Upbeat market outlook boosts real estate stocks

November 06, 2021 - 08:27
Real estate stocks have surged recently as realty is forecast to be one of industries that will have the most positive growth prospects towards the end of the year.


A residential area in Hà Nội. VNA/VNS Photo

 HÀ NỘI — Real estate stocks have surged recently as realty is forecast to be one of the industries that will have the most positive growth prospects towards the end of the year.

In the past week, many real estate stocks saw strong increases in both market price and liquidity. In the group of blue-chip shares, VHM share of Vinhomes Joint Stock Company was the brightest name when it recorded the sixth consecutive increase in the week with a total rise of 9.6 per cent.

Vingroup Corporation’s share VIC also maintained the uptrend, closing the week at VNĐ95,800 per share, up 4.36 per cent compared to the previous week.

Thanks to the recent surge, VHM and VIC are currently the two largest stocks on Ho Chi Minh Stock Exchange (HOSE), accounting for 6.77 per cent and 6.63 per cent of the exchange’s value, respectively.

The strong uptrend was also seen in other real estate shares in VN30, such as NVL and PDR. KDH of Khang Điền House Trading and Investment Joint Stock Company hit a record high, closing the week at VNĐ51,000 per share, up nearly 12 per cent in just a week.

In the midcap group, DIG, HDC, NLG and NTL shares also attracted strong cash flow on HOSE, causing them to hit the highest market prices ever.

DIG share of Construction Investment Development Joint Stock Corporation increased by 19 per cent in the past week alone and more than 64 per cent in October 2021. The shares closed the week at VNĐ50,900, hitting a record high after 12 years of listing on HOSE.

HDC, of Bà Rịa-Vũng Tàu Housing Development Joint Stock Company, also maintained a positive move, up more than 12 per cent in the past week, and nearly 45 per cent last month. The shares closed the week at VNĐ106,600 – also its highest price level.

Not only bluechips and midcaps in HOSE, small-cap real estate stocks on the Hà Nội Stock Exchange and the Unlisted Public Company Market (UPCoM) also had very positive movements with many of them reaching ceiling prices in recent sessions.

Real estate stocks have attracted cash flow since the beginning of October 2021, when HCM City and many cities and provinces officially reopened their economies after a prolonged period of applying social distancing to prevent the pandemic.

Statistics showed the VNREAL index, which represents the Vietnamese real estate industry, had a strong growth of nearly 13 per cent last month, against a decrease of nearly 3 per cent in September 2021.

Phạm Lâm, vice president of Vietnam Real Estate Brokers Association, said after a decline in the first three quarters of this year, many customers have resumed investment in the real estate market since October 2021.

Meanwhile, the real estate market has been attractive as large real estate developers have offered many favorable payment and interest rate incentive programmes to lure buyers.

The move therefore brings optimistic signals to the real estate market in the last quarter of this year.

Financial expert Cấn Văn Lực said the COVID-19 pandemic's impacts on the economy and the real estate industry were different from previous economic crises. Previously, when the economy faced difficulties, the demand dropped immediately. However, in this pandemic, the real estate market still developed well.

Due to low interest rates in both Việt Nam and the world, cheap cash has been flowing significantly into the real estate market.

Besides, the real estate market is also benefiting from the Government’s plans to develop infrastructure and boost public investment.

In reports released recently, securities companies forecast real estate would be one of the industries with the most positive growth prospects in the year-end period. They explained besides favourable macro conditions thanks to the Government’s plans on infrastructure development in the 2021-25 period, the fourth quarter of a year is usually the season to record revenue from real estate projects. — VNS