The report also pointed out that the total supply of affordable apartments decreased by 98% compared to 2019; apartments priced around VND25 million/m2 are only available in a few commercial housing projects in areas far from the center of centrally-run cities or in class I cities or below.
In the second quarter of 2023, the country recorded more than 200 housing projects for sale, most of which are projects in the next phases. Accordingly, the supply to the market is about 20,000 products. In terms of supply structure, the majority are still low-rise products and land plots, accounting for 53% of the total housing supply nationwide. New supply is mainly concentrated in the Southwest market, accounting for 44% of the country.
In particular, the mid-range apartment segment with prices ranging from VND25 - 50 million/m2 and high-end segment with prices ranging from VND50 - 80 million/m2, continued to lead the supply of new apartments in the quarter, accounting for 53% and 34% of the total supply of apartments for sale, respectively.
Affordable apartments priced under 25 million VND/m2 have disappeared from the market. (Illustration photo)
In terms of consumption, in the second quarter, there were about 3,704 transactions, approximately 18% of the total newly launched supply, although only 60% compared to the same period in 2022 and an increase of more than 30% compared to the first quarter.
VARS assessed that the transaction volume has slightly recovered due to a series of drastic support measures from the Government and the move to reduce home loan interest rates by banks. Of which, 80% of the transaction volume is apartments with “clean” legal status, developed by reputable investors. Demand arises from both customers buying for real housing needs and customers buying for investment needs.
“ The transaction volume can only increase if the market supply improves with more diverse products. The recovery of residential land transactions among the people is quite weak and does not occur simultaneously. The transaction volume recorded in the low-rise segment, land plots, luxury apartments, high-end apartments, mid-range apartments, and affordable apartments accounts for 18%; 6%; 40%; 35% and 1% respectively ,” VARS informed.
According to VARS, in the last quarter, investors continued to apply many preferential policies for both home buyers and distribution agents such as pre-paying marketing and communication costs for agents, reducing the amount of deposit received, and extending the payment period. Notably, the policy of receiving the house early only requires payment of 30-40% of the value, while previously it had to be 95%. In addition, investors also increased discounts and attractive payment methods, especially for customers using cash. Some apartment projects developed by reputable investors, introduced to the market with breakthrough preferential policies, recorded a large number of bookings, "lighting up the picture" of the market.
Apartment prices remain high
VARS said that apartment prices in major cities continued to be high because newly opened projects were mainly high-end projects, averaging VND52 million/m2 in Hanoi, up 1.46% compared to the first quarter and VND67 million/m2 in Ho Chi Minh City, down 4.6%.
Meanwhile, the price of secondary residential real estate, especially land plots for the public, is differentiated by segment. The product line serving real demand, priced under VND2 billion/product, recorded a price increase of about 5-7% compared to the previous quarter, with some areas recording hundreds of successful transactions. The apartment segment continued to increase with soaring demand for renting and buying, especially in the low-end and mid-range segments.
While high-end products and investment prices continue to have downward adjustments, 20-30% compared to the peak with slow liquidity, this is still a "profit-cutting" price when buying directly from the investor for medium and long-term investors.
Regarding the housing market, VARS said that supply will gradually improve and become more evident from the third quarter, with an expected 28,000 products in the third quarter and over 30,000 products in the fourth quarter being introduced to the market. In addition, the market will gradually stabilize, along with strengthened customer confidence, and improved supply will help increase demand for residential real estate.
In terms of selling prices, the mid-range apartment segment is expected to continue to increase slightly, while the high-end segment tends to remain stable but is more comfortable thanks to preferential policies from investors. The land and villa/townhouse/shophouse segments in the secondary market continue to decrease slightly, but will gradually stabilize by the end of the third quarter.
Regarding transactions, VARS believes that the growth momentum will continue and impressive results will likely be achieved in the middle or end of the fourth quarter, when supply improves and customer confidence in the market recovers.
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