Encouraged by high profits, more investors jump into property market
The number of newly set up businesses in the real estate sector in the first four months of the year increased sharply compared with the same period last year.
In addition, giants in other business fields have also jumped on the bandwagon.
More than 1,390 new businesses were registered in the real estate sector in the first four months of the year, according to MPI, an increase of 66 percent over the first four months of 2016, while registered investment capital soared by 50 percent.
Analysts said more investors pour money into the property market as they are encouraged by the high profits reported by property firms.
Dat Xanh (DXG), for example, reported net turnover of VND586 billion in Q1 2017, a sharp increase of 86 percent over the same period last year, and post-tax profit of VND151.6 billion, or 5.2 times higher.
Meanwhile, Thu Duc House (TDH), reported net revenue from sales and services at VND191.3 billion, up by 152.9 percent. Its post-tax turnover reached VND41.5 billion in Q1, three times higher than the same period last year.
Prior to that, TDH gained a high growth rate in 2016, when it for the first time had turnover of over VND1 trillion.
Following prosperity in 2016 and the first months of 2017, real estate firms have set high business targets for 2017. The Hoa Binh Construction & Real Estate JSC plans to obtain turnover of VND16 trillion and post-tax profit of VND828 billion this year, higher than the VND568 billion in 2016, a 586 percent increase compared to 2015.
The promising real estate market has attracted big players in other business fields.
CII, a big construction firm with many BT (build, transfer) projects, has joined the real estate market with the decision to set up CII Land to realize investments in two high-end real estate projects in the Thu Thiem new urban area.
Coteccons (CTD), another construction firm, has also set up a subsidiary specializing in real estate business. Convestcons, the subsidiary, with charter capital of VND26 billion, will act as broker and trader.
CTD’s director Vu Duy Lam said the real estate market does not always prosper, so CTD needs to grab the opportunities now when the market is warm.
The real estate market is so attractive that it has lured seafood producers as well.
Saigon Seafood Import/Export JSC has announced it would pour VND250 billion into a 20-storey complex in Tan Binh district.
At a shareholders’ meeting held days ago, the Hung Vuong Seafood Company said the company now owns a land fund large enough to prepare for the property sector this year.
M. Ha, VNN