New regulations related to real estate tax, tight supply and limited capital flow are factors affecting the liquidity of the real estate market and business results of operating businesses. in this field.
Many challenges
The real estate market is experiencing a lack of liquidity because many projects cannot be deployed, leading to a lack of products, while the demand of investors and home buyers is very large. Illustration: Tuan Anh/VNA
According to the Ministry of Finance, in the 5 months of 2022, the amount of personal income tax collected from real estate transfer transactions reached VND 16 trillion, up 68% over the same period, while the whole year 2021 is 21 trillion dong and 2020 is 16 trillion dong.
In the face of recently revised regulations to make the market more transparent, many real estate transactions have to declare a more reasonable taxable price under the guidance of tax authorities. However, this could have a big impact on the real estate market, as speculative activities will be more closely monitored, reducing the number of potential transactions.
Do Thu Hang, Senior Director of Savills Research and Consulting Department in Hanoi, said that along with scarce supply, limited capital flow is also a "bottleneck" of the real estate market. However, moves such as controlling real estate credit, limiting the separation of parcels in some localities or strengthening the fight against tax loss are necessary to regulate the real estate market.
According to SSI Securities Joint Stock Company (SSI), in the context that the amendment of the Land Law is still in the process of consideration and there are more regulations set for the issuance of bonds by investors, the supply New products for real estate and apartment projects, low-rise buildings will continue to be limited, very few new products will be launched into the market.
Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association. Ho Chi Minh City (HoREA) said that the source of credit for the economy and the real estate market is "circulating blood vessels, oxygen tanks and oxygen tanks". If the business cannot access capital, there is a risk of "suffocation".
Currently, the real estate market is experiencing a lack of liquidity because many projects cannot be deployed, leading to a lack of products, while the demand of investors and home buyers is very large. Meanwhile, businesses still find it difficult to access credit sources.
In fact, according to data from the Ministry of Construction, in the first quarter of 2022, the number of newly licensed commercial housing projects decreased by 59% over the same period.
Due to the shortage of new supply, primary selling prices in key urban areas such as Hanoi and Ho Chi Minh City continued to increase. However, market liquidity decreased with the number of transactions in the first quarter of 2022 recorded at 20,325 transactions, down 20% compared to the same period last year.
SSI believes that, for the market to develop sustainably, the real estate bubble in some provinces needs to be cooled down. In the period of 2021 - 2022, due to the high demand for investment in real estate products, real estate prices in many areas across the country increased significantly. For example, land prices in Lam Dong and Binh Phuoc have doubled or even tripled in the period from 1 to 1.5 years, even in places where there is no developed infrastructure.
As a result, local authorities in some localities have stopped granting permits for agricultural and residential land to be divided into many small parcels of land, which helps to cool down the market and prevent housing bubbles. At the same time, selling prices at many urban projects in the suburbs have increased rapidly due to news related to infrastructure development.
At the beginning of 2022, the Ministry of Transport announced VND 304.1 trillion for a medium-term public investment plan, aimed at implementing transition projects, and completely dealing with outstanding debts under budget obligations. State government and start new projects in the medium-term public investment plan for the period 2021 - 2025. The southern region will benefit the most from the medium-term plan, with many highways and yard projects. international flight...
Therefore, the price of many urban projects in the periphery has increased by 15-20% over the same period. The absorption rate of some projects such as Aqua City, Waterpoint and Gem Skyworld is quite positive, ranging from 70-80% in the past 2 years.
However, according to SSI's observations, up to 70-80% of homebuyers are mainly investors and most of them choose to use financial leverage through bank loans, because the repayment schedule is determined by the bank. offer really attractive.
Some incentives can be mentioned such as interest rate support, deferred payment for the first 1-2 years, income guarantee for some products, loans up to 80-90% of the loan value, loan term buy housing up to 35 years...
SSI said that it is still closely monitoring the sales progress in the next phases of the projects. Thereby, this securities company found that house prices continued to be anchored at a high level while liquidity in the secondary market decreased recently.
Profits also decrease
VNDIRECT Joint Stock Company said that, in the first quarter of 2022, real estate businesses prolonged the downtrend with a decrease in net profit of 5.7% compared to the same period in 2021 and due to the sales volume of the apartment and residential segment. rental reduction.
Meanwhile, SSI Securities Joint Stock Company said that, within the scope of its research, most real estate investors still set double-digit profit growth in 2022, except the Company. Vinhomes shares (Vinhomes) plan to reduce profits in 2022, because the company has a high base in 2021.
The double-digit growth plan of real estate businesses mainly comes from the handover of real estate products that developers have sold in the period of 2019 - 2021.
However, according to SSI, in the period of 2023 - 2024, the net profit of real estate investors may be affected because construction projects in the period of 2021 - 2022 have land fund costs and financial costs. and higher construction costs. Specifically, the cost of input materials such as cement and steel increased by 7 - 15% compared to the end of 2021.
Regarding the leverage ratio, listed companies try to keep the debt ratio at a reasonable level or plan to gradually reduce this ratio. This is a key factor to help maintain the stability of listed real estate companies in the coming time.
However, there are many potential risks for unlisted companies, many of which are in poor financial health and must raise capital from private placement of bonds.
On the stock market, compared to the beginning of 2022, the real estate stock price index has decreased by 25%, equivalent to the decrease of the VN-Index as of mid-June. Accordingly, SSI believes that the price of real estate has decreased by 25%. Real estate stocks have been discounted to attractive levels for long-term holding.
However, with many challenges of the market in the coming time, SSI still maintains a cautious view on real estate stocks, at least in 2022 and advises investors to wait for the right time to solve the problem. echo.
According to Van Giap (VNA)
