The indices are still at the “bottom” zone.
According to the real estate market research report for the third quarter of 2023 recently released by Batdongsan.com.vn, the level of interest in low-rise housing types in big cities such as Hanoi and Ho Chi Minh City is seriously declining.
Specifically, searches for townhouses decreased by 52%, adjacent villas decreased by 48% and private houses decreased by 42% compared to the period of October 2022. Searches for townhouses in Ho Chi Minh City also decreased by nearly 70% while townhouses in Hanoi also decreased by nearly 80% compared to the same period in 2022.
Similarly, research data from other research units also shows that liquidity of this type is still at the "bottom" and shows no signs of recovery.
For example, according to Savills Vietnam, in the third quarter of 2023, Ho Chi Minh City had about 766 low-rise houses for sale, with only 64 successful transactions, the lowest since 2018, down 43% quarter-on-quarter and 82% year-on-year. Thus, the corresponding absorption rate was only 8%.
According to Cushman & Wakefield, in the first 9 months of 2023, the Ho Chi Minh City market had about 448 new townhouses offered for sale. However, the consumption rate decreased by 74% compared to the same period in 2022.
Poor liquidity of low-rise housing has caused investors with sources of supply and land funds to develop this type of housing to continue to be cautious, even suspending sales, limiting marketing and delaying the launch of new projects until next year.
Absorption rates for some types of low-rise housing remain low.
Many projects that were on sale last quarter have temporarily stopped selling this quarter to complete legal procedures, wait for the market to recover and wait for the completion of surrounding infrastructure projects.
Meanwhile, in existing projects, some investors continue to apply diverse sales and lending policies, rental commitment policies to attract buyers. However, the absorption of low-rise houses is still difficult to improve.
According to a survey conducted by Batdongsan.com.vn on 5,000 real estate brokers, up to 57% of participating brokers said that the number of successful transactions of low-rise housing products decreased by 50% in the last quarter; 28% of them confirmed that transactions decreased by 10-50%.
Many brokers believe that the main reason for the "sluggish" situation of low-rise houses is that the selling price of this product is too high, because it is a high-value product, so the purchase cost is high and it is difficult to borrow capital.
The reason is still only in the selling price.
Market research report data from Batdongsan.com.vn shows that the average selling price of street-front houses in Hanoi in the third quarter of 2023 is 333 million VND/m2 and in Ho Chi Minh City is 209 million VND/m2. Meanwhile, the average price of private houses also reaches 124 million VND/m2.
Not only are selling prices anchored at high levels, but in some areas, average selling prices have also shown signs of a slight increase despite the lack of liquidity. Maintaining high selling prices has affected investors' sentiment when many factors such as borrowing capacity, increased financial costs and profitability are affected. Especially in the period when the low-rise housing rental market is facing many difficulties.
The wave of land returns also makes many investors hesitant about low-rise housing types for business purposes.
As for the demand for buying to live, currently this demand for low-rise housing is not much. Mainly focused on the type of apartment due to many advantages such as security, utilities, ability to borrow capital and especially suitable selling price. Therefore, low-rise housing is quite "lonely" in the market because it is not suitable for actual needs.
Commenting on this type, Mr. Dinh Minh Tuan - Director of Batdongsan.com.vn in the Southern region said that high selling price is one of the major barriers for buyers who want to buy low-rise houses at the present time. Most types of low-rise real estate are priced much higher than the average income of the people and are products with great value that are difficult to borrow to buy.
Meanwhile, tourism and retail activities have not grown strongly due to the impact of the macro economy and the post-Covid-19 pandemic. Therefore, it will take a long time for the street-front housing type to recover, possibly until the third quarter of 2024.
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