Apartments a safe investment channel: analysts

Apartments remain a safe investment channel that attracts cash flow soon, analysts said.

The real estate market has recently shown signs of "reversing" following the government’s move to tighten credit for real estate investment. Many speculators have withdrawn from the market since they can no longer access loans as easily as before, affecting the segment of land plots, townhouses, villas, and resort real estate.

Meanwhile, affordable apartment projects located in the heart of developing areas, benefiting from major infrastructure projects, are less affected.

The average selling price of Hanoi and Ho Chi Minh City apartments in the first four months of 2022 climbed by 9% and 3.4% respectively year-on-year, according to Batdongsan.com, Vietnam's biggest real estate data source.

The supply of apartments in HCMC and neighboring provinces like Binh Duong, Long An, Dong Nai, and Tay Ninh could not exceed 2,500 units in April, down 31% year-on-year, property services provider DKRA Vietnam reported.

New supply in Hanoi also fell by 20% year-on-year and 39% quarter-on-quarter in the first quarter, while selling prices rose by 13% year-on-year. Most of the supply came from the subsequent sales of six projects, with only two being introduced for the first time, consultancy CBRE Vietnam noted in a report

Data from Batdongsan.com has indicated a high level of interest and demand for apartment transactions since the beginning of the year.

"Given credit capital constraints, many investors continue to invest in apartments since it is a safe investment channel, with periodic payments and a high rental profit margin," said an experienced sales specialist in HCMC.

Purchasers are eager to own a home before possibly rising prices due to supply shortages and stringent lending measures. Meanwhile, experts believed that the market is losing liquidity, so investors should only engage when there is real demand or when they have long-term investing objectives.

Vo Huynh Tuan Kiet, associate director at CBRE Vietnam, said that this is a good moment to buy a house for living as prices are expected to rise soon.

Economist Nguyen Tri Hieu said commercial and residential real estate would always be in demand.

The commercial real estate sector has encountered a lack of tenants, but such a situation is unlikely to occur in the following years given the good economic recovery, he noted. "Meanwhile, residential real estate will always be in great demand and will continue to grow gradually."