Outstanding events of Vietnam's real estate market in 2024
The turning point of Vietnam’s real estate industry is marked by the presence of three new laws on real estate. In addition, the market has also witnessed unprecedented fluctuations in the apartment and auction land segments…
National Assembly passes three laws on real estate
The National Assembly’s approval of the Land Law, Housing Law and Real Estate Business Law was the most prominent real estate event of the past year. This is an important premise for the market to move towards the “era of growth”.
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| The three new real estate laws will be a solid foundation to promote the development of the real estate market. Photo: National Assembly |
With a total of 420 provisions to review, agencies have had to work at full capacity to be able to bring these important laws into life from August 1, 2024, 5 months earlier than the original plan.
In particular, the presence of the 2024 Land Law is expected to resolve bottlenecks related to land allocation procedures, land valuation, site clearance, etc. A solid legal framework will be a launching pad to help projects accelerate implementation, thereby unblocking supply for the market.
With the revised Housing Law, the highlight comes from the flexible regulations, creating conditions to promote the social housing segment, contributing to solving the problem of social security. Regarding the Law on Real Estate Business, the new regulations are a strong blow to the subdivision and sale of land, limiting speculation and price inflation, ensuring the healthy development of the market...
In general, the presence of the three amended real estate laws is not only an important step in perfecting the legal system but also opens up many new opportunities for the Vietnamese real estate market, while contributing to the overall development of the economy.
New land price list "launched", prices increased dozens of times
The fourth quarter of 2024 is the time when many localities will update the new land price list. In particular, the focus of attention is on Ho Chi Minh City and Hanoi, when land prices after adjustment have increased dozens of times.
With the new land price list in Ho Chi Minh City, the highest price recorded is 687.2 million VND/m2, applied on Nguyen Hue, Dong Khoi, Le Loi streets (District 1). Thus, if not calculating the K coefficient, this price is 4.2 times higher than the old land price list.
However, this increase is still not comparable to the suburban districts. Specifically, the highest price for Song Hanh Highway 22 (Hoc Mon District) is 32 million VND/m2, an increase of 23 times. For Dang Cong Binh Street (Hoc Mon District), the new price is 18.5 million VND/m2, an increase of about 12 times.
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| Currently, Hang Dao Street is one of the places with the highest land prices in Hanoi. Photo: Thanh Vu |
The Hanoi real estate market also closed a turbulent 2024 by "overhauling" the land price list. In Dong Da district, Cat Linh street recorded a 3.45-fold increase in land prices, climbing to VND264.13 million/m2. Not far behind, the street associated with the Banking Academy - Chua Boc also had a price of up to VND240.12 million/m2, 3.45 times higher than the old price.
In Hai Ba Trung District, Nguyen Quyen Street has an updated land price of VND206.31 million/m2, an increase of 8 times. Similarly, Giai Phong Street - the road leading to many large universities - also has a land price increase of 7.8 times, reaching VND188.09 million/m2.
The numbers listed above, although relatively high, still cannot be compared to land prices in Hoan Kiem district. On Tran Hung Dao street (from Tran Thanh Tong to Le Duan), the highest land price was previously only VND114 million/m2. However, the price has now jumped to VND695.3 million/m2, a 6-fold increase. Similarly, Nha Tho street has also increased 5.5 times, from VND125.4 million/m2 to VND695.3 million/m2.
Industrial real estate maintains its appeal
The industrial real estate market in the key economic regions of the North and South remains a bright spot attracting investment. According to data compiled from reports, by the third quarter of 2024, the occupancy rate in industrial parks reached 77%.
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| Localities such as Ho Chi Minh City, Dong Nai, Binh Duong… are racing to establish new industrial parks. Photo: Le Toan |
In particular, industrial real estate rental prices in the North recorded a 5.7% year-on-year increase, reaching an average of 130 USD/m2/rental cycle. In the South, the average rental price reached 176 USD/m2/rental cycle, up 5.6% over the same period last year.
Notably, in the period from 2020 to September 2024, industrial real estate is the leading type of M&A (mergers and acquisitions) transaction value in the real estate sector, accounting for 40%.
The stable performance of the industrial real estate segment is supported by the increase in FDI capital. Many large enterprises, especially in the high-tech sector, are re-evaluating Vietnam's development potential, in the context of the increasingly widespread "China + 1" strategy.
