The Real Estate Renaissance: Investors Return with a Bang!

Improved Absorption Rates

The Institute of Economic, Financial, and Real Estate Research Dat Xanh Services’ market report for the first half of 2024 and market forecast for the second half show positive signals for the real estate market, with a significant increase in supply and improved absorption rates.

Specifically, in the first six months, the total supply of residential real estate increased by 182% year-on-year and by approximately 46% compared to the end of 2023. The Northern region accounted for the largest share of new supply, at over 50%, while the Southern region led in terms of total primary supply, with more than 45%.

The overall absorption rate of the market has improved significantly, increasing by nearly 2.5 times compared to the same period in 2023. The absorption rate has been gradually growing each quarter, especially in the months following the Lunar New Year.

Primary selling prices have risen by 5-10%, with the apartment segment seeing the highest average increase of up to 20% in the Northern region, particularly in Hanoi, where prices surged by 30-40%. Secondary selling prices, despite some distress sales, have also witnessed a slight increase across most product types, with significant growth in detached houses. Rental prices have increased by 5-10% as well, especially in the apartment segment, indicating a stabilizing and developing market.

Mr. Pham Anh Khoi, Director of the Institute of Economic, Financial, and Real Estate Research at Dat Xanh Services, affirms that market sentiment is experiencing a positive shift. The number of customers registering for project and model house visits has increased by 5-10 times compared to the same period last year. This indicates that consumer and investor confidence in the real estate market is gradually being restored, paving the way for positive development in the coming period.

Hanoi and Ho Chi Minh City’s apartment markets have witnessed exceptional growth in the first half of 2024. New apartment supply surged, absorption rates soared from last year’s low base, and selling prices trended upward.

In Hanoi’s apartment market, there was an explosion of supply, increasing by 15 times compared to the same period in 2023, reaching approximately 7,525 units. Absorption rates also strengthened, averaging 65-70% of new inventory.

Ho Chi Minh City’s apartment supply nearly tripled from the previous year, reaching about 2,356 units. Absorption rates reached approximately 45-50%.

Selling prices for apartments in both Hanoi and Ho Chi Minh City trended upward across most segments. In Hanoi, Grade C apartments saw the highest price increase, surging by 20-30% year-on-year. In Ho Chi Minh City, Grade A apartments experienced the strongest price growth, climbing by 20-30%.

Mr. Khoi states, “With the market’s robust growth, this is an ideal time for investors and homebuyers to seek investment opportunities in the apartment markets of Hanoi and Ho Chi Minh City. With potential price appreciation and high absorption rates, the apartment market promises attractive returns for investors.”

The Race Begins

Vietnam’s real estate market in the first half of 2024 witnessed an exciting new race, with strong positive signals as developers, brokers, and customers actively participated.

Mr. Khoi points out that developers accelerated the launch of new projects, offering a diverse range of segments and locations to meet the market’s growing demands. Brokers formed alliances to boost sales activities, providing customers with the best possible options. Customers have returned to the market with a more positive mindset, seeking investment and residential opportunities.

The number of real estate businesses resuming operations in the first six months increased by 11.4% year-on-year, indicating growing confidence in the real estate market’s recovery. Additionally, the number of newly established enterprises also rose by 1.4% compared to the previous year, demonstrating the market’s attractiveness and development potential.

“The average capital scale per newly established enterprise increased by 29.7% compared to the same period in 2023,” Mr. Khoi affirms, “indicating that new enterprises are investing more financially in the real estate sector and reflecting optimism about the market’s future.”

Another encouraging sign is the 19% year-on-year increase in the real estate sector’s workforce. This growth not only reflects employees’ faith in the industry but also shows that businesses are actively expanding their personnel alongside increasing capital.

Consequently, in the first half of 2024, the country witnessed 19 project commencements, 23 kick-offs, and 27 sales events, marking a warmer phase for the real estate market. Legal factors have gained more attention from developers than ever before, becoming a critical competitive element to ensure legality and foster market trust.

“After a period of preparation and accumulation, well-resourced developers are now ready to accelerate their projects, aiming to capture market share in the new cycle of the real estate industry,” says Mr. Khoi. “Having gone through a restructuring and observation phase, many developers are actively rebuilding their internal foundations to launch new projects. In response, some leading brokerage firms are also gradually returning to the market.”