SWING TRADING OF APARTMENTS NO LONGER ATTRACTIVE TO INVESTORS

Investing in apartments to capture short-term gains has not been attractive to investors due to high prices caused by limited supply, according to experts.

“Apartments are not as attractive as before and careful consideration must be given to swing trading,” Dao Van Duy, general director of Viet Nam Infrastructure Investment and Development Joint Stock Company told Dau tu Chung Khoan (Securities Investment) newspaper.

From the perspective of a developer, Duy said the reason the previously profitable apartment segment was not attractive to investors was encapsulated in the story of prices.

He said that with housing prices increasing continuously in recent years, developers had pushed prices to the ceiling, with the primary investors taking a large part of the profit and the possibility of any further increase in price being very modest. Many apartment building projects have not seen a price increase for many years.

Nguyen Duc Huy, an investor, said the pandemic pushed the market into a lot of difficulties but housing prices remained at a high level due to limited supply.

Huy added that housing prices were already at high levels, making swing trading no longer attractive.

According to Nguyen Van Dinh, deputy general secretary of the Viet Nam Real Estate Association, the time of swing trading apartments to earn significant profit was over as prices were unlikely to increase.

In big cities like Ha Noi and HCM City, apartments were now mainly to be bought for accommodation or for leasing and rarely for trading because the prices hardly increased much.

Dinh said swing trading of apartments was not a good idea at this time.

Starting from last year, many secondary investors put their apartments up for sale to cut their losses.

Pham Duc Toan, general director of AZ Viet Nam Real Estate Company, previously said most apartment owners must accept the loss if they sold their apartments.

Toan predicted in April that the apartment market segment would continue to slow down, mainly in the secondary market.

In different crises, assets like gold, foreign currency and real estate could be considered safe-haven investments. For real estate assets, important factors include price increases, liquidity and ability to use for business activities, thus, commercial land and property are more attractive than the apartment segment.

According to the Viet Nam Association of Realtors, there was an absence of swing traders due to low transactions and profitability.

Nguyen Thi Thanh Huong, general director of Dai Phuc Land said the opportunity for short-term investment was not huge at this moment due to low market liquidity, adding that short-term investment would provide gains only when the real estate market was robust or there were new key projects.

Source: VIR