Real Estate Market in Vietnam Shows Signs of Recovery and Expansion
Two years ago, Vietnam’s real estate market experienced a downturn, with various segments facing liquidity issues, particularly the land segment. As the market began to experience difficulties, many real estate investors feared that prices would plummet. In contrast, those with funds were hesitant to invest, fearing overpayment.
However, at present, this fear among investors seems to have dissipated, as the demand for land has witnessed a significant surge in many areas during the recent period. Specifically, according to data from Batdongsan.com.vn, real estate inquiries nationwide rose by more than 68% in March compared to February. Notably, Ba Ria-Vung Tau province saw a 65% increase in real estate inquiries in March, accompanied by a 68% growth in listings.
The segment that attracted the most investor interest in Ba Ria-Vung Tau during the past month was land, with an 84% increase in inquiries. This was followed by private houses, with a 64% increase in inquiries. Apartments and townhouses saw increases of 51% and 43%, respectively.
In Bien Hoa, Bình Dương, land inquiries for March 2024 soared by over 83%, while the number of properties for sale increased by 96% compared to February. The segment with the highest growth in interest was land, with a 114% increase in purchase inquiries, followed by project land with a 113% increase in inquiries compared to the previous month. Private houses and townhouses in Bình Dương ranked next with a 75% growth in purchase inquiries, while apartments also witnessed a 72% increase in inquiries during the past month.
Similarly, in March 2024, the real estate market in Đồng Nai province is regaining momentum after a period of stagnation. Notably, the number of customers searching for real estate in the area increased sharply by 77%, while the number of listings also increased by over 68% compared to February. The demand for real estate in Đồng Nai has grown the most in the land and villa segments.
According to data from the Vietnam Association of Realtors (VARS), there were 6,200 transactions in the first quarter, an increase of 8% compared to the fourth quarter of 2023, and twice as many as the same period last year. The absorption rate continued to improve, reaching nearly 31%, an increase of 5% compared to the fourth quarter of 2023 and 19% compared to the same period last year.
VARS noted that in the first quarter of the year, there were more investors “hunting” for land, particularly in areas on the outskirts of major cities, localities with strong infrastructure development, and high urbanization rates. As a result, many areas have recorded a “sudden” increase in land transactions, especially for plots with sub-division certificates.
Although prices have stabilized, there are no signs of a decline, but successful transaction prices are 20-30% lower than at the peak of the land fever. The market in the outskirts of Hanoi and areas connected to industrial parks has seen an increase of 10-20%.
VARS’s survey indicates that 70% of customers and investors are willing to “put down money” to buy real estate in 2024 if they find the right product. Among them, land and low-rise products are the two segments that attract the most interest.
TS Nguyễn Văn Đính, Chairman of VARS, said: “After a long period of慎重waiting and observing every movement of the market, customers and investors are starting to show a clear renewed interest in the real estate market. However, this demand is being expressed in a more measured, thoughtful, and calculated way. Instead of making an immediate purchase decision, customers and investors are willing to take the time and effort to check the legal documentation and conduct thorough site inspections before making a decision. This has also contributed to the average time to close a deal for real estate agents increasing”.
According to TS Nguyễn Văn Đính, more investors have begun embarking on a journey to “hunt” for land, targeting areas on the outskirts of major cities, localities with strong infrastructure development, and high urbanization rates, where prices are considered “bargains” with the potential for significant growth in the future. In addition, the demand for land as an asset is still favored by investors and remains the top-choice segment.
Mr. Võ Hồng Thắng, Director of DKRA Group’s Project Development and Consulting Services, believes that land remains a sustainable investment channel. The attraction of land to investors is unlikely to wane. This is because Vietnamese investors prefer to own land-linked houses, and land is considered a safe asset accumulation channel with a high potential for profit. Additionally, compared to other segments, the legal aspects of land are more stable and transparent.
The expert mentioned that according to the unit’s research, based on the extension of recurring cycles, the period in the first half of 2024 can be viewed as the beginning of a subsequent recovery and growth cycle for the real estate market. Consequently, the land fever may return in the period 2025-2026.
