Forecast of Vinh city real estate picture 2020

Push from macro factors

It can be said that 2019 is a year of many positive changes, when a series of macro policies are realized, opening up opportunities for real estate to break through.

At the end of 2019, the market nationwide experienced unexpected fluctuations when banks simultaneously announced a reduction in lending and deposit interest rates. According to the Prime Minister's direction, the target for 2020 is that the State Bank of the entire system will reduce lending interest rates to 0.5%/year. Joint stock banks also rushed to adjust deposit interest rates. For example, at VietinBank, the highest interest rate is now only 6.8%/year, down 0.2% compared to before; the highest interest rate of TienPhongBank decreased from 8.6%/year to 7.6 - 7.8%/year; ACB reduced 0.05%/year for 9-month and 12-month terms; Bao Viet reduced 0.05%/year for 6-month terms; VPBank reduced 0.4%/year for a series of terms...

Economists believe that this adjustment will have a major impact not only on banks but also on many related industries. Because if savings interest rates continue to decrease, a significant number of customers will shift from depositing money to investing in stocks, foreign currencies, real estate, etc.

Notably, the real estate industry has just received two particularly important new policies related to the land price adjustment coefficient (K) and the expected land price list for the period 2020 - 2024.

The “escalating” increase in the K coefficient in Ho Chi Minh City over the years. Source: Cafeland

Specifically, many provinces and cities have proposed to change the K coefficient for 2020, with a higher increase than previous years, meaning that each transaction must pay more tax, causing real estate prices to increase. For example, before 2016, land prices accounted for 15-18% of the cost price, but now, Hanoi calculates the K coefficient in inner-city districts at 1.85 to 2.3, so land prices have more than doubled.Or in Nghe An, land prices in Vinh City have reached the highest price of 65 million VND/m2.²(increased by 27.5% compared to the land price list for the period 2015-2019). In the districts, the highest price is 15 million VND/m²(increased by 87.5% compared to the land price list for the period 2015-2019).

In addition, according to regulations, the land price list will be adjusted every 5 years, that is, in 2020, land prices will be adjusted and increased according to the national level. This price list is determined as the basis for calculating land use fees; calculating land use tax; calculating fees and charges in land management and use; calculating input costs and directly affecting land prices...

According to the latest statistics of the Ho Chi Minh City Real Estate Association, land use fees account for about 10% of the value of apartments, 30% of townhouses and 50% of villas. Therefore, increasing the K coefficient and the new land price list will be two factors that strongly affect the land cost and selling price of the project when investors launch products to the market, directly affecting real estate trading in the coming years.

Vinh City real estate market moves professionally

Talking with Mr. Nguyen Viet Anh - General Director of Bac Trung Bo Real Estate Joint Stock Company - one of the leading real estate distribution units in Vinh City, we can see his optimistic assessment of the market.Vinh City Real Estatein the next 5 years.

“Real estate is an infrastructure related to and directly affects all industries. The development of other sectors also leads to the rise of real estate and vice versa. And currently, it can be said that Vinh City is holding the best conditions in terms of economy, society, technology, health, education, etc. for real estate to grow exceptionally,” said Mr. Nguyen Viet Anh.

In 2019, Nghe An organized the Investment Promotion Conference twice, collecting a total investment capital of about 57,000 billion VND from enterprises nationwide, in which Vinh City is the core urban area with open policies that attract the attention of many investors. This is a factor that resonates with the existing potential of Vinh City to create big explosions in the real estate sector.

In particular, in recent years, Vinh City has been considered one of the cities with many impressive achievements in all fields towards a smart and livable urban area, gradually realizing the goal of becoming an economic and cultural center of the North Central region.

Every year, Vinh City contributes about 33.52% of Nghe An province's budget, the average income per capita in the city reaches nearly 85 million VND/year. The city holds an important position on the domestic transportation route, the bus station system connects almost all areas of the country, the first-class railway station, Vinh airport is planned and invested to expand into an international airport, Vinh - Cua Lo boulevard helps the city combine with sea tourism to create a spearhead economic growth pole of the province.

According to Mr. Nguyen Viet Anh, the real estate industry in Vinh City itself is also receiving many positive advantages in addition to the driving force from the country's macro factors, preparing a solid foundation for an explosive 2020.

Vinh City has continuously seen quality real estate projects appearing to meet the housing needs of the people. Photo: Document

“2020 is expected to be a year of full-time work for the real estate brokerage association, because this is the intersection between old land prices and new land prices with a dizzying increase. Statistics from the website bactrungbo.vn show that towards the end of 2019, the demand for land and apartments shows signs of a sudden increase. For quick-witted customers, I believe they will soon make a decision to buy real estate at the beginning of 2020 when land prices are still low and there are many beautiful projects in Vinh City such asNam Le Loi Urban Area, Truong Son Homes Urban Area, Sai Gon Sky Apartment... Not to mention the Vinh City real estate market is increasingly shifting professionally with the participation of investors from all over, rich in prestige and experience, bringing customers ideal choices no less than famous markets such as Hanoi, Quang Ninh, Da Nang...".

Affirming the potential of Vinh City real estate in 2020, Mr. Nguyen Viet Anh stated his opinion: “With the increasing demand for buying houses and the habits and tastes of customers gradually changing from residential houses, auctioned land to project land, housing projects with advantages such as campus, synchronous planning, ideal space, diverse utilities, civilized community... will certainly "dominate" the market throughout 2020. This will also be a factor attracting more investors to Vinh City, bringing many classy projects and building a new, more professional appearance, developing more strongly for the Vinh City real estate market in the coming years".