Investment in Real Estate: Right Time for Impressive Breakthroughs

3:56:28 PM | 12/29/2009

Mr Le Duc Hai, General Director INT Group, had a talk with Vietnam Business Forum about the trend of investment in Vietnam’s real estate market in the near term.
 
The real estate market has repeatedly experienced ups and downs. What is the market trend in the near term?
I think there are some positive signals in the real estate market, particularly in the southern region. The market has been gradually coming back to its real value. Secondary investors and ordinary clients seem to be more alert to market fluctuations instead of rushing into common trend as earlier. The market has been running back to its rules. The market, product prices and market liquidity are decided by product’s real value, clients and buyers. The seller-dominated market will be over soon. Experts said that the real estate market will not experience big changes in 2010 but liquidity seems to fall. Real estate projects in the inner city will not be as attractive as present because they were exaggerated. In order to boost liquidity, projects that were inflated in the past should reduce prices in the coming time. New projects will meet market demand with better quality and more affordable prices. Particularly, projects that are located in developing areas will be the most attractive to investors and clients.
 
What is the strategy for Vietnamese real estate investors to be more competitive to experienced foreign investors?
Investors should study the market seriously to assess market demand. They should also select new investment areas with great opportunities and development potential to make new and useful products to users. It is essential to make price strategies in line with capital flows to share with secondary investors. Any investors who are capable to make products that can go beyond consumers’ demand to compete with current and future products will be successful. We should consider real estate normal goods as well as enhance its essential values. Due attention should be paid to clients as they only select products that can satisfy their demand.
 
Investors are now interested in ecological real estate. Do you think that market segment will be a” bubble”?
Investors are keen on ecological real estate due to major causes of investment period, location and trend. Ecological real estate is aimed at enhancing people’s living standards that grow in parallel with social development. Prices of real estate in general and ecological real estate in particular often rise as fast as social demand and development pace. This means that prices of ecological real estate will continue to rise in the coming time if investors acquire land in the government’s development planning.
 
Generally, ecological products always have a stable development trend and rarely experience exaggerations as client of this market segment are those who have real demand and few brokers work in this fledging market segment. The ecological real estate market will continue to develop amid an unruffled trend of the whole market as secondary investors and clients have realized true value of this market part in a modern world.
 
Investment in high-end real estate is potentially risky now. What do you think about that?
The real estate market has undergone a hardship period as demand has taken shape and gradually risen with participation of more investors in high-end real estate. Thus, some people may follow to make profits, which was often seen in the real estate market in the inner city in 2000.
 
It is very risky to invest in this market if investors do not have competence, define real demand, acquire good locations, estimate suitable capital flows, make good products and satisfy market demand and draw out suitable cooperation and development strategy. In my opinion, if investors have one of the aforementioned shortcomings, they may fail in this market. For me, with my 10-year experience in investing in real estate market, I find it’s high time to make a breakthrough.
 
How is INT’s plan to invest in ecological real estate?
In initial years of the 21st century, there was a trend to buy land in the surroundings of Hanoi to build rest houses for weekends. After that owners of these garden houses faced a wide range of difficulties including having no methods of taking care of plants and managing their houses amid their absence, much dependence on unprofessional housekeepers, sadness during holidays due to lack of recreation and entertainment means and worries triggered by the absence of local medical services. Being fully aware of this, INT and its contractors have paid due attention to development of villas in its special land funds, which are equipped with public conveniences of swimming pools, tennis courses, spa area, halls as well as housekeeping service amid landlords’ absence, garden party organization, and on-demand medical service. We have also launched time-share services to help landlords raise their incomes by leasing their villas amid idleness. Our mission is to create perfect and convenient villa complexes in the near term.
 
We are also preparing for three large-scale projects to meet people’s high-end convalescence by forming four-season ecological parks in the northern region. Our guideline is to always ensure that projects will be completed on schedule, products are at high quality and all commitments are realized. In 2010, INT will launch Green Villas Club to attract investors, clients and people who love green parks, ecological environment to form a playfield to boost market development.
Reported by Luu Hiep