If the Covid-19 pandemic breaks out again, what will the real estate market look like?

News

August 25, 2020

  • In general, not only the resort real estate segment get a new hit from the Covid-19, but also the whole real estate sector will continue to face challenges in case the epidemic breaks out again in Vietnam.


    Mr Nguyen Hoang_Director of R&D Department DKRA Vietnam forecasted that the real estate industry in quarter 3, 4/2020 will show more positive signs of recovery than quarter 1, 2/2020. However, the Covid-19 is very complicated and hard to prevent, thereby the epidemic’s impacts on the market are also very unpredictable.


    Vietnam' economic progress has been slow down since the pandemic came



    If there must be a second social distance (the first time in early April), the market will continue to fall into a state of pause. This state of "hibernation" is likely to last longer than the previous time because of finance, individual income and caution leading to a sharp decline in demand. "However, I believe that the Government is trying to take control well and prevent the disease assertively so that the socio-economy activities will be more stable than the beginning of this year", Mr Hoang said.


    Mr Nguyen Thai Huy, the private real estate expert believe that if the Covid-19 come back, it will significantly affect the real estate market. First of all, for real estate enterprises have just gone through a difficult period and resumed after a few months, then continue to encounter epidemics, the loss of human resources and finance would be remarkable.


    Customers sense the narrow in their financial resources, they prefer to hold cash for prioritizing essential needs, which limit the travel expense and affect the purchasing power of real estate.


    For real estate sales, according to Mr Huy, this continues to be a difficult time for sales because businesses are shortening budgets. However, he affirmed the second outbreak will be less intense than the first one thanks to the preparation.


    With the same point of view, Mr Nguyen Thai Binh_General Director of East Tay Land Joint Stock Company said that in the last round, Vietnam real estate has a quick recovering, but create a big differentiation in the product lines after COVID.


    "In my opinion, in case the Covide - 19 comes back, it will cause drama but not too large. Since the people are now quite experienced in dealing with the epidemic, the spread will not be as high as in other countries. Alternatively, they have been stayed cautious in investing money in real estate in the past few months. From that point, investors try not to invest rampantly and use the credit leverage method, hence, the impact will be easier to handle, however, the market will slow down or go sideways. Product lines near the inner city or with diversified ecosystems and satellite towns are still important ", Mr Binh affirmed.


    The outbreak disturbs every business fields and causes a huge loss



    Mr Mauro Gasparotti_Director of Savills Hotels Asia Pacific said that an outbreak of Covid-19 will affect the other tourist destinations in Vietnam, especially, both the resort and the public service segment because safety is the top concern of tourists. When disease strikes, visitors are willing to cancel or postpone travel plans. People will tend to avoid bustling areas like airports or restaurants and bars until the epidemic is completely under control.


    "We also assume that the domestic aviation industry will slow down in the next few weeks, while domestic tourism arrivals will also experience a significant drop. Revenue from conferences and seminars. will be affected when these major events are cancelled or rescheduled in no time ", Mr Mauro said.


    Accordingly, he claimed the current situation will be less tough in a few days. I hope a few new infections and the sources of transmission soon will be identified. Domestic tourists will then feel safe enough to resume business and tourism activities.


    "However, I think it will take at least a few weeks for the disease to be better controlled. We still believe in the growth potential of the Vietnamese resort industry in the long term. ", Mr Mauro addressed.


    Also with an optimistic view, Ms Nguyen Thi Thanh Huong_CEO of Dai Phuc Land acknowledged that, if the Government acts drastically and has prizes to support in time, the market will not be overwhelmed and investors’ worrying will be reduced. paradoxically, if the people panic, the following consequences eventually appear to the whole economy, not just real estate.


    Ms Huong said that not only the Government but also enterprises need to cope with the disease and define more remedies to live with it in the long run.


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