At the Workshop on “Unblocking Bottlenecks and Promoting the Real Estate Market Development” organized by Lao Dong Newspaper on the morning of July 5, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, shared that in December 2022, based on big data and market research through development cycles, Batdongsan.com.vn introduced the concept of a “turning point.” In the previous cycle, this point occurred in mid-2013 when inventory value decreased by 15% after seven consecutive years. There are three factors influencing this “turning point.”
First is credit: 2013 was the first year that the credit growth target was adjusted upwards again, reaching over 12%. Second is interest rates: at the beginning of 2012, banks significantly reduced interest rates, and about 1.5 years later, the market responded with a “turning point.” Third is policies: three essential laws, including the Land Law, Housing Law, and Law on Real Estate Business, were amended and passed in 2013 and 2014.
In the current cycle, these three factors also show similarities with the previous cycle of the real estate market. First, Vietnam’s credit growth target for this year remains high at 14–15%. Although credit growth was quite low in the first five months of 2024, at 2.4%, there are now signs of improvement compared to the beginning of the year. Second, the operating interest rates have been consecutively reduced since the beginning of 2023, with lending rates currently at 9–11%. In the short term, pressure on exchange rates and deposits has caused a slight increase in deposit interest rates of 0.2–0.9% per year. However, the general long-term trend indicates that interest rates will be maintained at a low level. Third, the amended laws related to real estate have been passed and will soon come into effect.
Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn
Therefore, Batdongsan.com.vn maintains its viewpoint, as stated at the end of 2022, that the real estate market will reach a “turning point” in mid-2024. Subsequently, the market will go through consecutive stages of exploration, consolidation, improvement, and stabilization.
First, the turning point and exploration stage (from Q2 2024 to Q4 2024): the sign of the “turning point” is reduced inventory and improved liquidity. The exploration stage will last for about a quarter, with small-scale liquidity appearing in real-serving property types.
During this stage, buyers and investors remain cautious as the market has just gone through challenges such as difficulties in obtaining real estate loans and illiquid investments. Therefore, they prioritize certainty factors such as serving actual needs, clear legal status, good financial support policies, stable rental yields, and optimized costs.
At the turning point and exploration stage, apartments attract a lot of attention and record the best liquidity among real estate types. Parameters from the previous cycle also indicate that apartments performed well during this stage. According to the Ministry of Construction, apartment inventory value decreased by 30% from mid-2013 to early 2014. Apartment supply was strong at that time, with the introduction of many projects such as Vinhomes Times City, Vinhomes Royal City, and Vinhomes Central Park, accompanied by supportive policies.
Additionally, a characteristic of the previous cycle that is repeating is the faster reduction of inventory in the Northern region compared to the Southern region. In the previous cycle, Hanoi’s apartment inventory value was VND 3.7 trillion, while Ho Chi Minh City’s was VND 22.4 trillion. In this cycle, Hanoi apartments were the most vibrant segment in the real estate market in the past six months. The demand for buying Hanoi apartments peaked in March 2024, increasing by nearly 60% compared to the end of 2023.
Currently, although the interest in apartments has “cooled down,” prices remain unchanged. Hanoi apartment asking prices in May 2024 were on par with Ho Chi Minh City, reaching VND 50 million/m2. Hanoi apartment prices increased by 31% compared to the beginning of 2023, while Ho Chi Minh City apartments only rose by 6%.
Second is the consolidation stage, which will take place in Q1 2025. In this crucial stage, when the following issues are resolved, the market will have the momentum to consolidate and develop positively. One, unblocking bottlenecks in capital flow. For example, in 2013, the establishment of the Vietnam Asset Management Company (VAMC) contributed to the rapid handling of bad debts, financial health, restructuring of accounts, and the injection of money into the market. Two, maintaining commercial bank lending rates and monetary policies at appropriate levels. Three, ensuring the quick implementation of the amended laws related to real estate with specific guidelines.
When the bottlenecks in finance, monetary policies, and legal issues are addressed, buyers will start to have a positive mindset. They will be more open-minded about costs but still prioritize real-serving products that generate good cash flow during the recovery stage.
In the consolidation stage, detached houses and shophouses, characterized by real-serving purposes, clear legal status, moderate price appreciation, and rental yields, attract the interest of buyers. If monetary factors become more favorable, these two types will gradually improve in transaction volume.
During the exploration and consolidation stages, to meet buyer demands, investors should focus on developing products serving practical purposes and offering practical and effective policies to support buyers financially. At the same time, ensuring the legal status of the projects is essential.
Regarding real estate exchanges, optimizing costs and focusing on strong types/regions are recommended. Additionally, with the implementation of the 2023 Law on Real Estate Business, real estate brokers must obtain a practice certificate and operate within a real estate exchange or business providing brokerage services. Exchanges and brokers must provide complete and truthful project documents and be responsible for the information they provide. Brokers must also undergo training and annual skill enhancement. Therefore, real estate exchanges need to uphold professionalism and transparency in their business operations and continuously upgrade their staff’s expertise and qualifications.
Third, the improvement stage will occur from Q2 2025 to Q4 2025. Once the factors are unblocked in the consolidation stage, the economy and investments will develop, and supply will return, leading to a potential increase in real estate prices during this stage.
Simultaneously, the market sentiment will begin to recover, and buyers will pay more attention to investment needs and price appreciation. They will not overly emphasize selling prices and legal factors as they did during the market’s gloomy period.
With this trend, Batdongsan.com.vn forecasts that after the market goes through the consolidation stage and if policy and capital issues are resolved, land and villas will have good liquidity in the improvement stage.
To seize the opportunities in the improvement stage, investors need to prepare their financial capabilities to develop larger-scale projects. Real estate exchanges will gradually invest more in advertising channels and expand their personnel to enhance transaction effectiveness.
Finally, the stabilization stage will occur from Q1 2026. In this stage, the real estate market will record liquidity and price increases, with diverse development types. During the stabilization period, price appreciation and investment attraction are the two factors that buyers prioritize when choosing real estate. At this point, investors will seek opportunities in real estate types with high price appreciation, limited quantity, but high interest.
