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Bright spots of the real estate market amid the pandemic
25/11/2020 14:47 | Source: ThanhnienViet
Covid-19 has caused far-reaching consequences to the global economy, including the real estate industry. However, the industry still has its bright spots amid the pandemic.

The sharp decline in the world's economic engines is a clear evidence of the negative effects of Covid-19. Experts of the IMF International Monetary Fund said that since World War II, Covid-19 was the most serious socio-economic crisis. The level of devastation to the economy of the pandemic is more serious than the 2008 financial crisis. The US’s GDP is predicted to fall 6.6% this year. Singapore, Hong Kong, which are the Asia Pacific economic dragons, also fall into a similar decline scenario. Recently, the Monetary Authority of Singapore (MAS) has predicted that Singapore's economic growth could fall further below the previous forecast of minus 4% to minus 1%. Data from the Hong Kong government said the economy in Q2 fell 9% year-on-year.

Real estate, which is considered an important factor in constituting the economy, is also severely affected by the pandemic. In these big economies, real estate transactions stagnate, with many commercial centers, shops seeing less customers than ever. 

In the US, a report in early July showed that in May, about 4.3 million US citizens did not pay real estate loans or rent due. Mortgage and mortgage debt ratios hit the highest levels since the 2008 financial crisis. In Hong Kong, according to Savills data, prices of luxury apartments have decreased by 1.6-3.6%.


Warehouse real estate and industrial reale estate are bright spots of the Vietnam's real estate market

However, in that gloomy context, the world real estate market still has certain bright spots, especially the prosperity of commercial warehouse real estate. The social distancing and the restriction on travel have made people's online shopping trend soar, inevitably lead to the strong development of the warehouse system - a place to store goods. Warehouse rents in many markets have been increasing.

Despite controlling the pandemic well, Vietnam's economy is no exception in the global economic downturn. According to the latest report of the International Monetary Fund, Vietnam's economic growth in the first half of 2020 reached 1.81%. This is the lowest level in more than a decade.

The real estate market also suffered heavy losses. According to the report of the HCM City Real Estate Association, in Jan-Aug 2020, 923 real estate businesses closed, an increase of 136% over the same period last year. The supply and sales of the market also plummeted. Commercial real estate (office for lease; house, space for rent; commercial center for lease) and resort real estate are the segments that are heavily affected. 

Although many segments fell into a frozen state with reduced liquidity, industrial real estate and warehouse real estate emerged as bright spots of the market. With the advantages of labor forces, developed infrastructure, attractive support policies of the government and the ability to control disease effectively, Vietnam continues to be an attractive destination for the relocation of factories out of China. According to data from the Ministry of Construction, the industrial real estate still attracts tenants, the rental rate increases by about 9% over the same period in 2019. Vietnam's warehouse real estate also grows with the development of e-commerce.

Covid-19 has posed many challenges to the real estate market. However, this is also an opportunity for the development of many other segments and markets. The point is to see an opportunity and develop it. Everyone who participating in the market must change to find their own direction to continue to exist and develop.

With the theme "Change to adapt", the Vietnam Real Estate Summit - VRES 2020 also analyzes the changes of real estate seekers and how real estate businesses need to adapt with these changes; new trends in real estate products in the world and types of real estate products suitable for the development of the Vietnamese real estate market in the future, ... All of these remarkable contents will be presented in Hanoi and HCMC on December 8 and December 11, respectively.

VRES 2020 is expected to welcome about 1,200 guests who are leaders and senior managers of real estate corporations, businesses, and representatives of leading press agencies in Vietnam.

For more information about VRES 2020, please visit:

https://vres.batdongsan.com.vn/en
Hotline: 0904 64 81 83
Email: [email protected]