Real Estate Market Poised for Recovery, Driven by Positive Factors
In a recent forum, Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), shared his predictions for the real estate market in the near future.
According to Dinh, the real estate market is expected to continue its recovery trend. This gradual and stable growth will be fueled by the momentum from previous recoveries, as well as the support of economic growth and urbanization.
The recovery will vary across segments and regions, similar to the trend seen in the first quarter of 2024. The apartment segment, with its high demand, is expected to lead the market recovery. Following this, landed properties such as houses and land will also experience growth as investors gain confidence in the market’s recovery prospects.
Land plots will continue to attract investor attention. However, transactions will mainly focus on smaller plots in areas with well-developed infrastructure and clear legal documentation. Investors will be shedding larger, undivided plots to “exit” their positions due to tighter regulations on land subdivision under the amended Law on Real Estate Business.
The social housing segment will benefit from new regulations that aim to ease some of the challenges faced in the past.
The industrial real estate segment is expected to continue its strong growth, with increased supply of quality properties attracting FDI from high-tech industries.
The tourism and resort real estate segment may not experience a short-term recovery but will show positive signs, particularly in products such as condotels and high-rise apartments linked to tourism and resorts in traditional and popular tourist destinations.
The commercial real estate segment will maintain its stable growth. Merger and acquisition (M&A) activities will continue to gain momentum, with increasing frequency and scale.
According to VARS, Hanoi, Hai Phong, Bac Giang, Ha Nam, Da Nang, Binh Duong, Long An, and Dong Nai are expected to remain key investment destinations nationwide.
The recovery will be further supported by the introduction of draft decrees guiding the implementation of the Land Law, Housing Law, and Real Estate Business Law in May, which will take effect on July 1, 2024. These decrees are expected to “catalyze” the resolution of key issues in the market, leading to more pronounced recovery results.
However, VARS Chairman Dinh cautions that the market faces the risk of “conflict” if the new regulations are not sufficiently comprehensive, fully aligned with other laws, and lack specific details. Such issues could hinder the positive impact of these decrees on the market’s recovery.
Additionally, capital from potential channels is expected to return to the real estate market in larger amounts and with greater accessibility.
The number of market participants willing to “re-enter” is also expected to increase. This will be evident in the launch of more projects, increased availability of brokerage services, and a 30-40% surge in the number of real estate agents and brokers. Demand from end-users and investors will grow, including both real buyers and speculators. Banks are also preparing to participate by offering competitive lending policies. While maintaining a focus on risk management, they will adopt a more open approach towards both developers and customers.
“After weathering a life-threatening illness, the surviving players will develop ‘antibodies.’ Real estate may not ‘bounce back’ immediately, but it will definitely recover gradually until it regains enough strength for growth in a new cycle,” emphasized Mr. Nguyen Van Dinh.
