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Expert: 2007 real estate bubble may return
Dr. Tran Du Lich, Member of the National Assembly Economics Committee, former Head of the HCM City Economics Institute, has said that the real estate market is now witnessing a ‘virtual fever’ and warned that the 2007 bubble may return.
Lich said:
I think that the frequent changes which occurred in 2007 may repeat this year. The changes may happen with the warming up of the stock market and then the warming up of the real estate market as securities investors, who get profit from securities investment deals, transfer capital from the stock market to the real estate market.
In fact, a lot of investors are shifting investment channels, which has led to real estate prices increasing in some areas.
However, I think that the sharp price increases in the real estate market have been caused by investors, not because of increased demand.
Therefore, it is now too early to say that the real estate market has begun recovering and warming up. Therefore, I would like to warn investors to keep cautious with investments. It is very likely that both the real estate and stock markets will go up and down regularly, which means that the risks will be high.
Do you mean that investors should not be in too much of a hurry to shift to other investment channels and should stay with the stock market?
I cannot say for sure where investors should inject their money. It is just my guess. There is no school in the world which teaches people about where to inject money, as there is no common model for all investors. Challenges and opportunities always exist.
Many investors might well remember the real estate bubble in 2007. . .
Real estate has always been considered a profitable investment channel so it is understandable why many investors want to pour their money into it.
And when people follow each other in the ‘investment movement’, risks exist.
The national economy has not recovered, but real estate prices have been increasing. Do you think that the prices have been increasing because investors have been deliberately trying to push the prices up?
There always exists a gap between desire and reality. For example, with the real estate trading law, we want all real estate transactions to be carried out through real estate trading floors. However, in fact, many transactions are still being carried out ‘underground’. As the transactions are carried out on a large scale, this certainly affects real estate prices.
VietNamNet, TBKTVN
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