Businesses need to grasp the opportunity to transform themselves.

Real estate has passed the "bottom"

Economist, Dr. Nguyen Minh Phong said that in the first months of 2023, the real estate market stagnated due to extremely limited supply in most types of real estate.

“The number of projects for sale is very small, of which the number of projects eligible to sell future housing in the first 6 months of the year is only 30 projects with more than 4,500 apartments, only about 37.5% compared to the last 6 months of 2022,” Mr. Phong informed.

Real Estate - Real Estate 2024: Businesses need to grasp the opportunity to transform — The real estate market in 2024 still faces many remaining difficulties.

In addition, the volume of real estate transactions only reached about 36-41% compared to the end of 2022, depending on the segment, leading to negative growth in production and consumption of most major construction materials, with many months reaching double digits.

Citing data from the Ministry of Construction, in the first 10 months of 2023, the volume of real estate transactions decreased by 50% compared to the same period in 2022. By the end of September 2023, real estate inventories were very large, with a total value of up to VND 301,600 billion, an increase of 5% over the same period. Solutions are needed to remove and return this huge amount of inventory to the real estate market to both create cash flow, create liquidity, remove difficulties for businesses and increase housing supply for the market.

However, with the close direction of the Government and the efforts of the Central and local ministries and branches, the socio-economic situation of the whole country and the construction industry has had positive changes in the last months of the year.

Ms. Pham Thi Mien, Deputy Head of Market Research and Investment Promotion Consulting Department, Vietnam Real Estate Brokers Association, said that the total transactions in the 4 quarters of 2023 were 2,700; 3,700; 5,778; 5,710 products, respectively. In the 4th quarter of 2023, the market also recorded the "return" of a number of real estate businesses and brokers.

Total transactions for the whole year of 2023 will reach 18,600 products, equivalent to 18,900 products in 2022, but only 17% compared to 2018.

“The improvement in absorption rate is due to three main factors, mainly due to customers/investors being less pessimistic, investors being more aggressive with price reductions and applying a series of preferential policies. In addition, some projects are eligible to reopen for sale, increasing the choice for customers/investors,” Ms. Mien added.

Businesses need to understand the times and operate in a "slow but steady" manner.

Although there have been positive signals in the market at the end of 2023, the real estate market in 2024 is assessed to still face many difficulties such as the global economic recession and slow growth affecting the country's economy.

Sharing more about this issue, Mr. Le Dinh Chung, Member of the Market Research Working Group, Vietnam Real Estate Brokers Association, said that real estate credit as of December 20 had increased by 10.85% compared to the end of 2022. Towards the end of the year, the speed of credit disbursement accelerated, in just 20 days of December 2023, credit growth increased by 1.7%, equivalent to about 202,700 billion VND pumped into the economy. However, the weak cash flow in the market led to a lack of improvement in purchasing power.

In addition, the State Bank continues to implement the policy of reducing interest rates. Lending interest rates have continuously decreased sharply, approaching the record low interest rates during the Covid-19 period. However, the tightening lending conditions make it difficult for investors and home buyers to access credit capital, reducing the already weak demand for capital.

On the other hand, problems in the implementation process, especially related to site clearance, have caused many projects to be unfinished and behind schedule, causing waste of land resources and "disgraceful" urban appearance.

To survive and revive the real estate market, Mr. Chung believes that the whole system needs to join hands and contribute.

In particular, real estate enterprises themselves also need to continue restructuring their products, focusing on feasible projects that meet people's financial needs. Limit the development of products for investment, and prioritize the development of products for real housing needs.

Research more attractive and practical incentive policies for both customers/investors as well as real estate distributors and brokers. Streamline production processes, apply technology and solutions to reduce real estate prices.

Above all, operating in the direction of "slow but sure", clearly defining the spirit, 2024 is still a challenging year to overcome. For investors developing tourism and resort real estate projects, special attention should be paid to the operation management stage to ensure the feasibility of the rental exploitation plans of customers/investors.

“It is necessary to clearly define “joining hands to promote the market” as the main goal, then determine the profit goal,” Mr. Chung emphasized.

N.Giang

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