HCMC property investors expect market weakening this year

Over the last few months Nhien has been selling out his VND23-billion (US$984,000) portfolio comprising houses and lands as the market showed signs of falling.

The HCMC man with 15 years’ experience in investing in property, says: “I have recouped 35 percent of my capital, less than my expectation of 50 percent. But it is good to have cash as backup instead of putting all of it in property during this time.”

The credit policy can have an unpredictable effect, which is why reducing risk is necessary, he explains.

Minh, an investor who focuses on the city’s eastern and western markets, says the tightened credit policy and decline in number of transactions are having a negative effect on the market.

Even selling is difficult due to low demand, he says.

“Many investors are uncertain that prices would rise as happened during the pandemic. I am concerned there will be a wave of price declines at the end of the year.”

The HCMC property market is being affected by the State Bank of Vietnam’s credit tightening policy, consultancy Cushman & Wakefield said in a recent report.

“Tightened credit” has become a frequently used phrase in the market since early April as many banks turned on loan taps following a government order on preventing speculation.

With access to credit becoming increasingly difficult, investors have become more reluctant to buy, leading to a decline in transactions, Cushman & Wakefield said.

Economist Dinh The Hien said at a recent conference that the credit tightening is having a major impact on investor sentiments and many no longer expect prices to increase.

Speculators and short-term investors are not buying as they expect prices to drop even further, and transactions have fallen by 10-20 percent in certain areas in the last few months, he said.

“Investors are selling their assets for reduced profits.”

A recent report by property listing platform BatDongSan.com.vn said investors have become less optimistic about market prospects than at the beginning of the year.

Only around 35 percent of respondents expected a price increase in the next one to five years compared to 57 percent at the start of the year, the report, which polled 1,000 people, said.