Real estate segments are showing a clear recovery in various localities.

Market overview

Despite remaining difficulties and challenges, the Vietnamese economy achieved outstanding growth in the first months of 2024, creating a foundation to strive to achieve and surpass the 2024 growth target set by the Government. This is a prerequisite for promoting a positive recovery in 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 and affordable housing, which were already "hot" and scarce, are becoming even more urgent in localities after a series of fires in "mini-apartments" and rental housing areas; land prices in many places are showing signs of "heating up"; and the attractiveness of industrial real estate is affirming its position in the market as FDI capital increases and attracts many investors...

In the second quarter of 2024 alone, the primary housing supply reached over 27,000 units, with nearly 20,000 new units offered for sale, three times the number in the first quarter of 2024. Selling prices across all housing segments, especially apartments, established a new price level and remained stable in the market during the second quarter.

Furthermore, the apartment price index continues its upward trend in major cities such as Hanoi , Ho Chi Minh City, and Da Nang. Specifically, from the end of 2023, the price growth rate of the Hanoi apartment market began to increase and surpassed that of the Ho Chi Minh City market. By the second quarter, the average primary apartment price in Hanoi was close to 60 million VND/m2. Compared to the second quarter of 2019, the primary apartment price in Hanoi recorded a 58% increase, 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 compared to the North and South markets.

According to Mr. Le Dinh Chung, Member of the Market Research Task Force (Vietnam Real Estate Market Assessment Institute, General Director of SGO Homes), along with the market recovery process, investor confidence is returning positively. In the context of a rapidly recovering market, the implementation of relevant laws such as the Housing Law, the Real Estate Business Law, and the amended Land Law, effective from August 1, 2024, to complete the legal framework for real estate, coupled with low bank lending interest rates, is attracting developers and investors back to the market.

This situation has led to an improvement in the absorption rate across all real estate segments. The primary real estate market has recorded 20,600 successful housing transactions since the beginning of the year, three times more than the same period in 2023. In the second quarter of 2024 alone, the market recorded over 14,400 successful transactions, 2.4 times higher than the first quarter, with demand for actual housing and investment increasing by approximately 30% compared to the previous quarter...

Before "D-Day"

According to Ms. Pham Mien, Deputy Director of the Vietnam Real Estate Market Research Institute, the recovery of the real estate market is still strongly differentiated across segments in different localities. In terms of segments, the apartment segment remains dominant, controlling market liquidity. The low-rise and land plot segments are also beginning to show positive signs of recovery, with some projects, mainly in the Central region, recording relatively good sales and transaction results.

Regionally, the real estate market in the North, from land plots and villas to apartments, continues to record growth and is poised for further acceleration. The Central region, including Da Nang , Nha Trang, and Nghe An, is beginning to see positive changes in the high-rise segment of the primary market and in cash-flow products of the secondary market. Meanwhile, the recovery process in the Southern market is uneven, with limited supply, mainly coming from subsequent sales phases of existing projects.

Regarding the implementation results of social housing projects, from 2021 to the present, the whole country has completed 75 projects, with a scale of 39,884 units, an increase of 3 projects and 1,756 units compared to the reporting date of 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 over 800 successful transactions. Transactions mainly come from developed provinces and cities associated with industrial development...

Vnrea's analysis indicates that the real estate market, before the relevant laws such as the Housing Law, the Real Estate Business Law, and the amended Land Law, which came into effect on August 1, 2024, was still waiting for the "bottlenecks" to be removed in order to truly recover. Once these laws take effect, the "waiting" mentality will be lifted, real estate businesses will begin the race to resolve the bottlenecks alongside state management agencies, developers will confidently supply goods, and investors will regain confidence.

Given market developments, Vnreaki recommends that state management agencies should quickly research and issue detailed guiding circulars and decrees so that laws can be implemented immediately in practice, ensuring that all relevant individuals and organizations understand the new legal framework correctly, fully, and promptly; improve the dissemination of legal knowledge by encouraging the organization of conferences, seminars, and programs to disseminate mechanisms and policies; and at the same time, urge ministries, sectors, 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 and Director of the BIDV Training and Research Institute, accelerating the official effective date of the three laws by more than 5 months compared to the regulations will actively contribute to promoting the recovery of the real estate market, resolving obstacles related to land valuation, land clearance, resettlement, and the implementation of the Social Housing Project, creating a foundation for the real estate market to develop in a safe, healthy, and sustainable direction.

Experts assert that, in order for the Vietnamese real estate market to become more transparent, it is necessary to: quickly and decisively resolve market barriers that have existed in the past; facilitate access to capital for businesses and investors; improve the minimum wage so that people have the opportunity to increase their income, thereby increasing demand; and attract investment to maintain and promote the industrial, commercial, and tourism-resort real estate segments.

The resurgence of the real estate market is the culmination of many positive factors under the guidance of the Government, ministries, localities, and the joint efforts of real estate businesses. Although these "bright spots" are not yet strong enough to cause a market "boom," they certainly create a foundation for development.

Industrial and commercial real estate is booming, while tourism and resort real estate shows promising signs.

Since the beginning of the year, industrial real estate has consistently maintained its leading position in the market, attracting significant interest from domestic and foreign investors, with 10 new industrial park investment projects receiving investment approval. Leading companies in the industrial real estate sector such as DIC Holdings, Phat Dat, Khang Dien, Ha Do, etc., are planning to strongly develop this segment. The commercial and office real estate segment continues to record positive developments, with a series of new office buildings being constructed with high-quality spaces and amenities, meeting EDGE, LEED, and WELL standards, and achieving occupancy rates above 60% in a short time after becoming operational due to the need for expansion and relocation to high-quality office buildings by businesses in the finance and technology sectors. Notably, the tourism and resort real estate segment showed more positive signs in Q2/2024 compared to Q1.

Source: https://doanhnghiepvn.vn/kinh-te/cac-phan-khuc-bat-dong-san-phuc-hoi-ro-net-tai-cac-dia-phuong/20240718040458470