Will real estate fall in price when Covid-19 breaks out again?


In 2020, real estate prices increase during the two Covid-19 waves and the third outbreak of the year is still difficult to reduce housing prices, according to experts.

At the beginning of the year of Tan Suu, the epidemic broke out again, immediately becoming the biggest variable affecting the economy in general and the real estate market in particular. Below are shares of real estate experts with VnExpress on forecasting the impact of this variable on property prices in 2021.

Mr. Phan Cong Chanh, General Director of Phu Vinh Company, said that although the pandemic has returned to the close days of the New Year with many new strains of virus, it has a direct impact on people’s lives in February and is stirring up. There are many concerns about the economy, but real estate prices will be difficult to reverse at least until the second quarter of 2021.

According to Mr. Chanh, because Covid-19 had complicated developments in 2020 but the land price still increased abnormally, the return of the new virus could not affect real estate prices in the short term of 3-6 months. However, the liquidity (purchasing power, consumption) of the real estate market will be reduced immediately from the middle of the end of the first quarter, due to the psychological impact.

This expert confirmed that the movement of housing prices in the third and fourth quarters is still unpredictable because it depends on variables of disease prevention and control, but the downward scenario is very unlikely in the middle of the year. term.

CEO Phu Vinh analyzed, there are many reasons that make it difficult for real estate prices to decrease despite the new epidemic outbreak at the beginning of the year Tan Suu. Firstly, the deposit interest rate is being kept at a record low level so the cash flow will flow to asset channels or financial investment such as real estate and securities.

Secondly, the trend of cheap money is committed by the Fed (US Federal Reserve) to keep at least for the next 3-4 years until the world economy recovers. This cheap trend also affects the Vietnamese market, making people strive to find a safe haven for capital flows.

The real estate market of Thu Duc City. Image: Quynh Tran.

Third, real estate prices benefit from the nation’s public investment, including many key infrastructure projects in the period 2020-2021 and will continue in the next few years.

Fourth, the real estate market, looking at the primary goods basket, is still short of supply due to tightening policies and difficult legal regulations. This leads to new real estate products launched for sale in the year Tan Suu are still anchored in high prices due to the law of supply, less demand, and the syndrome of price increases due to scarcity.

“Although the real estate market is difficult to reduce prices, the scenario of an increase still needs a psychological boost that Covid-19 is controlled to gradually return to normal as before the translation”, Mr. Chanh said.

Similarly, in exchange with VnExpress Regarding the trend of real estate prices in 2021, Pham Lam, CEO of DKRA Vietnam, said that the pandemic has an impact on the price of real estate assets or not depends on supply and demand, the psychological reaction of the holder. properties and results of epidemic prevention.

In terms of the correlation of housing supply and real estate demand, the supply is declining while the demand is still high. According to Mr. Lam, supply-demand is the clearest indication of the long-term market trend and is often the most accurate reference parameter.

Owners’ sentiment in 2020 shows that they are not under great pressure to sell cheap. With asset holders being organizations (enterprises), the move to sell high prices will still take place in 2020 and with the individual holder (retail investor) some secondary transactions for It is still profitable even when selling at lower prices than in 2019. Therefore, it is necessary to observe more whether 2021 may have a low selling sentiment to determine the actual response but the probability of selling cheap is very low.

Next is the observance of progress on epidemic prevention by the Government, businesses and people from the first and second epidemics in 2020 very actively. New epidemic outbreaks close to the New Year’s Day were also frozen, drastically traced from the beginning, people and businesses are more experienced and cautious. “With the factors of supply and demand, the sentiment of holding assets and the development of epidemic prevention, there are many positive signals and it is less likely that these variables will drag down real estate prices in 2021,” said Lam. good.

Meanwhile, Mr. Tran Khanh Quang, General Director of Viet An Hoa Company, predicted that three scenarios of the real estate market at the beginning of the year of Tan Suu also showed that the probability of real estate price reduction is quite low. Specifically, with the gray scenario, where there is a crisis, the probability of a price decrease is estimated at only 15%, while the probability of an increase at an average rate of 65% and a strong bullish scenario has a probability of 20%. .

“The rebound of the pandemic is undoubtedly the biggest variable in the year of Tan Suu, which can have a strong impact on the purchasing power of the real estate market and real estate prices. Although the probability of falling prices is only 15%, this is Noticeable warnings and cautionary recommendations are never redundant “, Mr. Quang emphasized.

Minh Le

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