Strong recovery signals of the real estate market

In 2024, the real estate market will continuously receive good news when the amended Laws such as Land, Housing, Real Estate Business, Law on Credit Institutions 2024 were passed by the National Assembly and took effect 5 months earlier (from August 1, 2024, instead of January 1, 2025) have institutionalized many new policies of the Party and State on housing management and development.

Although the application of the new law in the third quarter still faces some challenges, especially problems related to land price lists in some localities, the efforts in removing obstacles for the market in the recent past are undeniable. Many localities such as Ho Chi Minh City, Binh Dinh, Binh Duong have made significant progress in resolving legal issues.

For example, Ho Chi Minh City has completed legal procedures for 8 real estate projects such as The Metropole Thu Thiem, Celadon City, Metro Star, Lotte Eco Smart City Thu Thiem... These are all projects with a total investment capital of up to thousands of billions of VND with large scale and diverse supply. From there, creating confidence for a strong recovery of the market in the last months of 2024 and gaining momentum for 2025.

In terms of supply, transactions and selling prices, the real estate market recorded positive signals. According to estimates by Vietcap Securities Joint Stock Company, the real estate market in Hanoi and Ho Chi Minh City in the past 3 quarters recorded 23,900 primary apartments traded, an increase of 28% compared to the total number of transactions in 2023. New supply also grew by 11%, reaching 20,900 units. Hanoi is currently dominating with 85% of total transactions and 91% of new supply in these two major markets.

Along with that, real estate prices continue to increase, especially in the apartment segment and show signs of spreading to other segments. In Hanoi, class A apartments recorded the strongest price increase, from 20 - 35% compared to the same period in 2023; while in Ho Chi Minh City, the price increase fluctuated from 15 - 20%.

Secondary prices have no longer been deeply discounted, but instead have a price difference of 10-20%. Housing rental prices have also increased by 10-20%. These figures reflect strong demand and the market's ability to maintain stable prices. At the same time, this trend also helps strengthen confidence that the real estate market will continue to develop positively. From there, it creates a basis for businesses to expect good absorption for projects expected to open for sale in 2025.

Mr. Nguyen Van Dinh, Vice President of Vietnam Real Estate Association (VNREA), President of Vietnam Real Estate Brokers Association (VARS) predicted: 2025 will be an important milestone year when the market supply begins to be removed, but not completely removed. Projects that fully meet legal requirements and investor capacity will be prioritized, helping to balance supply and demand in the market.

The Chairman of VARS also commented: This will be a promising year with stable growth in the industrial and commercial real estate segments. Despite many fluctuations, these two segments have maintained significant stability, especially in industrial real estate, when demand for production areas, factories and logistics remains high. At the same time, the commercial real estate market has shown positive signs in the last two quarters.

However, according to Mr. Dinh, residential real estate, especially the apartment segment, will still be the main driving force of the market in 2025, especially in the context of the current high demand for affordable apartments, while the supply is severely scarce. This segment not only meets the actual needs of middle-income households but also attracts the attention of investors looking for real estate products with high liquidity.

Dr. Can Van Luc, Chief Economist of BIDV, analyzed: The real estate market has now had many more positive changes than before. Specifically, the macro economy has gradually stabilized, inflation has been controlled at a reasonable level, interest rates in Vietnam remain low. Indicators such as budget deficit, public debt, foreign debt and the Government's debt repayment obligations are all within the National Assembly's permitted range.

Legal issues have also been gradually resolved and institutional improvement has been focused on with many important laws passed and coming into effect, along with new decrees and policies issued. Planning at all levels is also being improved... These are important "supporting" factors, creating a solid foundation to help the real estate market enter a new phase and recover more sustainably in the coming time.

According to Mr. Luc, the current context both domestically and internationally still has many risks and challenges for the recovery of the real estate market. Specifically: the global economy is slowing down, the progress of public investment disbursement is slow and lacking breakthroughs, and uneven. Real estate businesses also face many difficulties; real estate prices are still high and increasing rapidly in some segments... Therefore, real estate businesses need to be determined to restructure, focus on strong areas, and at the same time control risks related to cash flow, interest rates and maturing debt to overcome the current difficult financial period.

From a macro perspective, Dr. Nguyen Minh Phong, an economic expert, commented: Recently, the Government, ministries, branches and localities have been very determined to remove difficulties for businesses and projects. Moreover, the macro economy has also had positive changes, creating momentum for the real estate market. The history of real estate cycles shows that when the economy moves from recovery to growth, the real estate market will often become vibrant again with increased prices and transactions.

"With optimistic forecasts for Vietnam's economic growth, we can fully expect that in the last quarter of 2024 and the first half of 2025, the real estate market in general will continue its recovery trend on sustainable foundations," this expert shared.

Along with the Government continuing to promote public investment, the rapid urbanization process also contributes to creating a great demand for housing, business and real estate investment. In general, the real estate market is showing positive signs and is expected to continue to develop in 2025.

According to VNA

Source: https://doanhnghiepvn.vn/kinh-te/tin-hieu-phuc-hoi-manh-cua-thi-truong-bat-dong-san/20241214083357110