Covid-19 caused the biggest house price drop in Chinese history. Specifically, in mid-February when the Covid epidemic broke out in China, China’s third largest real estate developer announced the biggest home price reduction strategy ever, reducing 25% at 811. This enterprise project is selling. This is the biggest price reduction ever in China. In Vietnam, the Covid epidemic that appeared in January 2020 has quickly caused the real estate market to wobble. The resort real estate segment was hit the hardest, causing products such as condotels to be clinically dead. Along with that, rental real estate is also empty, causing businesses to massively cut rents to support customers. Housing real estate has little influence, currently the projects that are about to be sold have stopped. Many people who want to buy a home are having to rethink because of worries about the future in difficult economic times.
In the context of a sharp decrease in buyers, the real estate market has not yet announced any policy to reduce product prices. Even some new projects recently launched still determine the price is quite high compared to the market. Talking to us about this issue Ms. Nguyen Nhu Y – General Director of Ana Homes Real Estate Joint Stock Company said there are 4 reasons related to this issue.
Firstly, currently the market is quite scarce in supply. Since 2019, many businesses have faced difficulties in licensing procedures for new projects. In addition, recently, the management agency issued many documents requesting the review of land-use projects related to the state land, causing the projects to stop. Since then, creating a bottleneck that makes the supply of new real estate increasingly limited. Therefore, many businesses currently have no goods to sell.
Secondly, on the market, many projects are not eligible for sale according to Decree 99 (projects must complete infrastructure, complete foundation, must have a bank guarantee). Therefore, many investors are raising capital in the form of loan contracts, purchase rights or margin. With these types of products not yet formed, they cannot offer direct sales discounts. Investors can only silently reduce prices through sales policies such as increasing financial support. For example, if there was no grace period for the principal before, now there is a policy of borrowing at 0% interest rate, with a grace period on the principal. increase interest rate support from 6 months to 1 year or 2 years….
Thirdly, for projects that are eligible to sell mainly old products from 1-2 years ago, these goods are currently mainly in the inventory list. Therefore, the enterprise does not offer a direct discount policy for this product to avoid affecting revenue as well as financial indicators.
For inventory, now, instead of reducing prices at a time when the current liquidity is not high, many businesses also choose to mortgage assets to ensure cash flow for production and business activities in the future. difficult market conditions.
Fourth, at present, the Government is having active support solutions. And there are measures to curb the epidemic to ensure stability for the economy. At the same time, the fact that real estate businesses “fire” for the strategy of reducing product prices will affect the reputation and perspective of the market for businesses.
“It can be said that these are the four main reasons why we have not yet seen a clear decline in the prices of real estate products at the moment. I think that, although the current Covid-19 epidemic is having a strong impact. However, real estate businesses still have a very optimistic view of the market’s prospects and the market’s resilience when the epidemic is over,” emphasized Ms. Nhu Y.
According to Young Knowledge
