Real Estate Frenzy to Leave Lasting Painful Consequences on the Economy and People

Diep Nguyen

10:30 26/03/2019

BizLIVE -

Who profit when real estate prices go up? They are the people who own many pieces of land, the real estaes with huge real estate assets and investors.

Real Estate Frenzy to Leave Lasting Painful Consequences on the Economy and People
From the last few months of 2018 and some first months of 2019, throughout Vietnam, Vietnamese talk about the rising real estate prices. People from all walks of life can become real estate investors, earning money too easy makes people happy.
At the same time, according to the reports from some real estate trading houses or agencies, real estate prices in Vietnam are still low compared to Singapore, Hong Kong. The remaining question is the real estate really all bright or are there any painful consequences for the Vietnamese economy and consumers?
According to the article from Saigon Economic Times, real estate prices in Hanoi and Ho Chi Minh city are not cheap. When compared to people’s incomes, real estate prices in Hanoi are far more expensive than Western countries, USA, Canadan, Australia or New Zealand. 
Real estate prices in Eastern Asian countries are high because of cultural reasons, Eastern Asian people consider the same interest and concept that real estates are assets. At the same time, the over appreciation of real estate has its origin from the speculation and herd psychology.
It is true that real estate is a speculative asset, real estate market is an imperfect one and there are many holes to speculate. Real estate prices are determined by the supply and demand rule (sellers and buyers psychology) and there are also winners and losers when prices go up.
Who profit when real estate prices go up? They are the people who own many pieces of land, the real estaes with huge real estate assets and investors. Poor people suffer from this phenomenon and young people who do not have much savings from incomes face more uncertain futures. Real estate price surge benefits the already rich people and bridge the rich and poor gap. 
So far there have been many painful consequences from the real estate frenzy. Some people become over rich, spending vastly on foreign luxury items, contributing nothing to the economic development of the country. The land resource is wasted in speculation but not put into manufacturing.

DIEP NGUYEN

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