According to the Vietnam Association of Realtors (VARS), a number of investors have already launched new projects, while others are actively planning upcoming launches. Real estate agencies are starting to recruit agents to prepare for the influx of new listings, and investors are actively searching for new investment opportunities. Banks are also providing attractive interest rates to stimulate home loans, all of which are positive signs indicating that confidence in the Vietnamese real estate market is gradually being restored. This is in line with the predictions of many experts, as the real estate market has shown signs of positive recovery thanks to the government’s supportive policies.
After a period of restricted credit for real estate, there are signs of easing in this sector. Banks’ increased willingness to invest in the real estate market at competitive interest rates is having a positive impact on the market. This not only provides financial support for developers to launch new projects but also assists homebuyers in obtaining mortgages.
Specifically, after the State Bank of Vietnam reduced interest rates four times since late last year, banks have accelerated the disbursement of capital to real estate projects, especially given the current low interest rate environment and the lack of favorable bond issuance channels. The availability of credit has allowed developers to accelerate project progress, increasing the supply in the market.
VARS’ research data shows that 70% of investors with products that meet the conditions for sale are ready to launch their projects. Since the end of the first quarter of 2024, investors have started to actively launch projects, with groundbreaking ceremonies, kick-off events, and the relaunching of existing projects taking place on a large scale. Several projects with good progress have already begun accepting deposits.
Statistics also show that in the first quarter of 2024, the residential segment welcomed about 20,541 new units for sale. Of these, over 4,300 units were from completely new projects. Transactions in the residential segment continued to grow, with 6,200 transactions recorded, an 8% increase compared to the fourth quarter of 2023 and double the number in the same period of 2023. In the apartment segment alone, more than 3,000 new units were launched, with an absorption rate of 57%.
The decline in lending interest rates to the lowest level in 20 years, coupled with the economic recovery, presents an opportunity not only for developers to launch new projects but also for individuals to purchase homes. While many remain cautious about the floating interest rates after the promotional period, it is important to note that compared to last year, the average floating mortgage rate has decreased from 13-15% to around 9-11%. Furthermore, many banks have partnered with developers to offer fixed interest rate policies, protecting homebuyers from the risks associated with floating interest rates.
Currently, financial institutions are prioritizing home loans, which are considered low-risk with clear collateral. Mortgage interest rates are stable, including for home loans, and the loan terms of 25-30 years reduce the monthly repayment burden for borrowers. In addition, banks are actively cutting costs to reduce interest rates in line with the State Bank’s guidance.
VARS believes that the delayed impact of policies and the fact that the majority of outstanding credit is in medium- and long-term loans indicate that lending interest rates will continue to decline in the near future. In terms of investment demand, after a period of cautious observation, buyers and investors have started to show renewed interest in the real estate market. However, their risk appetite has changed after the lessons learned in previous market cycles. Buyers and investors are now more prudent and thorough in their decision-making. They are willing to spend time and resources on legal due diligence and carefully evaluate prices and liquidity before making a purchase.
Additionally, the continued decline in consumer credit for real estate in the first quarter of 2024 reflects the cautious approach of buyers. VARS believes that this is an opportune time for buyers and investors to act quickly, taking advantage of favorable financing and sales policies while exercising prudence and avoiding excessive leverage.
A recent survey conducted by VARS among its realtor members revealed that despite exercising more caution in their spending, up to 70% of their clients and investors are willing to purchase real estate in 2024, provided that the supply is adequate. Buyers are carefully selecting the type of property before making a purchase, with land and low-rise properties being the most popular.
Along with the return of both supply and demand, intermediaries are also actively re-entering the market. Data from VARS’ survey indicates that 20-30% of real estate agents who had left the market previously have decided to return. Additionally, 70-80% of real estate agencies are also ready to resume operations.
However, the market still faces a shortage of real estate agents, especially those with the necessary knowledge, experience, and licenses. This has led some agencies to reconsider their expansion plans and focus on recruiting new agents, subject to the availability of qualified candidates.
VARS anticipates that this shortage will be partially alleviated in the near future, as approximately 30-40% of real estate agents who had previously left the market have indicated their willingness to return in the second quarter, when the signs of market recovery become more evident. Additionally, 60-70% of real estate agents who consider real estate to be a part-time occupation are preparing to dedicate themselves fully to the industry.
In addition to monitoring the market’s recovery, agents returning to the field will also need to navigate the new regulations and requirements introduced by the revised legal framework. To adapt to these changes, real estate agents are actively updating their knowledge and enhancing their skills, particularly by participating in license exams. They are also closely monitoring market trends to increase their chances of success upon re-entering the market.
This is especially important given the expected increase in real estate supply as developers ramp up their project launches. Since the beginning of the second quarter of 2024, several high-quality real estate projects across the country, spanning a range of property types, have been introduced to the market, including the Cara River Park project in Can Tho, the Sun Ponte Residence project in Da Nang, and the Mascity project in Bac Giang.
