Real estate speculation undercurrents appear

A recent report by the Ho Chi Minh City Real Estate Association shows that real estate speculation is re-emerging, although not as rampant as before, but is an undercurrent in the market.

Since the beginning of the year, about 45,000 new apartments have been opened for sale in Ho Chi Minh City, not to mention the remaining apartments. The projects launched on the market are mostly mid-range and high-end projects, while the demand in this segment is not too large, but according to investors, almost all projects are sold out after about 3 months of opening for sale.

Mr. Nguyen Ngoc Long, Director of the Dong Sai Gon Real Estate Exchange, said that at his exchange, most of the customers are speculators, because after buying a house, they do not live there, but leave it there waiting for the price to increase and then sell it for profit. “This speculation is quiet, but the number is quite large. They buy and sell just to surf, do not need much profit, often speculate in individual groups, so it is not as bustling as in 2007 and 2008,” Mr. Long said.

Real estate speculators when buying a house do not move in, but leave it there waiting for the price to go up to sell for profit.

In early October 2016, when Hung Thinh Land Real Estate Company opened the project on Dang Van Bi Street (Thu Duc District), the investor limited the sale to one unit per customer, but many people ordered 5-10 units at once. When they were not satisfied, they went to find reporters to sue the investor for not selling to them.

“This is a policy to deal with speculation in the project, to avoid the situation where people who really want to buy a house have to buy it at a higher price than the price that the investor sells, and the beneficiaries are the speculators. If speculators manipulate a large number of apartments, we, the investors, will be the ones to suffer, because if speculators cannot sell the apartments soon, they will delay payment, even accept penalties to return the house,” said Mr. Nguyen Nam Hien, General Director of Hung Thinh Land.

Looking back at the real estate market that overheated and formed a bubble in 2007, it can be seen that the lowering of lending standards and the loosening of credit policies made it easy for speculators to borrow money to buy properties, causing real estate prices to skyrocket. As a result, when the market “deflated”, it caused a situation of unfinished projects and bad debts in banks. This is still a hot lesson for real estate project investors.

Many businesses have taken measures to tighten speculation in their projects, mainly by limiting the number of apartment orders like Hung Thinh Land did. Some investors have even set a rule that customers can only transfer their apartments after 1 year.

“If speculation is not tightened, investors will be tying themselves up, because the lesson of 2007 is still evident to investors when the market was in a bubble caused by speculators,” said Mr. Ngo Quang Phuc, Deputy General Director of Himlam Land Real Estate Company.

However, even if investors seek measures to tighten speculation, speculators still have "tricks" to take over many project apartments. A land and apartment speculator in Ho Chi Minh City said: "To deal with investors tightening the number of apartments for sale, I can ask my parents, wife, children, siblings... to buy one apartment each, so I can still buy a few apartments in a project. In addition, I can ask the investor's real estate agent to buy an apartment, put it in their name, and then transfer it to me."

To limit speculation, the Ministry of Construction recently issued Circular No. 19/2016/TT-BXD, guiding the implementation of some contents of the Housing Law, including regulations on tightening speculative housing.

Accordingly, in Clause 3, Article 32, Circular 19 stipulates the conditions for transferring commercial housing sale and purchase contracts. For speculators who "hold" many houses in one contract with the investor, when transferring, they will have to transfer all of those houses. This is not easy, because finding a buyer for the "whole lot" is not simple. If transferring separately, they will have to perform an additional action of re-signing the contract with the investor to separate the apartment they want to sell, or signing an appendix to the contract.

According to Baodautu