The market has shown signs of crisis like 2007-2008. Has the real estate crisis started?

According to experts, the stock market has gained hotspots, FDI inflows and the attraction in real estate investment channel are signs of the 2007-2008 bubble period.

The worry about a real estate bubble like 10 years ago has been mentioned by experts at the Forum with the topic “Real estate market 2018: Impact from policy”. Mr. Tran Kim Chung – Deputy Director of the Central Institute for Economic Management and Research frankly said that Vietnam now has 8 out of 10 signs of real estate bubble.

According to Mr. Chung, signs such as transactions, prices, number of projects started, locations to increase, subjects participating in the market, scale, the value of the project, money to projects real estate is increasing. All of this shows the risk of a crisis.

He said that there are only two more signs that the market will hit the impact of the 2008-2009 crisis, which is the increase in public investment and capital for housing construction. Experience shows that the real estate market has a cycle of every 10 years revolving: Recovery – growth – recession – crisis.

“In fact, from 2011-2013, the market is at the bottom of the crisis, by 2014 recovery, 2015 – 2017 will start to increase. In 2018, I hope not to return to the market cycle”. He also said that this was an extremely sensitive time for investors to decide whether to buy or not.

Mr. Nguyen Manh Ha, Chairman of Vietnam Real Estate Brokers also concurred with this view. Mr. Ha commented that the situation of land fever in the first months of the year has not spread to the apartment, but if it does not control, it will cause ground bubbles, adversely affecting the market as happened in 2008 and 2009.

At the conference of investment and business opportunities 2018, TS. Tran Dinh Thien, the member of the Economic Advisory Group of the Prime Minister, said that the economy, in general, is currently showing signs of resembling the bubble period and the crisis in 2007-2008.

The signs Mr. Thien pointed out the record high levels of foreign direct investment, the stock market is hot, the real estate is still very active and also an attractive investment channel.

This expert thinks that it is necessary to prevent the risk of bubbles. However, he stressed that the economy still controls bubble and crisis factors.

“Our public investment is not as intense as before. Inflation is better adjusted. In addition, the state apparatus works more effectively ” said Mr.Thien.

Regarding public investment “not more intense than before”, Mr. Thien said that the private sector last year has made great strides. Private investment capital has been gradually replaced for slow disbursement of public investment capital, creating a driving force for development.

“The private sector gradually asserted itself in private and domestic private capital to replace the slowing disbursing public investment. Large economic centers such as Ho Chi Minh City and Hanoi have developed due to the huge motive force of the private sector, ”he said.

Growth in 2017 reached 6.81%, the result was confirmed by experts, but the quality should be paid attention to. That is the numbers, the change in the economic structure and the new growth dynamics. In addition, there is also export quality, when considering the value chain, the structure of labor resources.

Talking about development motivation in 2018, former Deputy Minister of Planning and Investment Dang Huy Dong said that the necessity of this year is to continue the growth of 2017 with the focus on improving the investment environment and make three breakthroughs.

First is the infrastructure breakthrough, Mr. Dong said that it is necessary to create a mechanism to attract resources.

“The state has also identified not necessarily doing everything. Large and large-scale projects have been entrusted to private. It is impossible to continue the construction of a power plant with only a few terms to negotiate for re-negotiation, which takes up to 5 years. In foreign countries, they build a huge airport only taking 2 years. ” Mr. Dong said.

The second is a breakthrough in policy change. Need to go into implementation and enhance breakthroughs in human resources.

Finally, the establishment of the State Capital Management Committee in enterprises will help accelerate the equitization of state-owned enterprises, minimizing the intangible resistance of equitization. The equitization of state-owned enterprises will have a lot of investment capital for infrastructure and development.

Mr. Thien emphasized the institutional changes in 2017. In particular, Special economic zone law was submitted to the National Assembly for discussion and expected to be passed in May. There will be an opening and breakthrough impact for Vietnam.

In addition, the adoption of a special mechanism for Ho Chi Minh City, handling bad debts, promoting equitization of State-owned enterprises (State-owned enterprises), and deleting cross-ownership in banking business is a good motivation for growth 2018.

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