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Vietnam property firms gear up for the post pandemic recovery

May 23, 2020 | 14:33

After a period of hibernation, in early May 2020, real estate businesses have started to return to the competitive race after Covid-19 pandemic at ease. It seems that the difficulty has passed with the real estate market.

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Property firms are gearing up to tap opportunities (Photo: Financial Magazine)

According to VNS, 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 others 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 temporarily halted operation increased by 94 per cent.

Transactions also slumped in the quarter, equivalent to 40 per cent of the same period of 2019. Only 14 per cent of property products available in the market in the quarter were sold, the lowest level in the past four years.

vietnam property firms gear up for the post pandemic recovery
Industry insiders believe the market would be robust in the next two years. (Photo: VNS)

The market becomes active again

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

A recent report of the information channel Batdongsan.com.vn shows that there have been positive signs back to the market of some businesses, although the market is still difficult.

Specifically, the number of listings dropped sharply during the first period of social distancing but then increased sharply to 73% when the distancing requirement was relaxed. Notably, the level of interest of users did not decline in both March and April. This showed that although the supply is limited and the price has not dropped sharply, buyers are still willing to return to the market.

In fact, despite the strong impact of the Covid-19 epidemic, some businesses and real estate developers still have solutions to reach customers.

For example, CenLand of CenGroup, from the time of the outbreak, has changed its business strategy. Specifically, the Cenhomes Ver 2.0 app adds many features such as posting management, transaction management, customer care, and online deposit...At the same time it opened online sales service, livestreams, online talk shows...

Mr. Pham Thanh Hung, Vice Chairman of the Board of Directors of CenGroup, said previously the number of online transactions was about 200 transactions, while the number of successful online transactions in the last 3 months reached about 400 transactions.

Recently, Vinhomes has officially opened for sale for the first time the S1.08 apartment tower at Vinhomes Ocean Park's coastal city.

This is the first time a real estate sales event combined with a 3 in 1 form: live organization, livestream and online order. After only 60 minutes of the event, nearly 250 apartments, equivalent to 50% of the shopping cart of the S1.08 were traded quickly and successfully.

Similarly, Novaland Group is aggressively opening the Aqua City project in Dong Nai province with a scale of 1,800ha. This is considered to be the largest project in Dong Nai Province. This has created excitement for the Dong Nai real estate market today, according to Financial Magazine.

vietnam property firms gear up for the post pandemic recovery
The real estate market of Viet Nam is still attractive to investors (Photo: Realtimes)

According to Nguyen Quoc Bao, deputy director of real estate firm Danh Khoi Group, 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.

According to Pham Lam, chairman of real estate services firm DKRA Vietnam, 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 2020-21.

Tran Le Thanh Hien, chairman of Danh Viet Group, 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.

The real estate market of Viet Nam 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 stable economic growth, improved transport infrastructure and rapid urbanization.

The Government’s efforts in hastening administrative reforms and speeding up disbursement of public investment were expected to create the impetus for economic growth which would benefit the real estate market, reported by VNS.

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