Cash flow is still pouring into real estate, businesses take advantage of opportunities in 2022

February 10, 2022 | NEWS

As the top preferred investment field for investors, real estate will continue to attract strong cash flow this year.

While the stock prices of many real estate companies recently adjusted sharply after a period of galloping increase, Mr. Michael Kokalari - chief economist of VinaCapital investment group - still surprisingly appreciated the prospect of the stock. real estate bonds. But he has absolutely every reason to be optimistic. During many years of investing in Vietnam, VinaCapital's strategy has remained to identify stocks and sectors that benefit from the growth of the economy. While also interested in stocks and industries that benefit from FDI inflows, infrastructure development or clean energy, in sectors that will benefit from economic recovery in 2022, the expert This analyst particularly appreciates the outlook for stocks in banking, real estate and non-essential consumer goods.

Cash flow is still pouring into real estate

Expected high profit growth thanks to positive developments of the real estate market will be a springboard for real estate stock prices. Mr. Michael Kokalari forecasts that the profits of companies in the real estate sector will increase by about 25% this year. There are two reasons for this forecast. Firstly, after a 50% decrease in 2021 due to the impact of social distancing measures to prevent the Covid-19 epidemic, this year's apartment sales are expected to double. Second, legal problems related to real estate are being removed.

Especially, in the context that interest rates on bank savings remain low, investors will continue to choose real estate channels to pour money. Apartment prices in Hanoi and Ho Chi Minh City have increased by about 10% in 2021; At the same time, the pent-up demand to buy houses for living or investment in the past time will lead to an increase in the number of pre-orders for new projects. This expert even confidently affirmed that "of course real estate prices will continue to increase in 2022".

Sharing this view, Mr. Nguyen Tho Tuyen, Chairman of BHS Real Estate Joint Stock Company emphasized, real estate will remain a good investment channel, preserving long-term capital and safety. Although the cash flow continues to pour into financial investment channels such as stocks, bonds and even virtual currencies, all the money flows no matter where they go, they still end up taking profits in real estate.

Meanwhile, project supply is increasingly scarce due to increasingly difficult development of new projects. The reason is that many projects are stuck on public land; the expansion of the land fund by exchanging land for infrastructure has been wiped out; while the land fund for project bidding or land use right auction is not much. Because the supply is scarce, the price of land plots in the center of the provinces, apartment prices in Ho Chi Minh City and Hanoi increased about 8-15% in the past year.

Businesses seize opportunities

With bright prospects for both the real estate market and the stock market, most developers such as Novaland, Phat Dat, Dat Xanh, DIC Corp and Masterise Group have announced ambitious strategies by investing increase financial potential through issuing stocks and bonds to continue searching and acquiring land fund to prepare for the future.

In the last months of 2021, Dat Xanh Group has completed the acquisition of two "terrible" projects in Binh Duong with a total land area of 15 hectares and can supply 14,200 products to the market. A representative of Dat Xanh said that the Group plans to expand into the development of industrial urban areas, resort real estate and agricultural real estate. To further promote this strategy, besides the existing land bank of nearly 2,300 hectares, Dat Xanh will continue to develop large-scale land banks across the country.

Many other real estate companies such as DIC Corp, Dat Xanh, Novaland… all have plans to raise more capital through the issuance of shares and bonds. And if you look at the investment performance of real estate stocks, with the stock market price of DRH, DIG, CEO, DXG on February 8, 2022 has increased by 137%, 185%, 465% and 89% compared to before. a year, can see a positive outlook as well as the ability to access new capital of real estate companies.

Typically, Dragon Capital buys 10% of shares of An Gia Real Estate Joint Stock Company, and before that, An Gia has aggressively acquired 4 projects with a scale of 41ha in the period 2019-2020 and is in negotiation. buy another 45ha in the city. Ho Chi Minh City and Binh Duong. Nam Long Group has successfully issued shares at the price of 35,000 VND/share to many well-known investment funds such as Dragon Capital, Pyn Elite Fund and Kim Investment Fund.