“According to our simulations, the supply-demand in the property market will be balanced in 2018. The supply is currently a bit higher than the demand. An overdemand will occur only after 2018, and a bubble will likely arise in the 2021-2023 period,” said Le Xuan Nghia, director of the Business Development Institute.
When Vietnam joins the Trans-Pacific Partnership (TPP), around 2.5 million-3 million people will migrate from rural areas to cities, creating the second urbanization wave and pushing up demand for real estate, the economist added.
The local realty market seemed to have bottomed out in 2014 and will be pulled up by tailwinds in 2015 such as strong sales, higher credit growth and lower inventory, said Dang Hung Vo, a former deputy minister of natural resources and environment.
Regarding the possibility of the return of a real estate bubble, Mr. Vo commented that the market has overcome the spontaneous phase and regulations have been tightened. “Thus a bubble is unlikely,” he stressed.
The local realty market will have a brighter outlook than that in 2015 and a new cycle will start with enhanced transparency and competitiveness, the expert added.
Construction Minister Trinh Dinh Dung said at a parliamentary sitting last month that a bubble in the real estate is not on the horizon at the moment. However, the market should be closely monitored.
Sharing the same view, Le Anh Tuan, head analyst at Vietnam-focused Dragon Capital, said that three main factors for a downturn of the market such as soaring prices, changes in policies and deterioration of macro conditions are not clear. Optimism now dominates the local real estate market.
According to data of the Ministry of Construction, the value of real estate in inventory was estimated at 53.25 trillion dong ($2.37 billion) as of November 20, down 58% from early 2013.