The real estate market is currently in the final stages of the recession, almost hitting bottom, according to experts. It is forecasted that the market will gradually recover from the U-shaped bottom, the speed of recovery depends on both macro and micro factors, the most important of which is the improvement of investor confidence.
Affordable apartments are a segment that is always in high demand, while supply is scarce.
According to Dr. Pham Anh Khoi, Director of Dat Xanh Services, the real estate market's opportunities in 2024 will come from the affordable housing segment (under VND2.5 billion/unit). This is a segment that always has high demand, while supply is scarce. Investors with suitable products will have many victories in the new year.
In addition, small-sized, affordable housing suitable for singles, GenZ, or single-generation families will also have many opportunities in 2024.
“Real estate businesses that want to seize these opportunities need to restructure comprehensively and build a new sustainable development strategy. Businesses must restructure their capital structure, bad debt, and be flexible in pricing to prioritize liquidity. In addition, businesses also need to prepare land funds, human resources, technology, etc. to seize opportunities in the new year,” Mr. Khoi shared.
Meanwhile, Ms. Trinh Thi Kim Lien, Sales Director of Dat Xanh Services, said that real estate brokerage businesses have not yet overcome the "extreme crisis". Over the past 3 years, the pandemic and economic crisis have exhausted the accumulated funds of the units. About 70 - 80% of brokerage businesses have left the market or temporarily suspended operations.
According to Ms. Lien, although the market is facing difficulties and challenges, people's interest in real estate is still quite high, equivalent to previous years. Studies show that by 2030, the urban population will increase by 40 - 45%, leading to an annual increase in urban housing demand of about 70 million square meters (equivalent to 1 million houses).
Nowadays, customers have started to proactively contact brokers and participate in sales events, visit model homes and projects. However, the actual payment ability of buyers is limited.
“Customers have not bought real estate not because they do not like to buy or do not want to buy. The simple reason is that they do not have enough finance, are not confident enough about their current income. Many customers are also not confident enough to borrow to buy real estate even though the lending interest rate has cooled down,” said Ms. Lien.
In the survey "Reasons why people have not decided to buy real estate", 63% of respondents said it was because of financial reasons, 16% were concerned about the legality and reputation of the investor, 11% did not "put down money" because the product did not meet their needs and 10% had other reasons.
Of the 63% of respondents who have not purchased real estate for financial reasons, 72% said that their reduced income prevented them from borrowing from banks, 53% are waiting for further price reductions; 36% want to keep cash as a reserve, and 14% have bad debt so they cannot borrow.
Dat Xanh Services experts predict that the real estate market in 2024 may fall into one of the ideal, expected or challenging scenarios.
Specifically, in the ideal scenario, supply increases by 30% - 40%, floating interest rates range from 9% - 11%, selling prices increase by 10% - 20%, and absorption rates reach 40% - 50%.
With the expected scenario, supply increases by 20% - 30%, while floating interest rates range from 10% - 12%, selling prices increase by 3% - 5%, and absorption rate reaches 30% - 35%.
In the challenging scenario, supply increases by 10% - 20%, floating interest rates range from 12% - 13%, selling prices remain stable, absorption rate reaches 20% - 25%.
Based on market analysis data as of December 31, 2023, experts are leaning towards the expected scenario. Accordingly, the real estate market in 2024 will have a new supply increase of about 30%, selling prices will also increase slightly by 3-5% and the overall absorption rate will reach 30% - 35%.
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