The real estate market in 2019 faced numerous challenges right from the start of the year. Circular 36 regarding credit tightening by the State Bank became a significant obstacle, making capital inflows into this sector more restricted and stringent. This indirectly affected the truck market in late 2019, as the demand for transporting construction materials and real estate goods decreased.
The Overlapping Difficulties of the 2019 Real Estate Market and the Impact on Trucks
Following the hot growth in 2018, the real estate market encountered a strong review from regulatory authorities. The widespread inspection of projects in Ho Chi Minh City caused many projects to be “frozen,” notably 7 Novaland projects in January 2019. Many other real estate businesses were also affected, with projects being halted or delayed due to procedural issues. The supply of products for sale decreased sharply, estimated to be 3-4 times lower compared to 2018.
Credit tightening policies and legal reviews are considered the two main difficulties significantly impacting the real estate market. The scarcity of new project supply and the sharp decline in the liquidity of real estate products. These difficulties spilled over into the truck market, as transportation demand decreased, leading to a surplus of trucks and fierce price competition for freight rates.
Two Perspectives on the Real Estate Market and the Impact on Trucks
There were two schools of thought regarding the real estate market at that time. Some opinions suggested that limiting supply would lead to hoarding and increased speculation, pushing real estate prices up, creating a bubble. This could temporarily increase the demand for trucks to transport stockpiled goods.
Another viewpoint argued that the real estate market was imbalanced, with some segments having excess supply while others faced severe shortages. A genuine decrease in real housing demand could push the market into a state of compounded difficulties. The truck market would also be negatively affected by this imbalance.
Rising Interest Rates and Questions About the Direction of the Truck Market in Late 2019
Rising interest rates for real estate loans were also a cause for concern. For the truck market, higher interest rates on truck loans would reduce purchasing power and create difficulties for transportation businesses. So, where would the truck market go in late 2019?
Optimistic Forecasts and Hopes for the Truck Market
Despite the concerns, the real estate market in the last 4 months of 2019 was still forecast to be optimistic. Many experts believed that a real estate bubble would not occur. The government’s review would contribute to a market purification, reducing risks. The truck market could benefit from this stability.
Demand for housing in the C segment remained very high in major cities and new administrative-economic zones. This could create transportation demand for trucks. The real estate market in the last months of 2019 was expected to continue to develop steadily, especially in satellite cities of Ho Chi Minh City.
Economic experts also offered positive assessments of the real estate market in late 2019 and early 2020. Easing difficulties in project approval and licensing would help increase supply, meeting market demand. The truck market would also benefit from the recovery of real estate. Despite many difficulties, real estate remained a reliable and good investment channel. The development of real estate would drive the development of the truck market.
