Market Overview
Despite many difficulties and challenges, the Vietnamese economy in the first months of 2024 still achieved outstanding growth results, creating a foundation to strive to achieve and exceed the growth target for 2024 according to the Government's target. This is a prerequisite to promote the positive recovery of the real estate market, leading the activities of more than 40 related economic sectors.
The Vietnam Real Estate Market Research Institute analyzed that real estate segments such as: Social housing, affordable housing, which are already "hot", are scarce, becoming more urgent in localities after a series of fires in "mini apartments", boarding houses; land in many places is showing signs of "heating up"; the attractiveness of industrial real estate affirms its position in the market when FDI capital is increasing and attracting many investors to invest...
In the second quarter of 2024 alone, the primary housing supply reached more than 27,000 products, with nearly 20,000 new products offered for sale, 3 times higher than in the first quarter of 2024. The selling prices of housing segments, especially the apartment segment in the second quarter, established a new price level and remained stable in the market.
In addition, the apartment price index continues to maintain an upward trend in major cities of Hanoi, Ho Chi Minh City, and Da Nang. Specifically, since the end of 2023, the growth rate of the Hanoi apartment market has begun to increase and surpassed the price increase of the Ho Chi Minh City market. By the second quarter, the average selling price of primary apartments in Hanoi was close to 60 million VND/m2. Compared to the price in the second quarter of 2019, the selling price of primary apartments in Hanoi recorded an increase of 58%, more than double the increase rate (27%) of the Ho Chi Minh City market, while the Da Nang apartment market recorded a lower price growth rate than the two markets in the North and South.
According to Mr. Le Dinh Chung, Member of the Market Research Working Group (Vietnam Real Estate Market Research and Evaluation Institute, General Director of SGO Homes), along with the market recovery process, investor confidence is returning positively. In the context of the market recovering rapidly, receiving laws related to the real estate market such as the Housing Law, the Real Estate Business Law, the amended Land Law taking effect from August 1, 2024 to complete the real estate legal corridor, combined with low bank lending interest rates... are attracting investors to return to the market.
The above reality has helped the absorption rate of all real estate segments improve. The primary real estate market has recorded 20,600 successful housing products since the beginning of the year, 3 times higher than the same period in 2023. In the second quarter of 2024 alone, the market recorded more than 14,400 successful transactions, 2.4 times higher than the first quarter, with real housing demand and investment demand increasing by about 30% compared to the previous quarter...
Before "G" hour
Ms. Pham Mien, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute, commented that the recovery of the real estate market is still strongly differentiated between segments in different localities. In terms of segments, the apartment segment is still the dominant segment, "dominating" market liquidity. The low-rise and land segments are also starting to "kindle" positive recovery signals when some projects, mainly in the Central region, have recorded quite good sales and transfer transaction results.
In terms of region, the real estate market in the North, from the land, villa, apartment segments... continues to record growth results, ready to accelerate. The Central region, including the markets of Da Nang, Nha Trang, Nghe An... has begun to record positive changes in the high-rise segment in the primary market and cash flow products in the secondary market. Meanwhile, the recovery process in the Southern market is showing unevenness, with a small supply, mainly coming from the next sales phase of old projects.
Regarding the results of implementing social housing projects, from 2021 to now, the whole country has completed 75 projects, with a scale of 39,884 units, an increase of 3 projects, 1,756 units compared to the reporting time on March 15, 2024, but only reaching 9.3% of the 2021-2025 plan. Transactions in the social housing segment have improved, but not significantly, with a low absorption rate of about 40%, with more than 800 successful transactions. Transactions still mainly come from developed provinces and cities associated with industrial development...
Vnrea analyzed that the real estate market, before the related laws such as the Housing Law, the Real Estate Business Law, the revised Land Law, which will take effect from August 1, 2024, are still waiting for the "bottlenecks" to be removed to truly "recover". When the laws come into effect, the "waiting" mentality will be removed, real estate businesses will start the race to remove the bottlenecks with State management agencies and investors will confidently supply goods, and investors will have confidence again.
Faced with market developments, Vnrea recommends that State management agencies should promptly research and issue detailed Circulars and Decrees so that laws can be immediately implemented in practice, ensuring that all individuals and organizations involved have a correct, sufficient and timely grasp of the new legal corridor; it is necessary to improve the dissemination of legal knowledge through encouraging the organization of conferences, seminars, and programs to disseminate mechanisms and policies; at the same time, urge ministries, branches and localities to ensure that no legal gaps or loopholes are created during the implementation process.
According to Dr. Can Van Luc, Chief Economist of BIDV, Director of BIDV Training and Research Institute, the acceleration of the official effective date of the three Laws by 5 months compared to the regulations has actively contributed to promoting the recovery of the real estate market, removing obstacles related to land valuation, site clearance, resettlement, implementation of the Social Housing Project, creating a foundation for the real estate market to develop in a safe, healthy and sustainable direction.
Experts affirm that in order to open up the Vietnamese real estate market, it is necessary to: Quickly and completely resolve recent market barriers; open up opportunities for businesses and investors to access capital sources; improve the minimum wage so that people have the opportunity to increase their income, thereby increasing demand; attract investment flows to maintain and promote the industrial, commercial and resort real estate segments.
The real estate market is vibrant again, the crystallization of many strengths under the direction of the Government, ministries, branches, localities and the cooperation of real estate businesses. Although the "bright spots" are not strong enough to help the market "explode", they certainly create the premise for development.
Industrial and commercial real estate is "bustling", resort real estate has bright signals
Since the beginning of the year, industrial real estate has continuously maintained its leading segment in the market, attracting great attention from domestic and foreign investors, with 10 new projects investing in industrial parks having been approved for investment. Leading enterprises in the industrial real estate sector such as DIC Holdings, Phat Dat, Khang Dien, Ha Do... are planning to strongly develop this segment. The commercial - office real estate segment continues to record positive changes, with a series of new office buildings being invested in and built with high-quality space and utilities, meeting EDGE, LEED, WELL standards... and achieving an occupancy rate of over 60% in a short time of operation due to the need to expand scale and shift to high-quality office buildings of enterprises in the financial and technology sectors. In particular, the tourism and resort real estate segment has shown more positive signs in the second quarter of 2024 compared to the first quarter.
Source: https://doanhnghiepvn.vn/kinh-te/cac-phan-khuc-bat-dong-san-phuc-hoi-ro-net-tai-cac-dia-phuong/20240718040458470
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