Real estate transactions increase, waiting for excitement to return

People look at apartments in a condominium project in Binh Duong - Photo: NGOC HIEN

So what is the current real estate market like? What is worth noting and noting?

Interest rates down, people boldly buy houses

Having just bought an apartment in Thu Duc City (HCMC), Mr. Nguyen Anh Tu (35 years old) said that recently he and his wife have researched many real estate projects in HCMC, even going to see projects in Binh Duong area bordering HCMC, but most of the projects are high priced.

After screening the projects, Mr. Tu and his wife decided to choose a place to live in a project in the city with a price of nearly 3 billion VND, of which 70% of the house value was lent by the bank.

According to Mr. Tu, at this time, the interest rate for home loans has dropped, he can borrow at an interest rate of 6%/year, fixed interest rate for the first two years, making Mr. Tu decide to settle down in this house after more than 10 years of renting.

"Actually, there aren't many apartments to choose from at this time, but I've seen that over the past two years, the number of projects can be counted on one hand. This time, interest rates have decreased and investors also have good support policies, so I decided to buy a house at this time," said Mr. Tu.

Instead of choosing to buy a new apartment or a house in the future, Mr. Tran Van Thao (33 years old) decided to buy an old apartment also in Thu Duc City area and got the pink book right after completing the house purchase procedure. According to Mr. Thao, with a bank loan of 1 billion VND, fixed interest rate for two years at 6%/year, it is suitable for his payment ability.

Speaking with Tuoi Tre , Mr. Phan Ngoc Bao An - General Director of Nova Lexington Real Estate JSC - said that in the context of the real estate market not having many new apartments, many people with real housing needs have chosen to buy houses in projects that have been handed over, with good construction quality to immediately solve the immediate need of having a place to live.

At a notary office in Thu Duc City on June 22, even though it was a weekend, there were still people coming to notarize land transaction procedures, especially land and apartment transfer transactions.

Ms. H. (head of this notary office) said that currently the number of people coming to notarize land transactions is slightly higher than the "frozen" market period in 2023, but only a fraction of the time before the pandemic.

Ms. H. said that this office has received 4,000 notarized documents in the past six months, one-third of which are transactions for buying, selling, transferring apartments, land, renting houses...

According to Ms. H., most home buyers today are people with real housing needs, especially young couples with common apartment prices ranging from 2-4 billion VND/apartment.

Real estate project under construction in District 7, Ho Chi Minh City - Photo: QUANG DINH

Mainly looking for a house with legal status to live in

Speaking with Tuoi Tre , Mr. Tran Manh Chi - Deputy General Director of Dong Tay Property Company - said that the actual transactions show that most people with real housing needs, wanting to buy a house to settle down, have started to return to the market to buy apartments at this stage.

"Currently, buyers are no longer interested in real estate projects that are being built in the future but do not have standard legal documents. Therefore, apartments that are being traded today must ensure full legality, investors must also offer many flexible payment policies, extend payment schedules, and even in some projects that have already received the house, buyers still have up to 30% of the amount unpaid and are being paid late," said Mr. Chi.

Similarly, Mr. Pham Trong Phu - Director of Titanium Real Estate Management Company - said that recently, land in some residential areas in Thu Duc City has had "warmer" transactions than before.

Regarding land, Mr. Phu said that in some areas, land prices have increased slightly compared to before, from about 100-110 million VND/m2 to 130-140 million VND/m2, approaching the pre-pandemic period.

In addition, Mr. Phu said that in the future, regulations on land division and sale will be stricter, land funds for land division and sale will be limited, and information on infrastructure connections will be limited, so currently some areas outside Ho Chi Minh City such as Nhon Trach and Long An also have better transactions than the "frozen" period.

Meanwhile, the sales director of a foreign real estate corporation said that the reality at this corporation shows that the Northern region is having better transactions than the Southern region, the projects in the South being introduced to the market are not being well received as in the previous period. Currently, home buyers are mainly those with real housing needs, there are not many groups of customers investing or "surfing" like in the previous period.

