CEO Vu Cuong Quyet: Skyrocketing Property Prices Pose Significant Concerns for Real Estate Professionals

According to Dr. Cấn Văn Lực, a member of the Prime Minister’s Policy Advisory Council and Chief Economist at BIDV, during a recent event, government leaders requested a group of experts to analyze whether the current real estate market is overheating. Utilizing the International Monetary Fund (IMF)’s scientific framework, a market is considered overheated if property prices in a locality surge by more than 20% over three years, followed by a 30% decline.

Dr. Lực highlighted that real estate prices have risen rapidly in recent times, clearly indicating an overheated market. The critical question is whether prices will stabilize or decline. He emphasized that achieving market stability requires coordinated efforts from the government, real estate developers, and investors.

When discussing Ho Chi Minh City’s real estate growth, Dr. Lực cautioned against generalizing the entire market’s performance. Instead, he stressed the importance of identifying specific segments, such as condominiums or land plots, that are driving the increase. He attributed the primary growth to the condominium sector.

“A blanket statement claiming a 10% rise in HCMC’s real estate without specifying the segment or location can lead to misunderstandings,” Dr. Lực warned.

He further explained that HCMC’s real estate market is segmented into distinct areas, including Bình Dương, Bà Rịa – Vũng Tàu, and the city center, each with varying price levels.

Dr. Lực believes that while multiple factors are driving price growth in HCMC’s urban core, government regulatory policies act as a counterbalance. When prices exceed affordability, the government intervenes with appropriate measures.

“Anticipating price increases is a natural expectation, but sustainability is key. However, an overheated market negatively impacts all stakeholders, particularly developers and investors, who are the first to bear the brunt,” he stated.

Dr. Lực predicts a moderate price increase for HCMC’s real estate, suggesting a 5-10% rise as a sustainable and reasonable range.

Vũ Cương Quyết, CEO of Đất Xanh Northern Region, shared his perspective: “For real estate professionals like us, excessive price hikes are a significant concern. Historically, sharp increases have been followed by market downturns and price corrections. Therefore, we advocate for sustainable, stable growth, which necessitates effective government regulation.”

Regarding price growth, Mr. Quyết hopes that HCMC’s real estate appreciation will outpace inflation. Ideally, he envisions prices rising in line with economic growth rates.