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Securities fever to attack real estate market as well
The stock market was scorching hot and real estate prices skyrocketed in 2007. As the stock market is warming up these days, experts believe that the 2007 scenario will repeat, which means that the real estate market will warm up.
Getting hot and cold at the same time
Analysts said that in the months from March to May, securities investors on both the OTC and official bourses got the profit of 100 percent at least. Many people believe that the money obtained from securities investments will be injected in the real estate market.
The stock and real estate markets are described as two communicating vessels as cash flows between the two markets. In 2006-2007, most investors who got fat money from securities investments used it to purchase land and houses. The cash flow from the stock market not only helped thaw the real estate market, which had been frozen since 2002, but helped it generate the growth of 300%.
After the hot development period of the two markets, the gloomy period began in March 2008 and lasted until February 2009. Stock prices dropped dramatically, while the VN Index plunged. Securities investments had become a nightmare for many people, and the real estate market cooled down quickly.
In late 2008, people queued and scrambled to purchase apartments. Meanwhile, in the first quarter of 2009, real estate project investors could not lure customers even by offering sale prices lower by 40 percent than initial prices.
It always happens that the stock and real estate markets get hot and cold at the same time. That explains why some people plan to purchase real estate at this moment in anticipation that the stock market warming up will make real estate prices escalate.
2007 scenario to repeat?
Luong Tri Thin, General Director of Dat Xanh Real Estate Company, also believes that real estate prices will rise significantly in the time to come.
“I can see a lot of securities investors making fat profit in the last months as the market has warmed up. The cash will flow into the real estate market as the priority, and then to gold, bank deposits and cover other needs,” Thin said.
Bui Tien Thang, Deputy General Director of Sacomreal, said for sure that the real estate market will warm up, but will warm up one month after securities investors sell stocks out to get profit.
Marketing Director of Vietnam Housing Company Vu Anh Quang also affirmed that cash will flow from the stock market to the real estate market.
“The prices of real estate products have become soft after a long period of freezing,” he said.
Real estate developers, who seem to well understand the principle of ‘getting hot and cold at the same time’, are planning to market their products. Phu My Hung and Him Lam developers are reportedly planning to sell products in hot areas like districts 2, 7, 9 and Nha Be.
In Long An, Binh Duong and Dong Nai provinces, the prices of apartments and land plots have increased by nearly one million dong per square metre, including Phu My apartments in district 7 and Truong Tho in Thu Duc.
VietNamNet, PL TP HCM
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