Real Estate Market Shows Signs of Recovery in Vietnam
This segment of the housing market is meeting real demand. Currently, the real estate market recovery has been gradual and stable, building on previous momentum and accumulation, along with support from economic growth and urbanization.
Confidence Restored
Dong Nai Province has witnessed a surge in demand for low-cost housing, land plots, and apartments.
According to the Dat Xanh Services (DXS – FERI’) Economics – Finance – Real Estate Research Institute, apartment prices in Ho Chi Minh City and neighboring provinces have increased slightly by 2-3%, primarily due to new high-end and luxury projects. Townhouses and villas in the South have also seen a modest price increase of 1-3%, particularly in Dong Nai, Ba Ria – Vung Tau, and Binh Duong.
In terms of supply, during Q1/2024, Ho Chi Minh City and the southern provinces only had approximately 1,200 new real estate products available, mainly from existing projects. Only two new luxury projects were launched in the last quarter, but sales have been slow.
Despite the low supply, apartment products in Ho Chi Minh City and the South offer diverse price ranges in most segments. Accordingly, the economy segment ranges from 35 – 50 million VND/m2 (up 10 – 15% year-over-year), the mid-range segment from 50 – 80 million VND/m2 (up 5 – 7% year-over-year), the high-end segment has surged from 80 – 125 million VND/m2 (up 20 – 30% year-over-year); the luxury segment prices have reached up to 300 million VND/m2 and have remained stable compared to Q1/2023.
Experts believe that market confidence is gradually improving, as more customers are visiting projects and showrooms. This indicates that real estate buyers are becoming more optimistic and preparing to re-enter the market. Apartment prices in Ho Chi Minh City are expected to continue rising as new supply entering the market is scarce, and only high-end and luxury projects are being developed, which will impact price levels in many areas.
In Dong Nai province, the number of customers searching for real estate and the number of listings have both increased significantly. The demand for real estate in Dong Nai has grown significantly in the land plot and villa segments, which have traditionally been the market’s strengths. In particular, land plots priced at 8 – 13 million VND/m2 and an area of 70 – 120 m2 have received the most inquiries. These products have also experienced the most improved sales during this period.
According to Batdongsan.com.vn, the number of listings and searches for real estate nationwide has increased significantly in the past month compared to previous months. Particularly in the land plot segment, in addition to Ho Chi Minh City, land plot transactions in Long An, Binh Duong, and Dong Nai have all shown impressive growth. In reality, for the mid-range land plot segment, those seeking affordable products can only consider neighboring areas where land plots and villas are still significantly cheaper than in Ho Chi Minh City.
The Dong Nai Province Real Estate Association believes that the real estate market’s growth in the early months of 2024 reflects the robust development of infrastructure projects, especially highways connecting the province and Long Thanh International Airport. Furthermore, the diversification of projects such as new urban areas, resorts, and social housing is creating more options for both buyers and investors.
Synergy is Needed
The real estate market in the provinces and cities of the Southeast has gradually grown in the first months of 2024.
According to Batdongsan.com.vn, the real estate market in Dong Nai in Q2/2024 is expected to improve further as several new projects begin to restart and enter the market. However, considering that liquidity has not yet fully recovered, transactions are likely to remain concentrated in those seeking to purchase for actual living purposes and investors with strong financial resources who seek land plots for accumulation and long-term investment.
Experts believe that the positive signals in the real estate market are the result of several factors. These include the government’s and ministries’ efforts to resolve legal obstacles for projects, the National Assembly’s passage of three amended laws: the Land Law, the Housing Law, and the Real Estate Business Law. Additionally, the National Program for the Development of at Least 1 Million Social Housing Units for the 2021 – 2030 Period has increased the land fund, projects, and housing products.
The Dong Nai Province Real Estate Association believes that in the coming period, to promote a healthy and stable market growth while limiting speculation and unreasonable price increases, the association will advise and guide its members on the new provisions of the amended Land Law, Housing Law, and Real Estate Business Law, as well as the decrees and circulars guiding the implementation of these laws. The association will also continue to make recommendations so that real estate businesses can access credit sources and bonds with favorable interest rates.
Moreover, real estate businesses themselves need to restructure their products and invest in building housing products that meet social demands to achieve a balance between supply and demand.
In addition to legal factors and capital sources, the solution to create new opportunities for real estate market development, not only in Dong Nai but also in neighboring provinces and cities, is to accelerate the completion of transportation infrastructure such as the Bien Hoa – Vung Tau, Ben Luc – Long Thanh, Dau Giay – Lien Khuong highways, and Long Thanh International Airport.
Experts suggest that to support the real estate market, bank interest rates should be maintained at a low and stable level, providing a foundation for bank maturing funds to seek investment channels with more attractive returns, including real estate, especially land plots with a relatively low investment value and high profit potential.
This will further stimulate local planning, focus on public investment, and create momentum for socioeconomic development.
According to Ms. Duong Thuy Dung, Managing Director of CBRE Vietnam, the signs of recovery in the Vietnamese economy, along with the government’s efforts to accelerate the implementation of the amended 2024 Land Law, have contributed to boosting the sentiment of both institutional and individual investors in recent times. 2024 is considered a pivotal year for the market to transition to a new phase of healthy and sustainable development. Market participants in 2024 will continue to benefit from attractive home purchasing policies and leasing policies, helping to reduce investment costs.
