Real estate market difficulties may last until the third quarter of next year.

The real estate market has shown signs of improvement recently, but has not really broken through.

According to batdongsan.com.vn, last August, the real estate market recovered compared to July 2023. Specifically, the demand for real estate nationwide increased by an average of 5%; the number of real estate listings also increased by 2% compared to July 2023.

Real estate market downturn could last until the third quarter of next year, figure 1 — Difficulties in the real estate market may last until the third quarter of next year. (Photo: LD)

In the Hanoi market, in August, land was the type of property with the highest demand, up 12% compared to July 2023. Apartments, private houses, townhouses, and villas also saw an increase in interest of 7% - 9%. However, searches for project land decreased by 7% compared to July, showing that this type of property needs more time to recover.

In Ho Chi Minh City, in August, the highest demand for buying townhouses and villas (up 7%). The level of interest in apartments, private houses and project land still maintained a stable increase of 2 - 4% compared to July 2023. Land is the only type of property with a decrease of 1% compared to July 2023.

Demand for real estate rentals nationwide in August increased by an average of 9%, but the number of rental listings decreased by 2% compared to July 2023. In particular, rental housing has a sharp increase in interest with an increase of 38% in Hanoi and 32% in Ho Chi Minh City. This is the peak season for students to enroll and return to school, so the demand for rental housing among students increases.

Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, commented: The problem of supply shortage stems from deep-rooted causes such as capital congestion and legal problems.

Both problems have caused the real estate market to face not only a shortage of supply but also many other related challenges. Observing the market in recent times, the expert commented that the market has only recovered about 30% compared to expectations.

The signs of recovery are consistent with an economy that is developing in a U-shape, rather than a V-shape, which means an economy where many other industries and sectors are also facing difficulties, not just real estate.

Mr. Nghia predicted that the difficulties of the real estate market could last until the second and third quarters of next year. One of the segments and types expected to “break the ice” of the real estate market is low-cost housing and social housing, which has not yet been strongly boosted in supply. Enterprises have not yet had the “freedom” to participate in making low-cost housing.

However, Mr. Nghia said that to realize the goal of promoting low-cost supply, the Government needs to regulate the price range for this type of housing. In China, the Government has clear regulations on the price range for low-cost real estate.

"Without creating a level of housing and real estate prices, the real estate market crisis cannot be resolved," Mr. Nghia emphasized.

In addition, to help the real estate market recover, the Government has been taking drastic actions such as issuing Resolution No. 33/NQ-CP dated March 11, 2023 on a number of solutions to remove and promote the safe, healthy and sustainable development of the real estate market and establishing Working Groups to remove difficulties in the real estate market with the participation of businesses. These actions contribute significantly to the transformation of the real estate market in the coming time.

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