Real Estate Market Poised for Recovery, Survey Finds
A survey of 1,152 real estate agents conducted by the Dat Xanh Services (DXS) Institute of Economics, Finance, and Real Estate (FERI) in March 2024 revealed that the majority of respondents expect a rapid recovery in the real estate market.
Demand for Housing on the Rise
Specifically, 38% believe that the market will recover within this year, while approximately 50% anticipate a rebound by the first half of 2025. At the time of the survey, around 13% of agents who had left the industry returned, and 55% of those who had departed are expected to rejoin soon.
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Caption: With the real estate market entering a recovery cycle, condominium apartments are gaining traction among buyers. Source: Tan Thanh
The survey also indicated that most buyers are primarily interested in purchasing homes for residential purposes (58%), followed by those buying for long-term investment and rental (34%), and a small percentage seeking short-term “property flipping” (3%). The decision to buy or sell at this time is influenced by the “cheap” flow of money, with low interest rates and incentives from developers.
According to another survey by DXS-FERI, the condominium segment continues to lead the market. The demand for apartments priced under 2.5 billion VND is significant (68%), followed by apartments under 3.5 billion VND (22%).
Industry Experts Anticipate “Race” and New Market Cycle
Experts suggest that the current period marks a readiness among all parties for a “race” and the anticipation of a new real estate market cycle. Developers are leading this race, competing to launch projects and increase supply. However, not all developers are starting at the same point, with foreign companies “departing the starting line and temporarily leading,” while domestic developers and new entrants are in the “restart” phase.
Since the end of 2023, developers have maintained favorable policies for products in their existing inventory from previous sales launches, while gradually reducing incentives for newly released products due to increased demand for new projects.
Prices Unlikely to Decrease Further
Regarding the market developments in the first quarter of 2024, Mr. Vo Huynh Tuan Kiet, Director of Sales at CBRE Vietnam, stated that 2024 is a pivotal year for the real estate market before the enactment of new regulations (amended Land Law, amended Real Estate Business Law, and amended Housing Law) related to the sector. As a result, investors and clients are unsure of what to expect, but the prices in certain segments (apartments, land plots, etc.) have shifted to an upward trend due to factors such as cheap credit, market expectations, and rising project input costs. “In my opinion, individuals in need of purchasing a home for residential purposes should do so soon because prices are unlikely to decrease further. Hesitation may result in missed opportunities for acquiring favorable locations. As for the land plot segment, the new law will restrict land division, leading to a limited supply and a lack of price reduction,” Kiet observed.
Mr. Luu Quang Tien, Deputy Director of DXS-FERI, concurred that from 2024 onward, the selling prices of primary real estate will trend upward due to the pressure of sharply increasing input costs resulting from new regulations. Hesitant customers and investors may miss the opportunity to purchase reasonably priced real estate at the start of the “wave.” “Opportunities are always available for discerning and decisive investors,” Tien emphasized.
Dr. Pham Anh Khoi, Director of DXS-FERI, assessed that the real estate market is exhibiting numerous encouraging signs and is on the path to recovery. He predicted that the market will gradually ascend from the “U” bottom, with the pace of recovery dependent on macroeconomic and microeconomic factors, of which market sentiment is paramount. According to the expert, the ideal scenario for the housing segment in the second quarter of 2024 includes a 30%–40% increase in supply compared to the same period last year, floating interest rates between 8% and 10%, a 10%–20% increase in selling prices, and an absorption rate of 40%–50%.
“2024 is a pivotal year for the market to accumulate, preparing for a new growth cycle. In each economic cycle, there is a phenomenon of “later waves surpassing earlier ones,” meaning that a series of old brands will decline or exit the market, while a range of new real estate brands will emerge and establish themselves in the new development cycle. At this juncture, those with substantial resources will prevail and surge forward. After a 4-year cleansing process, only approximately 20% of businesses have remained, most of which are reputable and capable of driving genuine change in the entire industry in the new cycle,” Dr. Pham Anh Khoi analyzed.
