Real Estate Insights

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Hanoi Real Estate Insights

Vietnam Property Market Action Needed To Avoid Crisis in 2023

Vietnam property market needs to act quickly in 2023 before it is too late and to avoid a crisis. The property market in Vietnam is not a major crisis such as what is happening in China is the past 2 years. However the government and property developers in Vietnam needs to act quickly to avoid a major crisis involving cash flows, property prices, and sales properties in Vietnam.

What is happening to Vietnam Property

Vietnam needs to act quickly to avoid a worsening property-sector credit crunch that could harm its strong economic growth. Some $4.6 billion of property developer notes tracked by Vietnam’s bond association will come due in the coming year and these firms may struggle to meet their financial obligations without government support, according to local real estate executives and analysts. The availability of funding has decreased significantly due to investor concerns over an anti-corruption campaign and a freeze on new bond issuance in the industry.

The approaching maturity wall runs the risk of setting off a wave of defaults, which could escalate the real estate problems into a larger crisis affecting the banking industry and the economy. Although Vietnam’s property debt is relatively small in absolute terms compared to China’s, it nonetheless accounts for around 11% of the country’s total economic activity. Growing concerns of a growth hit akin to that experienced by China are motivating calls for Vietnam’s leadership to take action now, before it’s too late.

Property Stock Benchmark

Signs of stress are already spreading. Fitch Ratings recently estimated a 5% drop in home sales next year, which coupled with rising costs will lead to a rise in leverage at property firms. A lack of cash has forced businesses to turn to shadow loans at very high interest rates and sell properties at discounts as deep as 40%.

Stress symptoms are already emerging. Recent predictions by Fitch Ratings for a 5% decline in home sales in 2019 combined with growing costs will increase leverage at real estate companies. Due to a lack of cash, firms have been compelled to sell properties at significant discounts of …

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Hong Kong Real Estate
Real Estate Insights

Hong Kong Real Estate Running Into Issues in 2023: Update

Hong Kong real estate prices are falling and continue to fall into the year 2023. Read on more to find out why the most expensive city in the world is having problems in its property market. 

As borrowing costs increase, the housing market downturn in Hong Kong is worsening.

According to information released on Friday, the Centaline indicator of secondary housing prices decreased by 2% in the week ending October 30 compared to the prior week, the most since March 2016. The index’s decline brought it to its lowest point since December 2017.

With the Centaline gauge rising by more than 500% from its low point in 2003 to its peak point last year, Hong Kong real estate was among the biggest benefactors of the low global interest rates. Due to rising borrowing prices, a contracting economy, and increased selling pressure brought on by a resident exodus, this is now beginning to turn around. Since its peak in 2021, the secondary home price index has decreased by 14%.

Due to Hong Kong’s currency linkage with the US dollar, the city’s one-month borrowing rate, often known as Hibor, has increased to its highest level since 2008. According to data from the Hong Kong Monetary Authority for new loans from September, more than 96% of mortgages are linked to Hibor.

Residential property values in the city are predicted to decrease 30% from their 2017 levels through 2023, according to Goldman Sachs Group Inc. For an in-depth analysis check out the article here.

Hong Kong Real Estate in 2023:Outlook

A “wait-and-see” mentality is common among homebuyers and homeowners as a result of the uncertain market conditions and worry about interest rate increases.

Due to poor market sentiment, the primary and secondary markets both experienced declines of 8.2% and 5.2% MoM, respectively. According to information from the Land Registry, a total of 3,875 transactions were reported in the residential market, a little decline of 6.3% MoM.

According to the Inland Earnings Department, Hong Kong’s overall stamp duty revenue from home sales registered 202 cases in September, hitting a new two-and-a-half year low. Buyer’s …

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Australia Housing Market
Real Estate Insights

Australia Housing Market In A Downturn, and Decreasing

The housing downturn in Australia continued into November but slowed down, which suggests the real estate market is starting to respond to rising borrowing costs and even the possibility of future interest rate hikes.

Sydney, the bellwether market, where prices fell 1.3% for a 10th consecutive monthly decline, was mostly to blame for the slowdown in the rate of correction, according to a data released on Thursday by CoreLogic Inc. The national index, which incorporates regional markets, experienced its smallest decrease since June in November, down 1%.

The numbers indicate that despite the greatest monetary tightening cycle in a generation, the A$9.7 trillion ($6.5 trillion) property market is holding up fairly well. Since May, the Reserve Bank has increased interest rates by 2.75 percentage points, bringing them to 2.85%.

According to Tim Lawless, research director at CoreLogic, “perhaps we are seeing the initial concern over buying in a higher interest rate environment wearing off.” However, it’s accurate to state that housing risk is still heavily weighted to the negative as long as interest rates continue to rise and household balance sheets continue to deteriorate.

A top RBA official voiced optimism in the Australian property market on Wednesday, noting that prices are still 20% higher than they were at the start of the epidemic. Additionally, as unemployment is at its lowest point in nearly 50 years, borrowers are in a good position to make their obligations, and loan arrears are expected to be kept to a minimum.

“Perhaps we are seeing the initial apprehension over buying in a higher interest rate environment wearing off,” says Tim Lawless, research director at CoreLogic. As long as interest rates keep rising and household balance sheets keep getting worse, it is true to say that housing risk is still significantly skewed in the wrong direction.

