Long-term capital investment is required for the market to develop more sustainably and creatively. The right investment of 1 dong of capital will create resilience for the economy is the opinion of economist Huynh Phuoc Nghia, University of Economics Ho Chi Minh City.
Mr. Nghia shared his views at the seminar " Opening up capital for the real estate market " organized by Thanh Nien Newspaper and the Green Economy Institute on the morning of June 7.
Mr. Nghia said: In the past 6 months, we have talked about capital for real estate a lot. Because real estate has a fundamental role as a special product and market, it is necessary to ensure development according to development goals such as urbanization. This market is essentially a "capital market" game - it needs long-term capital. When there is a problem with capital, it will create a lot of problems with economic development in general.
Mr. Nghia concluded: " Capital intensive has the specificity of the real estate industry , it needs long-term capital for at least 10-15 years to produce "corn and potatoes". Vietnam needs to build more on the "capital market" mindset for real estate. Just raising capital, building and then selling to collect money, real estate lacks creativity.
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Economist Huynh Phuoc Nghia, University of Economics Ho Chi Minh City
Mr. Nghia said, he has met many real estate developers who prefer to invest in small projects with an area of 1-2 hectares because it is easy to raise capital and sell quickly to recover capital to invest in new projects. As for large-scale projects up to 500-600 hectares, there are many difficulties in raising capital and selling to recover investment capital. Invest in it and stay there. So many investors only like to do small projects and the real estate market is very lack of creativity and unsustainable development. For the market to develop creatively and sustainably, it is necessary to prioritize and balance capital. Real estate is a fundamental market for markets, so it needs a stable and long-term investment source to create opportunities for all industries.
The more important issue when real estate is also specific is associated with property value. Therefore, real estate plays an important role in economic development. There are countries where the real estate market contributes from 8-10% to the economy, with many developing countries this proportion is even higher. Real estate is also attractive to FDI and especially industrial real estate. FDI must be attracted to develop the economy because it creates a lot of jobs, develops industry, attracts experts, develops creativity, starts a business... Studies show that investing 1 USD in real estate will generate 1.5 - 2 USD for the economy because real estate is an output product for 200 - 250 other industries. Therefore, real estate has a special role in Vietnam's economy, the market is attractive in terms of capital attraction. The right investment of 1 dong of capital will create a rebound for the economy. Capital investment in real estate is also a solution to contribute to economic recovery due to the congestion caused by Covid-19 in the past 2 years.
Expert Nghia summarizes: Real estate is a related driving force for other industries. Second, real estate is a major platform for attracting FDI and industrial development, absorbing technology and creativity. Therefore, it is necessary to prioritize policies for the overall economic development strategy. Real estate should be seen as an asset market, as an incentive and development engine. The principle of real estate development requires a capital market, which means long-term capital is needed, short-term capital is very difficult to develop.
By Thanhnien.com.vn