Real estate transactions remain sluggish

A newly published report by the Dat Xanh Services Institute of Economic - Financial - Real Estate Research (DXS - FERI) shows that in the housing real estate segment in the third quarter of 2023, about 38,000 primary products were launched on the market, but up to 90% came from existing projects and were mainly concentrated in the North with about 14,000 products and the South with about 17,500 products. However, the absorption rate is quite low, only reaching 10% -20% of the total supply.

In the land segment, Danh Khoi Group said that in the third quarter of 2023, the market in Ho Chi Minh City and surrounding areas recorded only 6 projects opening for sale with about 271 plots, equal to 21% of the same period last year. The consumption rate reached 25%, only 12% compared to the same period.

The new supply of townhouses and villas in the quarter was only 144 units for sale from 4 projects, only 5% compared to the same period last year. The consumption rate was only about 28%, equivalent to 40 units. Most of the transactions were concentrated in products priced under VND10 billion/unit. According to Danh Khoi Group, the general difficulties of the market, macroeconomic fluctuations... have affected customer psychology, causing sales transactions to not meet expectations.

Danh Khoi Group representative also said that recently, investors have had to extend the reservation period at projects opening for sale by an average of 3-5 months, as well as continue policies of quick payment discounts, extended payment terms, opening gifts... to stimulate market demand.

Transactions of land and townhouses in new projects in Ho Chi Minh City are currently mainly secondary transactions in old projects.

Sharing more to see the absorption rate in the real estate market is still low, Mr. Neil MacGregor, General Director of Savills Vietnam, said that in the context of many difficulties in the market, investors continue to maintain a cautious mentality, limit marketing activities and delay plans to launch new projects until next year. Some investors with projects opening for sale are forced to apply a series of preferential sales policies and diverse loans, along with new lease commitments to attract buyers.

On the other hand, real estate buyers are much more cautious, despite the fact that interest rates have dropped to their lowest level since 2020. In a customer survey on their intention to buy real estate if interest rates drop conducted by Dat Xanh Services, only 26% of people chose "yes"; 31% responded "no"; 43% of people were "unsure".

Dr. Pham Anh Khoi, Director of DXS - FERI, said that all market participants at this time are in a "dilemma". The government has to reduce interest rates to promote production and business but also has to balance to avoid affecting exchange rates and the safety of the system. Production - business and service enterprises are also in the same situation, facing the situation of borrowing or not borrowing. Real estate enterprises are both lacking capital and facing the belief that the market has not fully recovered. Therefore, they choose to wait, so liquidity is difficult to increase. "In the real estate industry, buyers often wait for the market to warm up before buying, but now they do not have enough confidence. Real estate investment does not have a quick capital turnover, and if they want to sell, they cannot immediately press the sell order like stocks, so investors will choose to wait to see the impact of the management policies. We predict that by the end of 2023, the impact of the policy will be clearer" - Dr. Khoi said.

"Stuck" cash flow

According to Dr. Le Dat Chi, Head of the Faculty of Corporate Finance - Ho Chi Minh City University of Economics, there are many reasons to explain the low demand for real estate, including the cash flow of many investors being "stuck" in unfinished real estate projects, the money has been paid but the house is not yet available; many people are stuck in corporate bonds and have not found a way out. Therefore, in order for the real estate market to recover, the story of cash flow and confidence for investors must be resolved...

Source: https://nld.com.vn/kinh-te/giao-dich-bat-dong-san-van-i-ach-20231016212642082.htm