Under the influence of inflation risk, not only the price of land increases, but also apartment buildings. Meanwhile, the income of the majority of business people and workers not only did not increase, but also decreased during the recent epidemic.

Questioning the consequences of the real estate market in the context of continuously increasing prices in most segments, Mr. Le Quoc Kien, a consultant, veteran investor in the real estate market expressed his opinion, the price Rising real estate discourages production business people. They will tend to instead focus on investing in production and business – the segment that has encountered many difficulties in the past 3 years, spending quite a bit of business capital to invest in real estate. Rising real estate prices also create a fear of missing out among wage earners in other industries. They will tend to quit their jobs, or neglect their jobs, to focus their time and minds on real estate.

This position is divided into 3 types of real estate to see the consequences of continuously increasing real estate prices.

For real estate to meet real demand:  Under the influence of inflation risk, prices of all segments tend to increase. Meanwhile, the income of the majority of business people and workers not only did not increase, but also decreased during the recent epidemic. Therefore, it is increasingly difficult for people with real housing needs to buy a house.

Due to the real demand for housing, the bank still supports loans for this real estate segment, but with a conservative valuation, 15% – 20% lower than the market price. For example, almost a year ago, the central townhouse’s re-valuation increased by no more than 5%, while the actual transaction market increased by 15%. In addition, they also have tighter control over the borrower’s repayment income, and add an extra provision in addition to the debt payment and living expenses.

As for real estate with “weak legality”: According to Mr. Kien, resort and tourism real estate itself is already “weak” because of legal and scandals about commitment to rental profits, and is now “weaker” due to the image severely affected by the epidemic and high construction costs. In particular, with the latest information on the inspection of corporate mobilization bonds, the Bank’s credit tightening for this type of real estate will greatly increase the risk of difficult projects. can reach the finish line.

For real estate that is more speculative than real use:  The price of land in the suburbs and provinces has increased more than townhouses in the center, but on the contrary, it is not much, not exploited. Except for some times and some areas with sudden waves, the liquidity of this segment is slower than many real estate groups towards real demand, especially F1, F2 investors – the buyers. scattered from large pieces of land to be subdivided.

Mr. Kien analyzed, many people think that the high real estate prices in the province will benefit the original locals. The fact is only partially true, they only get 10%-15% of the bullish chain. For example, when real estate prices increase from 2 billion to 7 billion in 2 years, in fact, local people can only sell for 2.5 billion (accounting for 500 million / 5 billion share of price increase). The gap from 2.5 billion to 7 billion is caused by investors buying and selling each other over 3-4 turns, or the difference between the “original land price of large pieces” of local people and the “cost of land”. piece products” are sub-lotted.

For example, the divisional person buys from the local people 2.5 billion/ha, after legalizing the infrastructure (may lose more land for infrastructure and utilities), plus the cost of goods sold, the cost of capital increased to 4 billion/ha. At this time, they sold the retail price of the small land that was allocated 600-700 million VND/1000m2, the revenue reached 6-7 billion VND/ha. The revenue of 6-7 billion from “Total small pieces of finished land” does not mean that the “original land price of large pieces” of local people has also increased to 6-7 billion, which brokers often advertise. for the buyer is x3 x3.5 for 1-2 years.

Mr. Kien said that a farmer all his life only knows how to work hard, and suddenly a lump of money falls into his head, which will easily lead to many bad habits for himself and his children. And they themselves, after selling the land for a while and having spent a good amount of money (Building houses, shopping, enjoying), not knowing what to do other jobs to earn money, they look to buy another piece of land to cultivate. income earning. At this time, a piece of land with the same quality as the sold piece (location, area), the price will also double and triple, it is mandatory to go to further areas or accept to buy land with a smaller area than the one sold. with the original.

Sharing earlier, Mr. Nguyen Van Dinh, Chairman of the Vietnam Brokerage Association also pointed out the consequences from the virtual increase in land prices. The recent rise in real estate prices has made people’s ability to buy houses more and more difficult, in the long run will create many consequences and disparities between rich and poor. Besides, the increase in land prices not in accordance with the real value is leading to the risk of depression for the economy and will affect the policy of low-cost housing development.

The fact that the technical infrastructure, transport and urban systems are invested and developed rapidly, increasing the value of land, which is the principle of the market. However, the current increase in land prices is not compatible with the increase in investment. That is, the value of real estate will be proportional to the investment, but in the case of investment 1, the price increase 3-4 times is unreasonable. The sharp increase in real estate prices in a short period of time is not true to its true value and there is a potential for bubbles. “The current capital flows into real estate are still mainly short-term financial investments for profit, “surfing” investment”, Mr. Dinh emphasized.

With the increase in land prices, most workers and middle-income people cannot buy houses.

High house prices lead to a sharp increase in the cost of premises, leading to an increase in consumer products, catering and services, exceeding the ability of consumers to pay.

Along with that, the increase in real estate prices too high compared to income and labor productivity in Vietnam will reduce the attractiveness for foreign investors, the biggest consequence is that investors will quietly withdraw from the Vietnamese market. Male.

The increase in real estate prices leads to the cost of materials, the cost of site clearance increases, the infrastructure is difficult to invest, leading to the urban ground is sloppy and degraded, unable to meet the needs of society. .

In addition, rising real estate prices also affect the money market. The real estate market and the currency have a circulation relationship with each other, so all the money flows into the real estate market can be dangerous for the monetary system, leading to inflation.

In order to limit risks to the economy in general and the real estate market in particular, economic experts all say that investors need to be cautious and consider arranging reasonable capital sources, limiting the amount of money pouring into real estate. , allocate reasonable capital for other business and production fields

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