Not stopping there, this segment also benefits from easy access to bank credit, as the risk coefficient of this type has decreased from 200% to 160%. The above adjustment by the State Bank will encourage commercial banks to actively lend capital to implement industrial park real estate projects, thereby attracting more "big guys" to participate in the market.
Progress in social housing development remains slow
In the project to develop more than 1 million social housing units, the country aims to complete 130,000 units in 2024. However, according to a report from the Ministry of Construction, provinces and cities have only completed about 21,000 units, equivalent to more than 16% of the plan.
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| The current number of social housing units is still unable to meet the housing needs of the people. Photo: Thanh Vu |
Ho Chi Minh City and Hanoi, the two leading cities in construction targets, have only achieved 21% and 37% of the plan, respectively. This situation is similar to other localities such as Binh Duong (37%), Dong Nai (16%). Some places have not even had any completed projects such as Thai Nguyen, Ninh Binh, Nam Dinh, Thua Thien Hue, Vinh Long, Ben Tre, Bac Lieu, Ca Mau.
From 2021 to present, the whole country has 644 social housing projects implemented with a scale of 580,109 units. Of these, only 96 projects have been completed with a scale of more than 57,620 units. 133 projects have started construction with over 110,200 units. The remaining 415 projects have been approved for investment policies, which will provide more than 412,200 units if completed.
The disbursement progress of the VND120,000 billion credit package is also not more optimistic. According to the Ministry of Construction, by the end of October 2024, the disbursement rate was only 1.5%, equivalent to about VND1,783 billion. Of which, for the group of homebuyers, this package has only lent about VND150 billion.
Hanoi apartment prices increase "rapidly"
In 2024, apartment prices in Hanoi increased at a dizzying rate. According to Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, as of the third quarter of 2024, the apartment price index in Hanoi increased by 64% compared to the second quarter of 2019, while the increase in Ho Chi Minh City was only half of this figure.
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| Apartment prices in Hanoi have increased simultaneously in both the primary and secondary markets. Photo: Thanh Vu |
According to information compiled from market research companies, the average selling price of new apartments in Hanoi is currently at 70 million VND/m2, an increase of about 28% compared to last year. The "heat" from the primary market has also caused the price of old apartments to skyrocket. Currently, the average price of secondary apartments is around 50 million VND/m2, an increase of more than 40% compared to last year.
The reason for the sharp increase in apartment prices in Hanoi last year stems from the scarcity of housing supply in the mid-range and low-end segments. Although the number of newly launched projects has improved, 75% of new products are in the high-end segment. In addition, the simultaneous increase in costs such as land, construction materials and labor also significantly affects the output price of products.
Disturbance in land auctions in Hanoi suburbs
Since the beginning of 2024, real estate investors have had to re-evaluate the auction land market in the suburbs of Hanoi. District authorities such as Phuc Tho, Hoai Duc, Thuong Tin, Quoc Oai, Dong Anh, Me Linh, etc. have continuously “won big”, thanks to auctions attracting hundreds to thousands of participants, achieving revenue of up to hundreds of billions of VND.
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| The auction land market in the suburbs of Hanoi has been "stirred up" by many groups. Photo: Thanh Vu |
Not stopping there, many plots of land also have "unprecedented" high winning prices. For example, in Hoai Duc district, the corner lot LK03-12 in Long Khuc area has a winning price of up to 133.3 million VND/m2. In Thanh Oai district, it is lot LK03-10 in Ngo Ba area with a winning price of more than 100.5 million VND/m2. In Ha Dong, the "beauty queen" lot 1A - 03 saw a winning price of 262 million VND/m2...
According to the Ministry of Construction, the above record numbers stem from poor management and implementation of the auction. In some places, investors have formed groups and colluded to pay prices many times higher than the starting price. Then, they “abandoned the deposit” after winning the auction, aiming to set up a virtual price level to make a profit.
However, this "fever" did not last long. From the fourth quarter of 2024, the winning price of many plots of land has decreased by 20-50% compared to the beginning of the year. Not only that, the image of auctioned land in the suburbs has also been seriously damaged, due to the "screaming" price of 30 billion VND/m2 in Quang Tien commune, Soc Son district. Only 4 days after the incident, the Investigation Police Agency - Hanoi City Police Department investigated 5 subjects for violating regulations on property auction activities.
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