As old strategy becomes outdated and unsuitable to the new economic environment as a result of COVID-19, the change needed for further sustainable development is a challenge that most real estate developers have to overcome.
Despite the complicated development of the COVID-19 pandemic, the housing market in Ho Chi Minh City and Hanoi recorded encouraging results in the first half of 2021.
In the primary market, the number of successful transactions rose by 28 per cent in HCM City and 20 per cent in Hanoi. In the reporting period, more than 7,900 newly-built apartments were sold in Hanoi, 10 per cent higher than the same period last year, according to the latest data from CBRE Vietnam.
The results proved the market was recovering. Both developers and homebuyers had adapted well to the new market conditions, CBRE said.
Mr. Jason Turnbull, Deputy Managing Director cum CFO of Masterise Homes, spoke at the CBRE Forum 2021.
He said the pandemic had been motivating industry insiders to have better ways to adapt and develop.
"Vietnamese developers are facing two choices: change or die. Outdated strategies are no longer relevant during the pandemic, but adaptation and innovation are among the most difficult challenges most real estate developers have to solve."
Plan for sustainable development
The impact of the COVID-19 pandemic forced local realtors to develop strategies to adapt to the new business environment, Turnbull said.
“As soon as COVID-19 was reported in Vietnam, Masterise Homes developed an adaptation plan creating a roadmap for both internal operations and strategy to coordinate with partners and customers. Hence, our business activities have been carried out as planned,” said Turnbull.
Developing branded residences, a type of property that is resilient against economic downturns and crises, including the COVID-19 pandemic, is among the strategies helping Masterise Homes stay adaptive in the “new normal”.
Despite the epidemic, a luxury penthouse atop One Hyde Park is still being offered for sale for $247 million. Source: C&C
With a better ability to stay resilient against crisis, branded residences have been among the priorities of Masterise Homes’ business development. Several branded apartment projects have been under construction in Hanoi and Ho Chi Minh City. History has proven that through many downturns in the global economy, the real estate segment still retained its sustainable values.
The COVID-19 pandemic cost the global economy nearly $4 trillion, the equivalent to 4.5 per cent of global GDP in 2020. However, the branded residences segment maintained a sustainable growth rate with over a hundred new projects put into operation in the past year.
According to a survey conducted by Knight Frank in 2020, the price of prime properties in major cities around the world increased, higher than expected. The Global Development Report 2020 also stated that the COVID-19 pandemic has highlighted the advantages of branded residences.
“With premium standards of hygiene, safety, branded residences should always have a sustainable value which is the resilience against all of the crisis,” according to Mr. Jason Turnbull.
Moreover, as Work From Home is forecast to continue even after the pandemic is over, people tend to invest in a better home with facilities to work remotely. A house then is not only a place to live but also a well-equipped place to work.
Digitalize property sales
One of the most notable trends of the real estate market is the adaptation to the “new normal” and new sales solutions through the online platform have been introduced, according to Masterise Homes.
In the first half of 2021, the local property market launched many outstanding solutions that enabled customers to easily buy a new house, providing the optimal relocation experience. With the Home For Home solution, customers can shorten their journey from buying and to moving into a new apartment. The pandemic has also stimulated the development of cashless transactions in property exchange through live streaming. Mobile phone applications are integrating the entire process of real estate transactions and have also been popular.
Masterise Homes' upcoming mobile home buying app
Facing social distancing and travel restrictions, Masterise Homes plans to launch a new mobile application, allowing customers who want to buy houses to get information about the project and work with sales executives from afar. The application enables buyers to choose an apartment, make a reservation, deposit, and use electronic signatures for the contract and proceeding payment.
Many real estate developers are urgently entering a period of digital transformation to adapt to changes in customer behaviour. All players in this industry need to meet higher standards as health and safety become paramount in the new normal.