Creating momentum for the real estate market

The real estate market plays an important role and is considered an indicator reflecting the health of the Vietnamese economy. The real estate market directly affects GDP growth and in 2025, this market is forecast to enter a new, more promising and sustainable development cycle thanks to the solid support from the completion of the legal framework.

Completing the legal framework

According to analysis by the Vietnam Real Estate Association (VNREA), the real estate market is showing positive signs of recovery as the GDP of real estate business activities by the end of 2024 increased by 3.34% compared to 2023; the supply of new commercial housing increased in the period 2021-2024, the condotel segment showed positive signs, and land transactions grew strongly. In addition, the number of industrial parks increased from 397 in 2021 to 431 in 2025, with the occupancy rate tending to increase. However, the challenge is that the profits of listed real estate enterprises decreased by 1.5%; stocks decreased by 1.9% mainly due to site clearance costs and a sharp increase of 3.2% in debt.

Sharing about the real estate market outlook in 2025, Ms. Do Thu Hang, Senior Director of Research and Consulting Department of Savills Hanoi, predicted that the market will enter a new cycle and this year is the first year of this cycle, following the development from the recovery and legal consolidation process. In 2025, the apartment type in large cities such as Hanoi and Ho Chi Minh City will still be a bright spot and develop strongly in terms of supply, demand and project merger and acquisition activities; projects of weak investors will be transferred when the legal framework becomes clearer, and stuck projects will be untied, creating momentum for supply to the market. Apartments will still be products that attract cash flow from investors in addition to the gold and stock markets due to their ability to preserve large profits and high liquidity.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, commented that the Government and the National Assembly are determined and "locked" GDP growth to reach 8% or more, so it is clear that economic growth will improve. Thus, both real demand and investment demand will tend to increase; selling prices in 2025 will tend to adjust more reasonably, but a deep price reduction will be unlikely because land prices, land price lists, and costs are showing signs of creating input pressure on real estate product prices.

Economist, Associate Professor, Dr. Dinh Trong Thinh assessed that 2025 will be an important milestone when the real estate market operates according to new regulations from the Land Law, Housing Law, and Real Estate Business Law. These factors will help the market warm up, especially for the social housing and worker housing segments, meeting the needs of society. In particular, the new land price list will create significant changes in pricing, transactions and project implementation.

"Strong reforms in legal policies will promote the market to become more vibrant, more transparent and more competitive. This will not only help the market recover in 2025 but also create a solid foundation for sustainable development in the 2026-2030 period," said Mr. Thinh.

Real estate market in 2025 has many opportunities in the new development cycle

Focus on removing barriers

Dr. Can Van Luc, Chief Economist of BIDV, member of the National Financial and Monetary Policy Advisory Council, assessed that the real estate market has passed the most difficult period and is facing many growth drivers from the macro economy, institutional reform and flexible monetary policy.

However, the market also has problems. The current high housing prices are mainly due to many reasons - the main ones being legal problems and fear of responsibility, leading to a shortage of supply; input costs such as land rent, land use, site clearance compensation, financial costs, and construction materials also contribute to the increase in housing prices.

Dr. Can Van Luc believes that high housing prices are causing many consequences. Mr. Luc calculated that with the current average apartment selling price and the average household income in 2024, the time to accumulate enough money to buy a house is about 23.7 years. Thus, a civil servant would have to work almost his entire life to be able to buy an apartment.

In order for people to soon have access to housing, stabilize their lives, prevent waste of land resources, and pave the way for a new era of the real estate market, Mr. Luc proposed a number of solutions to reduce housing prices. In which, the first and most important solution is the determination to fight waste, especially in the fields of land, real estate, public assets and public investment.

From the perspective of enterprises, Mr. Nguyen Quoc Hiep, Chairman of GP. Invest, said that by January 2025, about 25 provinces and cities will have announced new land price lists. According to Mr. Hiep, the content of land price calculation is due to the structure of land price calculation, the input factors are not complete, leading to high land prices. This is the biggest difficulty for enterprises, leading to many other difficulties that delay the launch of new projects because many enterprises are currently unable to calculate land prices after 1-2 years. Along with that, input costs are increasing, leading to inaccurate land price calculation, which can cause many problems. In addition, in the real estate sector, enterprises sometimes have to apply for 38-40 seals to be able to carry out projects; or applying for planning adjustments also faces many difficulties.

"Thoroughly handling backlog projects and strictly controlling land resources will create momentum for economic growth as well as help the real estate market develop more healthily and transparently, increase supply to the market, and reduce housing prices," added expert Can Van Luc.

According to him, local authorities need to take timely intervention measures in areas where housing and land prices are rising rapidly. If real estate prices increase unreasonably by more than 20%, local authorities should intervene. At the same time, it is necessary to rectify the acts of "inflating prices", "making prices", and speculating on real estate projects as has happened in some localities recently, especially in the land auction stage. Anyone who violates the land auction must be severely punished.

Supply of social and affordable housing will be abundant

Commenting on the real estate market trend in 2025, Mr. Tran Quang Chung, Business Development Director of One Housing, said that the affordable housing segment will not have much opportunity to appear in 2025, the main supply is still the mid-range and high-end segment, serving to upgrade housing. In 2026-2027, the housing supply will increase sharply, the market segment will be more diverse, the supply of social and affordable housing will be more abundant.

Source: https://nld.com.vn/tao-suc-bat-cho-thi-truong-bat-dong-san-196250302211715725.htm