Condominiums are shining
According to PropertyGuru Vietnam’s report, in the long period from 2015 to 2023, the price index of condominiums in Hanoi and Ho Chi Minh City increased by 82% and 56% respectively. According to Savills Vietnam’s calculations, the growth rate of apartment prices from 2019 to the first half of 2023 is 13% per year.
Despite the high increase in condominium prices over the years, many experts believe that this segment will continue to remain “hot” in 2024.
Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS), said that the price of inner-city condominiums, despite being already high, will continue to rise due to high demand and limited supply. In addition, the rising input costs of materials, labor, land prices… have also accumulated to the condominium prices.
Condominium segment is expected to continue to rise in prices. (Illustrative photo: Cong Hieu).
“The housing demand in large cities is still high, while the preparation for real estate investment projects is time-consuming, causing a shortage of supply. Also, the increase in input costs for materials, labor, and land prices… has also contributed to the rise of condominium prices,” Dinh said.
Similarly, Prof. Dang Hung Vo also believes that condominium prices will continue to increase in 2024. Explaining this, Vo said that the story of rising house prices despite a sluggish real estate market is not surprising when the prices of raw materials and labor have been steadily increasing each year, so the cost of building a house is also expected to increase accordingly. Moreover, a part of speculators buying and selling in the secondary market has led to a significant increase in house prices for end-users.
Dwelling in alleys maintains an upward trend
One of the segments forecasted to experience a strong price increase in 2024 is dwellings in alleys.
Actual observations show that the real estate market in alleys in Hanoi is becoming vibrant again with a surge in transactions. Prices have also increased compared to a year ago.
Regarding the attractiveness of this type of lien thổ real estate (the type of property that is directly connected to the ground, not an apartment or a villa), a leader of Savills said that in recent years, despite the market fluctuations, the return on investment in lien thổ real estate has remained high, fluctuating at 20 – 25% per year. In some projects, the prices in secondary market areas have increased by 40 – 50% per year.
The leader also evaluated that lien thổ real estate is still an effective investment channel and a safe haven in the context of the continued inflation. This type of product is suitable for investors with stable financial resources, who can invest in the medium and long term.
Tran Minh, Chairman of the Vietnam Real Estate Brokerage Club (VSC), said that the price of houses in Hanoi alleys has increased again due to the ongoing demand. After the period from the middle of 2023, house prices in alleys increased on average by 200-300 million dong. This type of real estate is projected to continue to increase slightly by 10 – 15% in 2024.
Similarly, according to Cao Minh Thanh, CEO of Milanpro, the real estate market in major cities like Hanoi is showing positive signals and in 2024, these positive signals will become even clearer, which also means that real estate prices will rise again.
Industrial real estate attracts investment
Despite being significantly affected by the global economic recession and political instability, industrial parks continue to remain stable and develop.
According to the Vietnam Real Estate Brokers Association (VARS), industrial real estate rental prices in 2023 increased by about 20%, with the northern region witnessing the strongest increase. The average rental price in this region is 135 USD/m2/rental cycle, an increase of 33% compared to 2022. In the southern region, the average rental price is 188 USD/m2/rental cycle, a 15% increase compared to 2022.
According to Pham Thi Mien – Deputy Head of the Market Research and Investment Promotion Advisory Board at VARS, industrial real estate in 2024 is still evaluated as a segment with good growth potential.
Many new industrial park investment projects have been approved for investment, starting the next stages of implementation. Industrial real estate supply is growing in both the northern and southern regions. The demand for industrial real estate remains high…
In addition, the planning of many provinces and cities for the period from 2021 to 2030, which has been approved, will partly solve the difficulties related to legal procedures for industrial parks. These factors will help the industrial real estate market maintain its position and growth in 2024.
Land plots should only be invested in long-term
According to the report by PropertyGuru Vietnam, in the last months of 2023, the liquidity of the secondary land market showed signs of a slight recovery, with investors starting to make down payments in projects with high discounts, complete legal procedures, located near densely populated residential areas and convenient transportation connections to the city center.
Buyers and investors have higher demands for quality and legality of the projects. They tend to use more data to make decisions. These are data with a history of fluctuations in prices, investment returns, and supply-demand.
Although land plots still remain one of the promising types that attract people’s attention, in the short term, from 2024, when the amended Laws on Real Estate Business and Housing take effect, the real estate market will face more difficult impacts.
Specifically, with the current tightening regulations on land parceling, it is forecasted that the demand for land plots will decrease sharply as buyers are concerned about legal risks. At the same time, land prices will also be adjusted downwards, especially for large parcels of land.
According to Dinh Minh Tuan, Director of PropertyGuru Vietnam in the Southern region: “In the long term, land prices could continue to rise as real estate prices depend on factors such as infrastructure development, economic growth, and people’s income.“
Real estate expert Tran Khanh Quang predicted that at least from the second quarter of 2024, the new land plots will see a recovery of demand. However, this segment will not experience a heated surge like before. Transactions will mainly occur in certain areas, without widespread expansion. It will not be until 2025 and onwards that the new land plot market enters a cycle of price increase.
