Under the negative impact of the Covid-19 pandemic, the amount of FDI invested in Vietnam’s real estate market in the first 7 months of 2021 only reached 1.17 billion USD, which is a decrease of more than 1.6 billion USD, equivalent to 1.17 billion USD. equivalent to 58% over the same period last year.
Investment capital in new projects has been cut, causing new supply in the market to become scarce. However, also because of the impact of the pandemic, a large amount of idle money has been poured into the market by individual investors, causing a galloping price increase in recent times. And this, is a trend that is happening globally, not just in Vietnam. Soaring housing prices in many parts of the world are spooking buyers, even as we’re experiencing the worst recession since the Great Depression nearly a century ago. This not only affects investors, but also especially affects low-income people, making them almost no longer have the opportunity to own real estate.
One of the most effective solutions to this situation is the Real Estate securitization model, a viable form of capital mobilization to ensure capital supply for market development. This is not a new idea, however, over the years, this form of capital mobilization has not been able to develop due to barriers, market limitations and policy mechanisms. However, this has completely changed with the development of blockchain technology.
To implement this model, the project investor connects with a technology platform investment intermediary to tokenize (tokenize) into NFTs (Non-fungible tokens) and share the project. projects into investment packages valued at $50. From there, users will create an account, choose the project they want to invest in, deposit money through the system and trade.
It is known that in the United States, this technology has begun to be put to the test with a race on the launch schedule between pioneers in this field such as Fluidity, Gretin or Propellr Securities. According to the Ho Chi Minh City Real Estate Association (HoREA), a luxury building worth 30 million USD in Ho Chi Minh City. New York, USA has been offered for sale in this form: Digital Tokens representing part of the building value will be traded like shares and any investor in the world can own own a certain percentage corresponding to the amount they buy Tokens.
With this form of Real Estate securitization, investors can approach the project with a capital flow many times lower than the property value and invest with a smaller amount of capital. At the same time, they can buy and sell this investment again and again in the form of an online transfer, as freely as buying and selling shares on the stock market. According to research by Gretin Group, a company based in Delaware, USA, it is Asia, where the population density is dense, that is the most suitable place to pilot this model. At the same time, they are also actively looking for partners who are local real estate businesses to pilot application in a few Asian countries, including Vietnam.
“This is a completely new investment activity that has the potential to replace traditional real estate investment methods that have gradually become obsolete. Instead of having to worry about running out of time to pay a bank loan, when implementing the code. Asset commoditization by the above method will mobilize a large capital of the society through investors to complete the construction of the project”, the HOREA representative emphasized.
Le Hoang Chau, chairman HOREA also added that the Association will study the proposed amendment and supplementing the Law on Securities of the securitization of real estate, investment funds and real estate investment fund trust estate produce.