According to Nguyen Minh Phong from the Hanoi Socio-Economic Institute, a CPI at 5% provides ideal conditions for the real estate market to operate well. Phong said that high inflation has direct and indirect impacts on real estate investments.
First, high inflation makes input expenses higher. Second, high inflation slows down the execution of real estate projects, thus reducing the supply on the market. Third, high inflation makes the capital inflow into the real estate market decrease, while the market needs huge capital sources.
Phan Thi Cuc, Chairwoman of the Vietnam Real Estate Club, agrees with Phong, saying that the real estate market developed rapidly last year, but has become quiet as a result of the high inflation rate.
