Mr. Tran Nhu Trung, General Director of Green Growth and Development Joint Stock Company - EDGE said, Covid-19 has reshaped the real estate market with the rise of the trend of "investment near home and far from the province".
Around this issue, Mr. Trung had specific discussions with reporters.
The Covid-19 pandemic had a strong impact on the world economy. Real estate, which is considered as the background configuration of many other economic sectors, is also affected. How is the situation in the international real estate market?
I have followed the media and looked at data from reputable international organizations and learned that the central areas of high-density cities are facing a slowdown. Real estate in big cities like New York or San Francisco (USA) is struggling with the decrease in price and value.
Mr. Tran Nhu Trung, General Director of Green Growth and Development Joint Stock Company - EDGE
The most densely populated cities elsewhere also recorded a sharp drop in transaction prices or a very modest price increase due to the high risk of disease transmission. However, this is not the general appearance of the whole past time. The market recorded a sharp decline from April to July 2020 and after that there is a significant increase, even impressive from August up to now.
Does that mean that the market still has a bright spot?
Right! Completely contrary to the central area is the trend of price increase and increase in buying volume in rural and suburban areas. On October 12, USA Today reported that for four consecutive weeks to September 20, US home sales rose 13.6% in suburban areas, and 13% in rural areas. . House prices also increased by 13.7% and 16.6% respectively in these two regions. These figures are higher or higher than in urban areas.
Or in the UK, house prices in October were 7.5% higher than the same period last year. This is the strongest growth rate since June 2016. One of the main reasons for the impressive increase is the support package of about 40 billion pounds. Accordingly, transactions under half a million pounds are exempt from all taxes until March 2021, leading to massive transactions. Notably, the British people changed their buying and selling behavior, more interested in suburban and rural real estate. Since March, the price of a separate house with open living space on the outskirts has increased by an average of 6%, according to Halifax, a UK land registry.
In your opinion, what is the cause of the shift of real estate interest in the fringe areas of the British and Americans?
Buyers are more interested in suburban and rural areas because they need large, airy and fresh living spaces in the context of complicated epidemics. Buying a house in a suburban area will avoid the crowded, cramped scene, which has the potential to increase the risk of disease infection or violent problems. In addition, the rise of the form of working from home or the mix of working from home and office makes moving to work no longer a big obstacle for workers.
Sir, are the developments of Vietnam's real estate market similar or different from the world market?
There are many similarities. The first is that as soon as the epidemic breaks out, all commercial transactions decline, including real estate. Vietnam's figures are completely similar to other markets in the world in this regard.
However, the evolution of changes and its impact on the market need to have a data analysis to accurately describe.
I have used data reflecting the individual investor behavior of one of the major real estate e-commerce channels in Vietnam to research market issues. After processing 29.5 million Hanoi data, 34.8 million HCMC data and 404,000 Da Nang data, Nha Trang and Phu Quoc showed a strong decline in top markets. traditional private. There are times when the level of investor interest drops by as much as 70% in HCMC; approximately 60-70% in Da Nang and Nha Trang.
This data source also reflects an interesting ongoing market fact about the correlation between changing real estate location and investment interest. Analysis and overview of 29.5 million Hanoi market data shows the farther the distance from the district of investment interest to Hoan Kiem district (Hanoi), the greater the investment interest. That is to say, in the trading market, the farther from the center, the more interested buyers and find out compared to before the Covid-19 epidemic, the closer to the city center the decline.
The shift from the center to the suburbs is the denominator common story not only of the world but also of Vietnam. What does this mean? The Covid-19 pandemic changed the behavior, changed the habits and lifestyle of real estate buyers. Coastal real estate dominates in investment channels.
Thus, the Covid-19 event contributed to the prosperity of the peri-urban market. Are there any other factors that make this market attractive?
As I discussed earlier, the Covid-19 incident has become an important catalyst for consumer behavior change. For them, convalescence is now a staycation - short vacations, convenient transportation and the use of private means. Peri-urban real estate is in sight because it meets the above criteria.
In addition, the prosperity of the suburbs also comes from the increasingly perfect connection of transport infrastructure with the center, which is the unique natural landscape of the area. It is also the internal transformation of resort products here when there is a synchronized integration in utilities and services. For example, if we return to Hoa Lac, about 30 km from the center of the capital, we have Xanh Villas - a project planned according to the model of a closed urban area, promoting a civilized and fresh living environment. Legal is also clear. The project is built according to the model of high-class resort, with synchronous infrastructure, utilities, facilities, to create a classy green living space in the suburbs of Hanoi.
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