On Wednesday, a senior RBA official expressed optimism about the Australian real estate market, noting that prices are still 20% higher than they were before the pandemic. Borrowers are also in a good position to meet their obligations because unemployment is at its lowest level in almost 50 years, and …

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US Housing Market
Real Estate Insights

US Housing Market In A Slump in 2022

The US housing market boom, which lasted for ten years, is over, and the market has become strangely calm.

Both sellers and buyers are making room in the US Housing Market. The real estate professionals who helped them during the epidemic housing craze are now left scrambling for listings or leaving the industry as deals plummet.

Inventory is remaining low, keeping values from declining further as housing prices decline in the most volatile areas and the economy teeters on the brink of recession. However, the industry is in a state of disarray as a result of the upheaval brought on by skyrocketing mortgage rates, which are a result of the Federal Reserve’s campaign to fight inflation. The market is also indicating that tougher days are ahead.

According to Zillow data, sellers listed 24% fewer houses in October than they did a year earlier, marking the fourth consecutive month of a decline. Purchases decreased at the same time and are currently 17% below their October 2019 levels, before Covid hit.

Brokers are having trouble finding buyers because a typical home is now only affordable to those making over $100,000. Try persuading a homeowner to sell as well, especially if doing so would require switching from a 3% mortgage to a lot more expensive one.

Professor of real estate at the Wharton School of the University of Pennsylvania, Benjamin Keys, compared the market to Han Solo in carbonite and said, “This is a market that could stay frozen for quite some time.”

US Housing Market Pressure on Buyers or Sellers?

According to Zandi, homeowners holding off for the time being are waiting for a larger decrease in rates, which would make it simpler to sell and less expensive to acquire anything else. However, when more people get married, have children, or change jobs, there will eventually be a steady rise in listings.

Regarding a future economic slump, Zandi said, “Once the employment market starts to flip — and it will — the pressure will accelerate.” People will need to relocate.

Any additional listings will face competition from houses that are currently …

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Hong Kong Property
Guides Real Estate

Hong Kong Luxury Property Sales Slump Heading Towards 2023

Hong Kong, one of the least affordable housing markets in the world, is experiencing a rare downturn, and the impact on the city’s luxurious property market is obvious.

A 1,875 square foot (174 square meter) apartment for sale in the Repulse Bay neighborhood on the southern tip of the island, where some of the most expensive properties in the world are situated, is currently advertised for HK$95,000 ($12,160) per month, 17% less than the rate it was leased for the previous year. A real estate brokerage that is closer to the central business district advertises on its window that it is “confronting the reality” by listing an apartment for HK$30 million after a HK$2 million discount.

Residential, office, retail, and primary and secondary markets are all affected by the slowdown in Hong Kong’s real estate market. Although there are many high net worth individuals who live in the financial center, the top end of the market has not been spared. According to real estate organizations, there are fewer transactions on the market, prices for sales and rentals are dropping, and there are fewer people viewing homes.

According to a price index from Knight Frank, the migration of expats, closed borders with the mainland, interest rate increases, and an unsteady global macroeconomic climate have all contributed to the decrease of luxury home prices to a 15-month low. High-end home values are predicted by Savills Plc to fall further five to ten percent by 2023. According to Centaline Property, only 1,800 luxury properties will be sold in the year 2022, the lowest in nine years. 

Why Hong Kong Property Market Is In A Slump 

The recession in Hong Kong’s property market has an impact on all sectors of the economy, including residential, office, retail, primary, and secondary markets. Even though the financial hub is home to many high net worth individuals, the top end of the market has not been spared. Real estate associations claim that there are fewer transactions taking place on the market, prices for purchases and rents are falling, and fewer people are looking at houses.

Expatriate movement, tight …

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Homeownership Generational Gap Trend in 2022
Real Estate Insights

Homeownership: The Generation Gap Trends in 2022

The generation gap in homeownership is a topic of interest to many people. Many factors can contribute to the difference in homeownership rates between younger and older millennials. For example, the age group of younger millennials is between 23-31 years old for a generation born between 1990-1998. On the other hand, older millennials are the age group between 32-31, born between 1980-1989. 

The generational homeownership gap study affects property markets worldwide, as the decision-making process to purchase homes and real estate are similar.

Generational Difference in Homeownership 

Younger Millennials are more likely to be renters than homebuyers. This is because they are less likely to have the financial stability and income needed to purchase a home. Older Millennials, on the other hand, tend to be homeowners who have more financial stability and higher revenues.

A study by the National Association of Realtors found that in 2022, only 36% of people aged 18-34 were homeowners. This is compared with 65% of people aged 35-44 and 76% of people aged 45-54 who were homeowners.

While there is a significant difference between younger Gen Y and older Gen Y in terms of homeownership rates, it’s important to note that both groups can still buy the property or purchase a house for sale if they want it enough.

The most obvious factor is the economy. Younger Millennials entered the workforce during a time when there was a significant economic recession, so they may have had more difficulty saving for a down payment. Conversely, older Millennials entered the workforce when there was an economic boom, so they may have had less trouble keeping a down payment.

The study represents data collected by age groups into three categories.

  1. Gen Z buyer: age (18 – 22, year born 1999-2011)
  2. Younger Millennials: generation (23-31, born 1990-1998)
  3. Older Millennials: generation (32-41, born 1980-1989)

We will dive right into representing the difference between younger and older millennials, as this is where the main parameters and metrics are discussed. Comparing these two main generational groups is where the main buyers are in real estate for all types of markets. Whether low …

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