Investors preparing to invest
At the end of 2023, the domestic real estate market recorded positive signals with the bustling atmosphere of a series of newly launched projects.
According to statistics from the Ministry of Construction, in the fourth quarter of 2024, the whole market had 20 newly licensed projects, with a scale of about 11,539 units, equivalent to 133% compared to the third quarter of 2023.
Also according to the report of the Vietnam Real Estate Association, in this quarter, about 7,000 products were launched on the market, with a total supply reaching 21,774 products, increasing by 6% compared to the third quarter of 2023. The number of transactions reached 5,710 products, equivalent to the third quarter of 2023 and double compared to the first quarters of the year. The absorption rate continued to improve, reaching 26%, increasing by 12% compared to the same period in 2022 and equivalent to the third quarter of 2023.
In addition, the market is gradually appearing more expectations and positive lights in the overall picture.
First of all, there are government solutions to remove difficulties and support the market, including: promoting disbursement of public investment capital, implementing real estate credit packages, and especially reducing interest rates for loans. Accordingly, in December 2023, for the first time, all 4 state-owned banks including: Agribank, BIDV, Vietcombank, VietinBank reduced the interest rate for 1-2 month term deposits to below 3% per year.
According to the survey, at the end of 2023, some banks offered home loans at record low levels. Specifically, VP Bank currently has an interest rate of only 5.9% per year, Agribank offers home loans with an interest rate of 8.5% per year, Vietcombank has a real estate purchase loan package with an interest rate of 8.5% for the first 12 months…
Actually, the sharp decline in bank interest rates is attracting more and more capital to real estate. This is an opportunity for home buyers and investors to access cheap borrowing capital compared to previous times.
Furthermore, 2024 is also a promising year for real estate, as macro policies and legal corridors are becoming increasingly clear, creating a transparent and open mechanism for investors to participate in the market.
Accordingly, the Land Law (amended) 2024 was passed by the National Assembly in the fifth extraordinary session on January 18, 2024 and will take effect from January 1, 2025, playing an important role in creating a stable legal environment for Vietnam’s real estate market. Therefore, removing legal obstacles and providing a new legal framework will open up many opportunities for sustainable development of the real estate market, and more broadly for the entire economy.
In the face of positive developments in the overall market, many investors and the wealthy are hurrying to invest before the market stabilizes in the next 1-2 years.
Statistics from Batdongsan.com.vn show that in the third quarter of 2023, the secondary market liquidity showed signs of a slight increase, the trend of investor capital withdrawal appeared in projects with high discounts, full legal documents, located near crowded residential areas, and convenient traffic connection to the city center. Along with the return of purchasing demand, the demand for buying houses and land nationwide increased by 6% compared to the previous quarter.
Specifically, this increase occurred in all types of real estate including apartments, land plots, individual houses, and townhouses. Among them, apartments, villas, and land plots recorded an increased demand of 6-7%. In addition to the increasing purchasing demand, house and land prices in July and August 2023 also showed stability. The number of loss-cutting sales announcements decreased significantly compared to the beginning of the year.
Golden time for investing in villas, townhouses
In the context of the volatility of the overall market in 2023, the villa & townhouse segment in Hanoi has not yet become really bustling but still recorded positive figures.
According to the report of CBRE, in terms of absorption rate, in the fourth quarter of 2023, villas & townhouses in Hanoi recorded nearly 680 units sold, raising the total number of units sold in 2023 to 3,490 units and surpassing the total supply of new sales in this year. Particularly, the number of units sold in the second half of the year increased by 5.5% compared to the first half of 2023.
Also according to statistics from Savills, the low-rise segment in Hanoi reported a primary supply of 710 units from 16 projects, decreasing by 2% on a quarterly basis and 23% on an annual basis. The reduction in supply is one of the strongest factors pushing prices of villas and townhouses in Hanoi to continuously increase. Accordingly, the average price of primary villas increased by 3% on a quarterly basis, while the price of townhouses and shophouses simultaneously recorded an increase of 9% and 6% on a quarterly basis, respectively.
According to observations, in the context of recent market developments, villas and townhouses are increasingly sought after in the last months of 2023 and are expected to experience strong growth in the first half of 2024.
In the context of scarcity of clean land fund in Hanoi, low-rise projects with beautiful and prime positions in the inner city, close to the center are more and more sought after by investors, especially in the “hot spots” of Hanoi real estate in recent years.
In this list, it is impossible not to mention the real estate near West Lake, an area long known as the “golden land” of Hanoi with the presence of a series of large investors, including: Daewoo E&C Group with the Starlake Tay Ho Tay urban area project, Sun Group with the Sun Grand City Thuy Khue Residence project…
But perhaps, when it comes to this area, the most prominent must be mentioned is the Ciputra Urban Area. The project is known as the multimillion-dollar urban area for the wealthy in Hanoi. After nearly 2 decades of construction and development, Ciputra Hanoi is currently the common home of over 7,000 residents, with 30.8% being foreigners from 74 countries worldwide.
At present, the attractiveness of Ciputra and the projects around the West Lake area has not shown signs of cooling down. The remaining projects on the large “golden land” are being sought after by the wealthy, the upper class, even though the prices are not cheap.
