How Covid-19 Affects Vietnam Property Market?
How are you? Still safe when the Covid-19 is active?
When the world is suffering from many downturns of stock, currency, gold and also cryptocurrency, will Covid-19 pass the property market?
Liverpool manager Juergen Klopp bristled at questions about the coronavirus on Tuesday (March 3) night after his side crashed out of the FA Cup, saying his opinion on the topic does not matter as he was merely someone with a “baseball cap and a bad shave.”
Of course, we are not going to have the same mistake when “putting the question not to the specialist”:
Mr. Duong Duc Hien, Sales Director of MIKGroup, thinks about the impact of Covid-19 on real estate:
“Covid-19 gives an opportunity to buy real estate at a more affordable price.”
The above comment was made by Mr. Duong Duc Hien, Sales Director of MIKGroup when commenting on the impact of the Covid-19 epidemic on the real estate market as well as prospects in the near future. Mr. Hien was known as a prestigious real estate expert as Director of Housing Sales of Savills before joining MIKGroup.
Hien said the Covid-19 epidemic has been affecting both macroeconomics and microeconomics
So real estate has been affected?
The answer is yes, cannot say it is not affected. In particular, tourism is one of the most affected industries today, leading to serious impacts on related industries such as aviation, hotels, catering, retail and commercial… However, the market and the economy have cycles: up, calm and down, depending on the reality of the market.
In the past 5 years, the real estate market has developed quite well, but now it is moving calm, plus the outbreak of the disease has also reduced the wave of foreign investors entering Vietnam.
However, according to Mr. Hien in a certain aspect, this is an opportunity for people with real needs. Because, investing in this period will have more good options, less competitive and likely to receive good incentives from project developers. Those who have real needs also have the opportunity to buy real estate at reasonable prices and are not afraid of being influenced by speculators or quick-flipping investors.
Do you think that the Covid-19 epidemic will weaken domestic real estate businesses?
It can be said that this is almost a test step for businesses, especially enterprises with limited land bank, or businesses with no financial strength and depended on short-term revenue. For MIKGroup, we have prepared a contingency plan and adjusted our business strategy accordingly. This is the time when we focus more on product, service development, research and learn more about the market and customer needs.
How long does the negative impact of the epidemic on the real estate market?
With many years of experience as a real estate expert, I think that the disease affects the commercial service immediately. As for real estate, everyone has real need of owning a property will have an indirect influence. However, the evaluation of the consequences of the disease on the real estate market depends heavily on the disease prevention of the whole country. The longer the epidemic lasts, the greater the consequences.
Do you have any advice for individual investors in this context?
In my opinion, this is an opportunity for developers that have projects because according to the statistic in 2020, there is not too much supply. The market will surely receive products with much more time to prepare than before. However, investors need to pay attention to the factors: developer reputation, design, services, construction quality and operational management…
Recently, the real estate market has been quite volatile. In essence, the experts and consultants all can see the problem, because it is not a new problem in the world. The story of Condotel is a “case study” of an enterprise, not the whole market. This is the time to purify the market.
MIKGroup has prepared a business plan in case the market worsens due to the impact of the disease?
In the context of the disease situation worsening like the past few days, the whole country must join hands, not just individual enterprise. Of course, for businesses, when the market worsens, there must be backup plans for themselves. At MIKGroup, we have prepared well in advance, so we just need to adjust a little business strategy to better suit the reality. Although, the market has faced many difficulties, we still make efforts to put projects into operation as committed with customers. Typically, the Mövenpick Resort Waverly Phu Quoc project has been open to visitors since March 1, 2020. We want to show our investors our capabilities with real products, not just paper commitments.
Feeling like MIKGroup is still quite optimistic with the market?
From a business perspective and myself as a real estate expert, I also have my own research. According to recent judgments and statistics, products still have good liquidity. But with a developing market like Vietnam, local crisis may occur in some areas rather than in the whole country.
Therefore, we can see that in the difficult economy, many projects are still in good liquidity. Only regret, the psychology of Vietnamese investors now still prefer short-term investment, quick flipping but forget that to get high profits from real estate, they must invest in long-term. The fact proves that, in the past 40 years, real estate prices have not fallen once, so I still recommend that investors should only focus on medium or long-term investment.
The real estate market in the future will be like?
I think after this period, the market will have positive changes in each segment. Such as residential real estate, people will be more concerned about hygiene and safety for residents. There will be the maturity of the market.
As an experienced real estate expert, do you have any message to individual investors so that they can safely invest in real estate now?
I think individual real estate investors shouldn’t invest too much. That means if there are 10 dong, you should not invest up to 8 dong. But that does not mean no investment.
We always conclude that when the market is calm, risks always come with opportunities.
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