TLDR;
This video discusses the potential new crisis in real estate and finance within the evolving Vietnamese economy. It highlights the shift in economic development focus from infrastructure investment in developing countries like Vietnam to technology and finance in developed nations. The video suggests that the upcoming crisis in Vietnam won't necessarily involve asset collapse but rather a deeper issue of wealth disparity and affordability, with many unable to afford homes in major urban centres due to increasing property values and the potential implementation of property taxes.
- Developed countries focus on technology and finance, while developing countries focus on infrastructure.
- The upcoming crisis in Vietnam is more about wealth disparity and affordability than asset collapse.
- The implementation of property taxes could exacerbate the issue of home affordability.
Introduction [0:00]
The video introduces a discussion about the new crisis in real estate and finance in Vietnam's evolving economy. It references previous videos discussing macroeconomics, interest rates, and public investment, and addresses comments from viewers anticipating lower property prices due to rising interest rates. The speaker cautions against oversimplifying economic crises, noting that major crises like the one in 2008 can have prolonged effects, lasting until 2014 or 2015.
Economic Development Strategies [2:47]
The discussion contrasts the development strategies of developing and developed nations. Developing countries like Vietnam primarily focus on infrastructure development through public investment. Developed countries, having already established infrastructure, concentrate on technology, finance, and investment in developing nations. Examples of technological advancements include blockchain, AI, and robotics, with the latter potentially reaching a capitalisation of $500,000 billion.
Vietnam's Infrastructure Development [4:43]
Vietnam is investing heavily in public infrastructure projects, including ring roads, bridges, high-speed rail, seaports, logistics, and airport expansions. This focus on infrastructure distinguishes Vietnam from developed countries that have already completed their infrastructure development. The speaker suggests that this infrastructure development will drive economic growth and make it difficult for property prices to fall.
The Impending Crisis: Wealth Disparity [8:18]
The speaker suggests that the upcoming crisis in Vietnam will not be about assets collapsing in value. Instead, it will be a crisis of wealth disparity, where the gap between the rich and poor widens. The completion of infrastructure projects will lead to increased money circulation, benefiting those who invest and accumulate assets, while others may struggle to keep up. This disparity could result in many people being unable to afford homes, especially in major urban centres.
The Reality of Home Ownership [11:58]
The video highlights the potential for many people to be unable to buy or keep their homes in the future. Drawing parallels with countries like South Korea, the speaker notes that rapid development can lead to significant wealth gaps. While basic needs like food may be affordable, property ownership, particularly in central urban areas, will become increasingly expensive.
Property Taxes and Inheritance [14:27]
The speaker discusses property taxes and inheritance taxes, noting that in some Western countries, property owners pay annual taxes ranging from 1% to 3% of the property value, along with other maintenance costs. They argue against implementing such taxes in Vietnam, as they could make it difficult for families to pass on property to future generations. The speaker emphasises that true ownership means having the right to dispose of and bequeath assets freely.
The True Meaning of "Real Estate" [19:25]
The speaker explores the etymology of "real estate," revealing that "real" comes from "royal," meaning "property of the royal family." This highlights the historical context of property ownership and taxation. The speaker reiterates the importance of maintaining a system where Vietnamese citizens can own property without the burden of excessive taxes, ensuring they can pass it on to their children.
The Future of Vietnam's Real Estate Market [20:58]
The speaker reiterates that the coming crisis is not about cheap assets but about who can accumulate and retain assets. Vietnam is in the third year of a property cycle, with massive public investment transforming the country. The speaker questions the likelihood of property prices falling given the scale of infrastructure development. They predict a crisis where many cannot afford to buy homes, especially in urban centres, and some may lose their homes due to excessive debt.
Long-Term Vision and Urban Planning [25:38]
The speaker encourages viewers to adopt a long-term perspective, recognising the transformative impact of infrastructure projects like high-speed rail and ring roads. They highlight the potential for these developments to reshape urban areas and improve connectivity. The speaker also discusses urban planning initiatives, such as relocating populations to large-scale projects like Vinhomes Olympic to reduce inner-city congestion and pollution.
Investment and Development [30:35]
The speaker acknowledges the difficulty in making short-term predictions but suggests that the influx of new housing supply in major cities like Hanoi will aim to moderate prices and redistribute population. They emphasise that investing in real estate is essentially betting on the country's overall development and economic growth. The speaker concludes by encouraging viewers to stay informed and consider long-term investment strategies.
