After a period of sharp price decline, will townhouses recover in 2024?

According to information from the Ministry of Construction , by the end of the third quarter of 2023, there were about 324,300 successful real estate transactions, equal to 41.29% of the same period last year. The decrease in transactions was mainly concentrated in the land segment, equal to 35.79% over the same period; apartments and individual houses also recorded a decrease, equal to 63% over the same period.

Regarding real estate inventory, according to the reports of 53/63 localities, the real estate inventory in the third quarter was about 18,808 units. Of which, the inventory proportion is mainly in the individual housing real estate segment and land plots of projects.

Among them, the townhouse type has recorded a decrease of 10-20% in 2023 with many information about cutting losses. The reason for the sharp decrease in selling prices is indicated to be due to the high investment nature of this type, which was pushed up in price during the period when the market was heating up with investors using financial leverage. Therefore, in difficult times, many investors had to accept losses and caused the market to record a significant price decrease.

After a period of sharp price decline, the real estate market will recover in 2024, picture 1 — Townhouses recorded significant price reductions and loss-cutting information in the first half of 2023.

In the report on the real estate market in Ho Chi Minh City and surrounding areas in November by DKRA, it was also shown that no townhouse products were successfully sold. The primary price level recorded an average decrease of 8% - 10% compared to the previous launch, discount policies, profit commitments, etc. continued to be applied by investors to stimulate market demand.

However, along with land, townhouses are still a type of property that many investors highly appreciate and choose as an investment asset. This is demonstrated by the interest of investors in townhouses in the affordable and mid-range segments, located in areas far from the center or in provinces adjacent to large cities in recent times.

This interest is demonstrated by the fact that recently, the number of customers seeking supply through brokers has increased. In particular, areas near residential areas and industrial parks have seen a sharp increase in the number of customers looking for information. Data from some real estate markets also shows that in November 2023, the number of advertisements for sale and the level of interest in townhouses and suburban markets all had positive growth.

According to Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, industrial park land and townhouses in suburban markets of Ho Chi Minh City such as Binh Duong, Long An, Dong Nai, Ba Ria - Vung Tau have shown positive signs since the end of this year and may be more optimistic in the second half of 2024.

The number of ads for sale of townhouses in Can Tho, Binh Duong , Vung Tau increased by 3-5%, the demand for buying townhouses in Long An increased by 3% compared to the previous month. Other suburban real estate markets also recorded an increase of 2-5% in ads for sale, the demand for buying also increased by 3-5% in the last period of 2023.

Sharing the same view, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, also said that the land and townhouse segment in provincial markets may gradually warm up from the end of 2023 onwards, with transactions returning to a stable price trend or a slight increase compared to the present in some projects with good infrastructure and legal status, as well as locations near industrial parks.

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