Real estate enters recovery cycle

According to a survey of 1,152 real estate brokers conducted by the Institute for Economic , Financial, and Real Estate Research - Dat Xanh Services (DXS-FERI) in March 2024, most respondents expect the real estate market to recover soon.

Demand for housing is increasing.

Specifically, 38% believe the real estate market will recover this year, while approximately 50% expect a recovery in the first half of 2025. At the time of the survey, about 13% of brokers who had quit had returned to the industry, and it is expected that 55% of those who had quit will return in the near future.

Apartments are attracting a lot of customer interest as the real estate market enters a recovery cycle. Photo: TAN THANH

The survey results also show that most customers at this time are those who need to buy a house to live in (58%), followed by those buying houses for long-term investment and rental (34%), and only a very small number are interested in short-term "speculation" (3%). The basis for their buying and selling decisions at this time lies in the availability of "cheap" cash flow, meaning low interest rates and many preferential policies from developers.

According to another survey by DXS-FERI, the apartment segment continues to be the market leader. Specifically, demand for apartments priced under 2.5 billion VND accounts for a high proportion (up to 68%), followed by apartments priced under 3.5 billion VND (22%).

Experts believe this is the time when all parties are ready for the "race" and to anticipate the new cycle of the real estate market. In this race, the group of developers plays a pioneering role, competing to launch new projects and increase supply to the market. However, not all developers are starting at the same time; foreign companies have already "left the starting line and are temporarily leading," while domestic developers and new entrants to the market are only in the "restarting" phase.

According to our observations, from the end of 2023 to the present, developers have continued to maintain favorable policies for products in their inventory from previous sales phases, but have gradually reduced incentives for products in new inventory due to higher demand from buyers for new projects.

Prices are unlikely to fall further.

Regarding market developments in the first quarter of 2024, Mr. Vo Huynh Tuan Kiet, Director of Sales at CBRE Vietnam, believes that 2024 is a pivotal year for the real estate market before new laws (amended Land Law, amended Real Estate Business Law, and amended Housing Law) related to this sector come into effect.

Because it's a pivotal year, both investors and customers are uncertain about what will happen, but prices in some segments (apartments, land plots, etc.) have already shifted to an upward trend due to various reasons such as the availability of cheap money, market expectations, and increased input costs for projects.

"In my opinion, those who need to buy a house to live in should buy early because prices are unlikely to fall further; if they hesitate, they will miss out on good locations. As for land plots, the new law tightens regulations on land subdivision, and the limited supply means prices are unlikely to fall," Mr. Kiet observed.

Mr. Luu Quang Tien, Deputy Director of DXS-FERI, also believes that from 2024, with the pressure of sharply increasing input costs due to new regulations, primary real estate prices are trending upwards. Hesitant customers and investors may miss the opportunity to buy real estate at good prices right at the beginning of the "wave". "Opportunities are always available for smart and decisive investors," Mr. Tien emphasized.

Dr. Pham Anh Khoi, Director of DXS-FERI, assesses that the real estate market is showing many positive signs and is on the path to recovery. He predicts that the market will gradually rise from its "U-shaped" bottom, and the speed of recovery will depend on macroeconomic and microeconomic factors, with market confidence remaining the most important.

According to this expert, the ideal scenario for the housing segment in Q2/2024 is a 30% - 40% increase in supply compared to the same period last year, floating interest rates of 8% - 10%, a 10% - 20% increase in selling prices, and an absorption rate of 40% - 50%.

"2024 is a pivotal year for the market to accumulate and prepare for a new development cycle. Each economic cycle follows the phenomenon of 'the new wave overtaking the old,' meaning that a series of established brands will decline or leave the market, while a series of new real estate brands will emerge, establishing their position in the new development cycle. At this time, those with strong resources will rise and break through strongly."

"After a four-year process of consolidation, only about 20% of businesses remain, most of which are well-known and have the potential to create real change for the entire industry in the new cycle," analyzed Dr. Pham Anh Khoi.

Apartment supply in Ho Chi Minh City continues to decline sharply.

According to CBRE, in the first quarter of 2024, Hanoi saw the launch of 2,300 new apartments and 30 new low-rise houses, an 11% increase compared to the same period last year. Meanwhile, the supply of apartments in Ho Chi Minh City was only 500 units, the lowest quarterly supply in the past 15 years, equivalent to only 17% of the same period last year.

Savills Vietnam's report also shows that the primary supply of commercial apartments, townhouses, and villas in Ho Chi Minh City in Q1 2024 continued to decline sharply by 35% compared to the previous quarter and by 28% compared to the same period last year, to 4,922 units, after 9 projects temporarily suspended sales due to incomplete legal requirements or adjustments to sales policies.

Apartment transactions were also sluggish, with only 1,116 units sold in the quarter, down 63% from the previous quarter but up 29% compared to the same period in 2023. Of these, Class C (affordable) apartments were the most popular, accounting for 61% of sales, followed by Class B (mid-range) apartments, which accounted for 37%.

Source: https://nld.com.vn/bat-dong-san-buoc-vao-chu-ky-hoi-phuc-196240418193642831.htm