According to recent data from the General Statistics Office (GSO), Vietnam's GDP growth in 2023 is 5.1%. This result is significantly higher than the 2 years of the COVID-19 pandemic (2020 - 2021), but much lower than the 8% growth rate in 2022.
The bright spot of Vietnam's economy is the breakthrough in the second half of 2023. Besides, some other growth indicators such as FDI, or Vietnam's business confidence index are still at a high level.
Many people in Hanoi and Ho Chi Minh City find it difficult to buy a house because the supply is constantly hitting rock bottom. (Photo: PO)
Savills experts predict that investment activities will be vibrant again in the third quarter of 2024, with the recovery driven by major markets such as the US and UK.
Regarding the real estate market, especially in Hanoi and Ho Chi Minh City, it has not improved much, especially the housing segment.
Regarding the apartment segment, in Hanoi, in 2023, the number of primary apartments reached more than 11,900 units, down 41% compared to last year. The average primary selling price reached VND58 million/m2, up 7% quarter-on-quarter and 12% year-on-year. The average opening price in this market has increased for 20 consecutive quarters.
According to Ms. Do Thu Hang, Senior Director of Savills Hanoi Consulting Services, the market is witnessing an imbalance between demand and supply of apartments in Hanoi, especially for products in the affordable segment. The metro line and ring roads, when completed, will promote the trend of gradually moving out of the center.
Meanwhile, in Ho Chi Minh City, primary supply has been on a continuous decline since 2017. In the fourth quarter of 2023, primary supply reached 7,600 apartments, down 5% year-on-year.
It is worth mentioning that the average primary selling price in the quarter in Ho Chi Minh City suddenly decreased and returned to the 2020 level of VND 69 million/m2, down 45% compared to the same period last year.
Ms. Giang Huynh, Deputy Director, Head of Research Department and S22M commented: The supply of residential real estate in Ho Chi Minh City is currently very low, especially for a market of more than 10 million people.
“According to Savills’ Q4/2023 market report, in Ho Chi Minh City, the profit from apartment investment has decreased slightly over the past 5 years, but is still higher than the interest rate of bank deposits. Therefore, apartments continue to be considered a profitable investment channel,” said Ms. Huynh.
For the villa and townhouse segment, the supply of villas/townhouses continued to remain low. In Hanoi, the primary supply of villas/townhouses reached 710 units from 16 projects, down 23% year-on-year. Limited supply with high-priced inventory has greatly affected the market absorption rate.
In Hanoi, the fourth quarter saw sales volume drop 37% quarter-on-quarter and 67% year-on-year to 64 units. The absorption rate in the quarter was only 9%, down 5 percentage points quarter-on-quarter and 12 percentage points year-on-year.
Despite a slight increase of 1% quarter-on-quarter and 10% year-on-year in 2022, in the last quarter of 2023, the primary supply of villas/townhouses in Ho Chi Minh City continued to be low with only 771 units.
Performance for this product line was also lackluster, with sales in the quarter reaching 64 units, equal to Q3.2023 but down 24% YoY. Absorption remained at 8%, equal to the previous quarter but down 4 percentage points YoY.
Limited supply and increasingly high prices compared to the affordability of people in Hanoi and Ho Chi Minh City are boosting the appeal of satellite cities.
With the support of the ring road project network in Hanoi and Ho Chi Minh City, these areas are becoming more attractive to real estate buyers thanks to convenient connectivity, diverse products and more affordable prices.
From 2024 to 2026, suburban districts will contribute 74% of new townhouse supply in Hanoi and 75% in Ho Chi Minh City.
Commenting on the overall housing real estate market, Ms. Huynh said that the housing supply in Hanoi and Ho Chi Minh City is often low and many people cannot access housing prices. This is pushing demand to neighboring provinces.
“The outlook for the commercial segment in both Hanoi and Ho Chi Minh City remains positive, with demand forecast to support future supply. Office supply in Vietnam is increasingly “green”, with most new projects from now until 2026 expected to achieve green certification,” Giang added.
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