According to this person, the most difficult thing about the real estate market in Ho Chi Minh City is the lack of new project supply.

For example, this group has available capital from its parent company abroad, ready to pour billions of dollars into project development, but due to limited land funds, in recent years this enterprise has been looking for projects with clean land funds in the city for M&A (mergers and acquisitions) but has not found what it wanted. Therefore, this person believes that the market will still have difficulty in terms of supply in the near future.

Similarly, the vice president of a real estate corporation with a large project in Ho Chi Minh City also said that due to poor market absorption, the corporation is having to temporarily suspend plans to develop villas, townhouses and apartments within the project area, even though this is clean land.

"We are only trying to complete the unfinished subdivisions, and we are forced to stop the new subdivisions. Customers are not ready to spend large sums of money to buy high-value apartments at this time, and the investors themselves are also facing financial difficulties and do not have enough resources to rush like before in this difficult time," he shared.

Real estate market is still difficult due to legal problems

Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association - said that the most difficult point in the real estate sector is legal problems that lead to old projects being stuck and new projects being lacking.

According to Mr. Chau, in the first quarter of 2024, only one commercial housing project was "approved for investment policy at the same time as investor approval" with an area of ​​3,647m² and only one old project completed construction investment with a scale of 219 apartments.

There are no commercial housing projects eligible to raise capital to sell future housing and there are 62 commercial housing projects (old projects) under implementation with 28,462 apartments.

In addition, Mr. Chau also said that no social housing project has been approved for investment or granted a construction permit, but only one social housing project (old project) has been completed with 242 apartments and seven social housing projects and housing for workers (old project) with 4,996 apartments are being implemented.

"In 2024, the real estate market in Ho Chi Minh City will continue to have an imbalance in housing supply and demand, and a shortage of housing supply, leading to the consequence that housing prices may be pushed up or remain high, especially with the imbalance in the high-end housing segment and a severe shortage of affordable commercial housing and social housing," said Mr. Chau.

What is the reason for the increase in real estate business revenue?

Source: Ho Chi Minh City Statistical Office - Compiled by: NGOC HIEN - Graphics: N.KH.

According to the Ho Chi Minh City Statistics Office, in the first five months of the year, Ho Chi Minh City's other service revenue was VND172,491 billion, up 8.6%. Of which, real estate business revenue was estimated at VND101,814 billion, accounting for 59% of other service revenue and up 7.4% over the same period last year. Previously, in the first four months of 2024, real estate business revenue was estimated at VND80,845 billion, up 9.8% over the same period last year.

Speaking with Tuoi Tre , representatives of notary offices said that the increase in revenue from the real estate sector is partly due to the fact that the declared value of real estate transactions has approached the real value, much higher than the previous declaration.

The head of a notary office said that in the past, to "avoid" paying high taxes, real estate transactions often only declared a few tens to a few hundred million VND, but now that is no longer the case, all transaction records are over 500 million VND. If the declaration is low, the tax will be returned and it will be very troublesome and difficult for future procedures.

Therefore, this person said that people's declarations were closer to the selling price, which made the tax collection higher than before.

Real estate market forecast to stabilize by mid-2025

Apartment prices in Hanoi increased by an average of 31% in the first six months of 2024 - Photo: NAM TRAN

The real estate market has shown signs of recovery, but according to experts, the market will stabilize when there are more transactions of affordable apartments and social housing.

According to the Ministry of Construction, in the first quarter of 2024, the number of completed commercial housing projects nationwide was 10, newly licensed was 19, projects eligible to sell future housing were 38, and projects under implementation were 984.

Total real estate transactions in the first quarter of 2024 reached 133,512 successful transactions (109,066 in the first quarter of 2023).

Of which, apartment and individual house transactions reached 35,853 transactions (27,590 in Q1-2023), land transactions reached 97,659 transactions (81,476 in Q1-2023). The Ministry of Construction also said that the apartment market continues to attract the attention of groups with real housing needs and medium and long-term investors.

