Real estate 'surfing' investment increases again

The real estate market report of Datxanh Services Research Institute shows that the trend of buying real estate for investment purposes is increasing again in 2024, with many investors buying with the goal of making a profit. In 2023, the proportion of people buying real estate for investment accounted for 24%, buying for speculation accounted for only 1.5%. This number has increased significantly over the past year, with more than 33% of real estate transactions serving investment needs (accumulation, leasing...). Of which, the number of people buying for the purpose of speculation, holding assets for less than 1 year and then transferring them for profit accounted for 9.1% (an increase of 6 times).

According to Datxanh Services, the trend of real estate speculation and surfing is taking place strongly in the Northern markets, especially in Hanoi. The situation of investors buying and selling quickly within a few months, or even just 1 to 2 weeks to make a profit is quite common, especially in the type of apartments and land.

In Ho Chi Minh City, speculative customers are also reappearing in the last months of the year, but the developments are localized in the apartment segment of a few projects and account for a not too large proportion.

Previously, a study from the Batdongsan website also showed that more than 86% of investors buy real estate to make a profit, only holding the property for less than 1 year before selling it. Of which, the percentage of investors holding real estate for less than 3 months is 15%, from 3-6 months is about 35%, from 6-12 months is about 36% and only 14% hold the property for longer than 1 year.

A report on the real estate market by One Housing Research Company also shows that 81% of real estate buyers in Ho Chi Minh City and Hanoi have investment and speculation purposes, while the housing demand is only about 19%.

Explaining the reason for the renewed speculative wave, Ms. Trinh Thi Kim Lien, Sales Director of Datxanh Services, said that the Northern market in general and Hanoi in particular developed too hotly in 2024.

Hanoi apartment prices increased by an average of 35-60% while the absorption rate of projects remained high, from 75-80%. In addition, the FOMO (fear of missing out) mentality along with the heat from land auctions has caused many people to speculate in real estate to make quick profits.

In fact, the market has many investors who benefited from catching the right time. In Ho Chi Minh City alone, the strong price increase in both the primary and secondary markets and the "sold out" situation in some high-end, luxury projects opened for sale in the second half of the year have pushed the surfing trend back.

Ms. Trinh Thi Kim Lien forecasts that the demand for speculation and real estate investment is an aspect of the market and it is very difficult to completely eliminate. When the market recovers and grows again, the wave of speculation and surfing will also increase accordingly. If following the positive growth scenario (supply increases by 40%, interest rates below 12%), the demand for real estate speculation this year may increase even more strongly but will hardly explode.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan, commented that real estate is an investment channel with good liquidity and higher profits than other channels such as gold, stocks or banks, so the demand for speculation is always very high. In addition, the real estate tax policy in Vietnam is lower and more open than many countries in the region, lacking sanctions against forms of speculation and abandonment of land assets. The number of people buying real estate for speculation is too large, making the market develop unsustainably and pushing up real estate prices.

Ms. Pham Thi Mien, Deputy Director of the Vietnam Real Estate Research Institute (VARS IRE) said that operating under market mechanisms is very difficult to completely eliminate the element of real estate speculation and surfing. Especially, when the market shows signs of improvement and is more vibrant, this phenomenon is more likely to occur. However, the real estate market is still recovering after a long period of difficulty.

Therefore, all negative factors affect the market. To control the phenomena of speculation and price inflation, according to experts, it is necessary to have the cooperation of all subjects.