Recovering to “surpass the wave”
From the beginning of 2023, the real estate market in the South has faced many difficulties due to project legal policies, the State Bank of Vietnam’s reduction in real estate lending, and the direct impact on investors. This has caused many businesses in the area to only “wait for” opportunities.
In the first 9 months of 2023, the Ho Chi Minh City People’s Committee sent a report to the Ministry of Construction on housing information and the real estate market.
According to the report, real estate business activities in the first 9 months of 2023 grew by -8.71% compared to the same period. Previously, in the first 6 months of 2023, it increased by -11.58%, and in the first quarter of 2023, it decreased by -16.2%. Real estate business revenue decreased by 4.7% compared to the same period. Previously, in the first 6 months, it decreased by 8.3%, and in the first 4 months, it decreased by 14.6%.
The numbers show that the real estate market in Ho Chi Minh City is experiencing many difficult fluctuations, but the policies of the State as well as the local government have strongly impacted the real estate market when public investment disbursement increased, attracting many sectors.
According to the Ho Chi Minh City People’s Committee, in the first 9 months of 2023, there have been more than 1,100 real estate businesses established. Foreign investment in real estate business activities, in the first 9 months of 2023, included 4 newly licensed projects with registered capital of $54.2 million, 11 projects with adjusted capital of $12.7 million, and 20 capital contributions or share purchases with a value of $5.3 million.
The total foreign investment in real estate business activities in the first 9 months of the year is $72.2 million. Previously, in the first 6 months, it was $131 million.
Although the real estate market has faced many difficulties at the beginning of the year and has regressed compared to 2021/2022, according to experts, there is still investment capital flowing into real estate, and business activities of sales and purchases are still happening at a secondary level.
For example, the Glory Heights project (located in the Vinhomes Grand Park urban area, Thu Duc city, Ho Chi Minh City) has nearly 2,200 out of a total of 3,200 apartments open for sale.
Nam Long Group has also launched 320 apartments in the Akara City project in Binh Tan district, and Khang Dien Group is currently selling The Privia project in Binh Tan district at a price of only 48 million VND/m2.
In neighboring areas of Ho Chi Minh City, many projects have been launched for sale, such as Akari City, Eco Village Saigon River, Fiato City… (Dong Nai); Picity Sky Park project, Bcons Polaris, The Emerald 68, Astral City… (Binh Duong). In Long An, the Waterpoint urban area of Nam Long Group is preparing to launch.
Duong Thuy Dung, CEO of CBRE Vietnam, said: “The real estate market in the South, such as Ho Chi Minh City and surrounding provinces, has experienced positive changes in liquidity compared to the first half of the year.”
Although in 2023, the housing market still has a large gap in supply and absorption rates compared to previous years, investors cannot ignore the positive signals of the market.
“In the last months of 2023, the housing market in Ho Chi Minh City welcomes over 3,000 apartments and 85 ready-built houses for sale, including projects that have been reserved since the beginning of 2023. This is one of the happy signals for the market when a series of businesses introduce their products for sale, while finding their direction and redefining sustainable development to overcome difficulties,” Dung shared.
Expectation on policies to stimulate market demand
According to some experts, the real estate market in the last months of 2023 and in 2024 will experience more noticeable fluctuations, due to the government’s policies in removing market obstacles and difficulties. In addition, lowering interest rates is an opportunity for people to access loans and realize their dreams of owning a home.
Currently, at the end of 2023, interest rates have decreased to the level of 2022, inflation is under control, and the economy is warming up, along with the determination of the government and the efforts of businesses. The government and ministries have taken many actions to remove difficulties for the real estate market. Therefore, many real estate investors have returned to the market, constantly seeking opportunities in potential localities. Some markets in some provinces have shown signs of brightness.
Căn Van Luc, an economic expert and member of the National Financial, Monetary Policy Advisory Council, also predicted that from the fourth quarter of 2023, the recovery momentum of the market would become clearer. This is also the time when policies to remove obstacles for the market will be effective. However, the time to restore confidence, health of investors, businesses, and the overall economic picture will take longer.
Le Dinh Lang, Director of Song Long Construction and Real Estate Trading Company, said: “The adjustment of development policies by the government and the State Bank of Vietnam in the real estate sector is good news for businesses. In particular, access to low-interest loans is a premise for both investors and developers to develop together. While the real estate market is facing many difficulties in capital sources, early adjustments from functional agencies are the most necessary prerequisites for a more stable market,” Lang commented.
Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said: “Real estate in Ho Chi Minh City and nationwide has faced many difficulties, and the government has understood and resolved these difficulties for businesses through newly issued Decree No. 08 and Resolution No. 33. In addition, with the implementation of a credit package of about VND 120 trillion for investors and homebuyers of social housing projects, worker housing, reconstruction projects, and redevelopment of old apartments, with interest rates during the preferential period 1.5-2% lower than the average long-term loan interest rates of state commercial banks… is considered an action to “untie the knot” for the recovery and development of the real estate market in the near future.”
Moreover, if the state policies are still applied comprehensively, creating conditions for businesses and people… banks continue to provide credit for real estate projects that meet legal conditions, have the ability to consume products, and ensure debt repayment plans, especially projects for social housing, worker housing… then in 2024, the real estate market will quickly recover and move towards sustainable development, supply and demand, and genuine real estate products, targeting the right people with needs.
In conclusion, as economic expert Can Van Luc and Chairman of the HoREA Le Hoang Chau have predicted, the real estate market in the South is gradually recovering and is expected to experience positive changes in the coming years. The government’s policies to stimulate the real estate market, along with efforts from both businesses and investors, will contribute to the sustainable development and growth of the market in the future.
