According to real estate expert Tran Minh, when the State Bank has a policy of lowering interest rates for a long time, the money of people and businesses deposited in the bank will tend to “flow” out.
Channels to catch this cheap cash flow can be production and business, investment in import and export or securities and partly in real estate. “This cheap cash flow makes the real estate market, especially the Hanoi market, grow rapidly,” Mr. Minh emphasized.
However, according to him, this real estate “wave” will take place in a short time. Within half a year, real estate increased by 30-50%, especially old apartments and houses in alleys. Because compared to the opening prices of apartment projects and new low-rise projects, they are very high.
“Speculators like to put money into old projects. In fact, old apartment prices have increased sharply because the previous selling price of this project was low,” he shared.
Commenting on this real estate “wave” in Hanoi, he said that this “wave” has a short period and has not spread to other regions. Therefore, many people will not feel it before the “wave” has ended.
Also according to Mr. Minh, the current real estate “wave” is shorter and different from the “wave” of 2019-2021. Because the previous real estate “wave” was the accumulation process of people and the stable development of the economy.
According to him, the general formula for creating real estate “waves” this time still comes from speculators (people with large amounts of money, or large brokerage floors). This “wave” takes place in a small area and small group of people.
He gave the example that in a market with 100 real estate properties, speculators would buy and resell about 20-30 properties to create liquidity, and the price would immediately increase. If money comes in and shocks the market, real estate holders, seeing prices increasing day by day, will be afraid to sell. When creating a buzz, speculators will attract outsiders to “jump” into the market.
“Currently, the psychology of people with bank deposits is very fluctuating because interest rates are low for a long time and they immediately drop their money. At this time, speculators will sell and earn profits. After that, speculators will Only keeping the profits and continuing to spend money to find new markets and low price areas can attract other speculators,” Mr. Minh analyzed.