[NEWS] - What are the reasons for the increase in housing prices?

In recent years, real estate prices have increased continuously at an alarming rate. This makes it impossible for people who work their whole life to buy a house. The reason for the high housing prices in recent years is due to the current situation of land fever and credit tightening. 

The number 1 reason why house prices skyrocketed

Most real estate experts and real estate data sites agree that the number 1 reason for high house prices is the low housing supply in the past two years.

For example, in one of the world’s largest real estate markets the US, in the area near the Phoenix metro station at the end of 2019 (before the pandemic broke out), there were about 9,700 new homes for sale. By the end of 2021, the number of new homes for sale is only 4,500. 

Status of “Earth Fever”

The real estate industry says the only solution is to build more homes in the future. With a limited supply at the moment, it is difficult to prevent house prices from rising. At the same time, Real Estate experts said that the "land fever" has increased in recent times, which has made the ability to buy a house of people more and more difficult. Besides, the increase in land prices not in accordance with the real value is leading to the risk of depression for the economy and will affect the policy of low-cost housing development. Besides, the prolonged "fever" of land also negatively affects both the economy and the real estate business. It has a great impact on the activities of lending banks and financial institutions, and at the same time causes many consequences for other areas of production and business. 

Credit Tightening

The next reason for the increase in housing prices is due to the impact of credit tightening. Recently, some banks have announced to tighten credit for the real estate lending segment and along with it, an increase in interest rates. savings rate of commercial banks, this will make real estate businesses worry. It is these reasons that have caused the real estate market to boom much larger than normal, leading to a series of consequences behind, and one of which is the increase in housing prices. Along with the general trend, the real estate market is also gradually transforming digitally. Technology changes business forms and product types in the real estate market, becoming an inevitable trend. 

Real estate expert Tran Khanh Quang said that in 2022, investors should pay attention to the boundary between the peak of real estate and the real estate "bubble". Investors need to be very alert to regulate the investment pace to get a safe zone.” Investors need to be careful, combined with minimizing the use of financial leverage to borrow from a bank when the waiting time is too long, our surfing work will be limited because the interest increases but profit margin does not offset that amount of profit.

In order to solve the above dilemmas, Indochina Holdings is ready to offer useful advice to minimize risks for investors when real estate prices are skyrocketing. Indochina Holdings, we are always ready to accompany businesses to try our best to create opportunities and be a solid bridge for businesses. Become a member of Indochina Holdings, we are committed to bringing sustainable long-term values ​​in business and financial activities to member enterprises. 

Ngoc Duc