At the seminar on Real Estate Market Prospects organized by the Ho Chi Minh City Real Estate Association (HoREA), Mr. Tran Hoang Quan - Director of the Ho Chi Minh City Department of Construction - presented many notable figures.
In the first 9 months of this year, Ho Chi Minh City had 15 commercial housing projects confirmed to be eligible for sale and lease-purchase of future housing products with 15,020 units put on the market, up 17.6% over the same period last year. However, the products were mainly in the high-end (accounting for 70%) and mid-range segments, with no affordable housing.
Also in the first 9 months, the city's real estate business grew by negative 8.71% compared to the same period last year. Previously, the first 6 months of the year grew by negative 11.58% and the first quarter grew by negative 16.2%.
Along with that, real estate business revenue in the first 9 months decreased by 4.7% compared to the same period. Previously, it decreased by 8.3% in the first 6 months and by 14.6% in the first 4 months.
Mr. Quan commented that the real estate market still faces many difficulties but has gradually recovered, with growth in the following quarter being less negative than in the previous quarter, contributing to the construction industry's recovery.
The supply of commercial housing is higher than the same period last year. However, domestic and foreign investment capital poured into real estate business is still limited, the supply of affordable housing segment has no products brought to the market.
Mr. Tran Du Lich - Member of the National Monetary Policy Advisory Council, Chairman of the Advisory Council for the implementation of Resolution 98 - agreed with Mr. Tran Hoang Quan's assessment, stating that the real estate market has grown from negative to slightly negative, not positive, and has recovered slowly.
Overall, Vietnam's economy is still improving month by month and quarter by quarter, but this year it is difficult to have high growth. To reach 5% GDP, the fourth quarter must be over 7%. In that context, the real estate industry is even more difficult because it is related to the financial and credit markets.
Mr. Tran Du Lich pointed out that the real estate market has an imbalance in supply (Photo: HQ).
Mr. Lich pointed out two bottlenecks of real estate: institutions and capital absorption, in which the capital absorption bottleneck is a big deal. Since the fourth quarter of 2022, real estate has had difficulty with capital sources and high interest rates. Over the past year, the State Bank has prioritized controlling inflation, maintaining the value of the dong, and reducing interest rates. The interest rate trend will be positive from now to next year, associated with stabilizing the credit system.
Mr. Lich said that in 2024, the economy is not expected to recover strongly but will certainly be better than in 2023. The real estate market cannot collapse, but it cannot be as favorable as before 2019. The market may change from a little negative to a little positive in the fourth quarter, and improve from the second quarter of 2024.
The real estate market also needs to address the issue of supply and demand because speculative products (serving the upper class) dominate, while products for people with real needs are too few. "This is a disease that needs to be treated. It is not by chance that the Government is strongly developing social housing, but to bring supply and demand together, in accordance with consumer needs," said Mr. Lich.
Also related to the imbalance in products in the market (high-end - mid-range dominates, social housing is non-existent), Mr. Tran Hoang Quan said that HCMC currently has 33 projects with a 20% land fund for social housing. If this land fund is implemented, HCMC will have over 70,000 social housing units.
However, in these 33 projects, 50% have not been cleared yet, some projects have encountered difficulties in calculating infrastructure costs, difficulties in confirming eligible subjects to buy social housing...
In the program of 1 million social housing units set by the Government, Ho Chi Minh City was assigned 69,000 units but set a target of 92,000 units by 2030. Currently, Ho Chi Minh City has 88 independent social housing projects or interspersed with commercial projects.
In the coming time, if the revised Housing Law and the revised Real Estate Business Law are passed and there are guidelines to remove obstacles, the city will be able to balance the three segments of high-end, mid-range and low-end, Mr. Quan said.
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