon, Cu Chi, Binh Chanh, Nha Be and Can Gio to the district has boosted housing prices in the districts. this area increased sharply in the first half of 2021.

Southern housing market: expectations of warming from 2022

After a number of new regulations are issued in 2020 such as Decree 148 and the revised Construction Law 2020, VNDIRECT experts expect, the supply of new apartments in Ho Chi Minh City. Ho Chi Minh City may recover from 2022, specifically increasing by 26.2% year-on-year in 2022 and 55.7% year-on-year in 2023. The mid-end segment will contribute 30-50% to the total supply. The housing market in the suburbs of Ho Chi Minh City such as Can Gio, Nha Be, Binh Chanh and Thu Duc is forecast to continue to be remarkable in the second half of 2021 and 2022 thanks to infrastructure development projects.

VNDIRECT believes that primary housing prices will hardly fall in the second half of 2021 and 2022, due to the high cost of project development including compensation and financial costs in the context that the project lasts for several years. and the cost of construction materials is increasing sharply. It is expected that the investors will continue to come up with better handover policies, support to prolong the payment schedule to stimulate demand instead of reducing the primary selling price.

Land prices in the vicinity of Ho Chi Minh City are forecast to continue to increase impressively in the second half of 2021, thanks to the expansion of highways to the western and coastal areas with ongoing infrastructure projects such as the Ben Expressway. Luc - Long Thanh, Dau Giay - Phan Thiet, Long Thanh international airport phase 1. In addition, it is proposed to establish a Northwest city including Cu Chi and Hoc Mon, in parallel with the relocation of Hoc Mon and Cu districts. Chi, Binh Chanh, Nha Be and Can Gio will continue to promote land prices in these areas to increase rapidly in the coming time.

Forecast of housing supply and prices in Hanoi

The supply of new apartments in Hanoi is forecasted to increase 40% year-on-year to about 25,000 units in 2021, thanks to stable contributions from Vinhomes' mega projects, followed by Sunshine Empire (2,200 units) and Gamuda City (2,000 units). As for the townhouse market, VNDIRECT believes that the neighboring provinces of Hanoi such as Hung Yen will be the bright spot of the market in 2021-2022. Vinhomes also plans to open for sale a 460ha urban area in Hung Yen in the second half of 2021.

The supply of new apartments in Hanoi is forecasted to increase 40% year-on-year to about 25,000 units in 2021

In the first months of 2021, Hanoi land price increased by an average of 14.5% over the same period, even in some places there was a sudden increase such as Dong Anh (up 75.5% over the same period). Tri (up 25.6% over the same period). However, housing prices in Hanoi showed signs of slowing down in the second quarter of 2021, averaging a slight increase of 2.5% over the same period. VNDIRECT believes that, in the second half of 2021, housing prices in Hanoi will continue to slow down thanks to tight management agencies in land fever areas. However, primary apartment prices in Hanoi will maintain a healthy growth momentum of around 4-6% y/y in the second half of 2021 and 2022. Hung Yen is one of the notable emerging areas in Northern real estate market, along with Bac Ninh and Quang Ninh. According to CBRE, land prices in Hung Yen increased 12% over the same period in 2020, higher than the average increase of 7.6% over the same period in Hanoi.

Hong Linh

According to Kinhtevadubao.vn