**3 Key Highlights of the Southern Real Estate Market**
Recent statements from Mr. Tran Quoc Dung, Vice President of the Vietnam Real Estate Association, indicate that the southern real estate market has emerged from a prolonged period of stagnation, buoyed by a restoration of confidence.
Since the end of 2023, three primary factors have signaled signs of recovery in the real estate market: the impact of government policies, bank interest rates, and a resurgence of confidence.
**Firstly**, based on market statistics, the southern real estate market has exited the “bottom” and overcome its most challenging phase. Experts predict an official recovery following a “V-shaped” pattern from the end of Q2 2024.
In Ho Chi Minh City, revenue from real estate transactions reached 61,000 billion VND in Q1 2024, marking a 15.7% increase compared to the same period the previous year. The recovery trend has extended to neighboring markets like Binh Duong and Dong Nai, where property listings and inquiries in March 2024 exhibited significant growth compared to previous months. Supply continues to improve as major developers launch new projects.
Image: Ha Vy
**Secondly**, the government and the State Bank of Vietnam’s policy and interest rate support have become more pronounced. In Ho Chi Minh City alone, approximately 30% of the 148 stalled or problematic real estate projects have been resolved. The Department of Natural Resources and Environment is also actively addressing obstacles to accelerate the issuance of land use certificates to citizens.
On the interest rate front, several rounds of cuts have brought deposit rates down to record lows, hovering around 5% per year for 12-month terms. Lending rates have also declined significantly from their peak levels. While this has somewhat facilitated access to capital for real estate developers, it remains insufficient to entice homebuyers in general.
**Thirdly**, in the business realm, developers have recognized the need to restructure their operations and products to “survive” amidst market adjustments. They have consequently implemented appropriate transformations. Conversely, on the consumer side, the number of investors seeking real estate has increased in major markets such as Ho Chi Minh City, Binh Duong, Dong Nai, and Ba Ria-Vung Tau, indicating a return of confidence.
**Condominiums Shine Bright**
According to Mr. Tran Quoc Dung, confidence is a crucial factor in the recovery of the real estate market. This is especially true when it is supported by the approval of three fundamental laws: the Amended Housing Law, the Amended Real Estate Trading Law, and the Amended Land Law.
The Amended Real Estate Trading Law and the Amended Housing Law are expected to create opportunities for “doing business honestly and eating honestly” for reputable enterprises, contributing to market transparency. Between now and the effective date of the laws on January 1, 2025, real estate project developers with complete legal documentation, construction capabilities, strong financial resources, and a focus on addressing underserved market segments will have ample development opportunities.
Regarding the Amended Land Law, the new provisions related to planning, land acquisition, land allocation, land leasing, compensation, and resettlement for citizens are highly consistent with other specialized laws. Simultaneously, the elimination of the land price framework and the introduction of annual land price tables that closely align with market prices are highly positive changes.
These new laws are expected to establish a comprehensive legal framework, increase supply, eliminate groundless price hikes, and drive the real estate market’s rapid recovery and sustainable growth.
Mr. Dung emphasizes that these laws will be a pivotal factor in the real estate market’s projected recovery, which is anticipated to become evident from Q2 2024. Within this context, certain segments are likely to lead the market’s recovery, particularly products that cater to genuine needs. Condominiums are emerging as “shining stars” with increased interest and renewed liquidity. This is understandable, as the market will inevitably prioritize essential needs, such as finding a home for personal use, especially as condominium prices continue to rise.
Social housing is another segment seen as “on the pulse” of market demand. Following the government’s 1 million social housing units initiative, several positive signals have been observed. According to the Ministry of Construction, 108 social housing projects with a total of 47,532 units have been registered by local authorities for completion in 2024. Additionally, certain adjustments have made it more attractive for qualified businesses to participate in this segment.
Furthermore, the burgeoning tourism industry has sparked optimism for the resort real estate segment. Among them, coastal condominiums are a highlight as they cater to both ownership and rental needs, generating a potential income stream. This is a highly positive signal, suggesting that the resort segment has the potential to improve by 20-30% compared to last year.
