Ho Chi Minh CityExperts advise investors before buying real estate in the post-lockdown period to consider whether it can be sold and then put down money.
At the talk show “Searching for real estate and choosing investment strategies after the pandemic” recently, many experts said that, after 4 months of blockade to prevent and control Covid-19, Ho Chi Minh City and many southern provinces gradually opened. Living with the pandemic, the real estate market has also gradually restarted.
However, investment activities are now strongly differentiated by two streams of skepticism between opportunities (potentially profitable) and risks (potential risks) after a long time of freezing the blockade season. According to experts’ recommendations, in the post-lockdown period, the market still has many challenges but still has some opportunities. It is important that before buying assets, liquidity must be prioritized.
Mr. Tran Khanh Quang, General Director of Viet An Hoa Company, said that as of October, although Ho Chi Minh City and some southern provinces are preparing to reopen, real estate investors are mostly inclined to be cautious. more important than taking risks.
According to him, the fourth Covid-19 epidemic has caused the volume of property transactions on the southern secondary market to decrease by 90-95%. In the whole market, only about 20% of investors have overcome difficulties in the recent epidemic. The remaining 80% of investors are more or less affected by cash flow (heavily, they sell assets at a discount to handle finance, and when they are light, they sell to break even to reduce interest pressure). Large properties worth 10-20 billion dong are for sale a lot but it is difficult to get rid of the goods.
Mr. Quang warned, investors before buying real estate in the post-lockdown period must calculate whether this property can be sold after buying it. Because easy buying and selling can hardly be considered a deathbed for investors in a sensitive time when the market depends greatly on disease control.
The reason, according to him, is that if the real estate cannot be sold after having invested capital, even using borrowed money, the market will change unpredictably, the possibility of investors may be stuck or ” died on the pile of possessions”.
“Legal check first, then need to prioritize real estate that can be sold easily, ensure cash flow can be recovered, and then take into account profits. This is the time when profit ranks second in line. a series of other important criteria”, Mr. Quang recommended.
In addition, CEO Viet An Hoa also said that from the fourth quarter onwards, the safest option is not to borrow capital for investment. Or if there is a loan, the proportion of loan capital should only account for a maximum of 30% of the equity capital. For example, cash capital is 1 billion VND, so you should only borrow up to 300 million VND. When buying real estate, choose an area where you know the law and planning, the property can be sold easily and never forget the mantra “buying is easy but selling or not is difficult”.
Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam also said that when participating in the real estate market at this time, investors can note two principles of defense. The first rule is to only consider buying when you know it can be sold. This means looking at the liquidity of real estate before thinking about profits.
The second principle, according to Mr. Khuong, investors should prioritize risk management, should review and screen a series of criteria: legal risk, planning, cash flow risk, risk when using financial leverage…
And Mr. Truong Anh Tu, Deputy General Director of PropertyX Joint Stock Company, said that opportunities and risks always go hand in hand in the real estate investment process, but real estate buyers in the post-lockdown period have to review more. information more carefully than before.
According to Mr. Tu, besides the risk of low liquidity in the post-lockdown period, notable opportunities in the market today are a basket of products with more products to choose from than before, and preferential sales policies for buyers. to stimulate demand is quite diverse, from extending the payment schedule to the grace of the principal debt, loan interest support…
Currently, stimulus packages tend to expand and be larger in scale than before. Buyers should do a thorough legal check of the property, reputation, financial potential and experience of the investor, infrastructure development, local economic growth, etc. before “choosing a side to send.” gold” to both avoid risks and take advantage of opportunities.
“The compression of the market in the past time due to slow legal and lockdown is a big challenge, but there are risks. Opportunities still exist for investors who are alert before making decisions.” , said Mr. Tu.