Local recovery

Speaking with Tuoi Tre , Mr. Dinh Minh Tuan - director of Batdongsan.com.vn in the Southern region - commented that the real estate market is recovering locally, especially in the Hanoi market, prices on the secondary market and high-end apartment projects are both increasing.

The average price of apartments has increased because the newly launched high-end projects are offering high prices, causing the average price of the whole market to increase. Mr. Tuan said that the apartment market has increased in the first three months of the year, but not in a positive direction in terms of both supply and demand. Moreover, the recovery of the real estate market in recent times has been more concentrated in the North. In addition to apartments, the land market and individual houses in the North have also increased.

Looking at the market as a whole, it has not met the demand for real estate. People with real housing needs in Hanoi are looking for the segment under 40 million VND/m2, while in Ho Chi Minh City it is under 50 million VND/m2, but currently there is a shortage of supply.

According to Mr. Vo Huynh Tuan Kiet - Director of CBRE VN, the market supply in recent times has only been the high-end apartment segment and above. Forecasting in the next few years, Mr. Kiet said that purely commercial apartment products will not have mid-range and low-end products.

This expert also affirmed that only when housing supply is abundant will market demand stabilize, and supply and demand in all segments be balanced, then the market can develop sustainably.

Currently, the real estate market is showing a biased, unbalanced trend, leaning towards the high-end segment in recent years. Therefore, the market also expects support for the development of social housing and low-income housing from the Government to soon create this supply.

Expectations for enforcement of real estate laws

According to experts, the Government's proposal to allow three laws related to the real estate market to take effect from August 1, five months earlier than the previous resolution of the National Assembly, and two clauses of Article 200 and Article 210 of the Law on Credit Institutions are also proposed to take effect early from August 1 to ensure consistency and strictness when receiving collateral from credit institutions, which will create a new, more transparent and favorable legal corridor for the real estate market.

However, in reality, when applying the laws, there is always a delay and it takes from six months to a year to have a clear impact. Moreover, the laws do not mention balancing the market, adjusting housing prices, nor do they mention reducing loan interest rates or land prices. On the contrary, input costs for projects may increase, so it is difficult to expect a reduction in housing prices.

Mr. Dinh Minh Tuan also commented that the laws need time to penetrate the market, not to mention the need for decrees and circulars to guide, so in the short term the market still lacks supply. Currently, there is a transition period between old and new laws, no one dares to make decisions, so new supply is low, and projects that have new supply may sell at very high prices.

However, Mr. Tuan hopes that the new law will help solve the supply problem and remove legal obstacles for projects in both the North and the South. Regulations will be clearer and supply in the medium and long term will be more abundant.

The new law also imposes stricter requirements on investors, only potential investors can implement projects, and at the same time supports home buyers to only have to deposit 5% when buying a house. The screening of investors will be better, the market will develop more healthily. But it will take at least until the second quarter of 2025 for the real estate market to reach equilibrium and develop sustainably.

Deputy Minister of Construction Nguyen Van Sinh:
The government will support increasing the supply of social housing to reduce house prices.

Resolution 33 of the Government has provided a comprehensive solution for the real estate market. Accordingly, the Government has proposed a series of solutions such as perfecting institutions, promoting the development of social housing, facilitating enterprises' access to capital, issuing bonds to mobilize capital for projects...

The solution for the market is available, decentralized to localities, and transparent, but implementation is slow.

Increasing the supply of social housing to meet the housing needs of the majority of people in urban areas is a solution to increase the supply of housing, towards readjusting the housing structure, reducing current housing prices. When there is a lot of low-cost housing, housing prices will certainly decrease.

In the coming time, the Government will issue a separate decree on social housing development in the direction of shortening investment procedures, creating maximum convenience for social housing project investors in carrying out investment procedures, accessing land, capital, and selling social housing.

Source: https://tuoitre.vn/giao-dich-bat-dong-san-tang-cho-soi-dong-tro-lai-20240623074751839.htm