Has the real estate market hit rock bottom yet?

Positive signals from the market.

According to Mr. Hoang Hai, Director of the Department of Housing and Real Estate Market Management, Ministry of Construction , the real estate market showed signs of recovery in the third quarter. Demand for buying apartments increased by 1% and demand for renting increased by 6% compared to the previous quarter. Apartments priced between 2 and 4 billion VND were the most sought-after; in major cities, there were signs of good absorption, concentrated in the segment of apartments and houses priced under 10 billion VND in central areas.

The real estate market has seen less bad news than before.

Prices in both the primary and secondary markets increased. Primary market prices rose by nearly 7% quarter-on-quarter and 14% year-on-year, reaching approximately VND 50.8 million/ ^m² ; the average price in the secondary market reached approximately VND 32 million/ ^m² . Secondary market prices increased in all districts of Hanoi .

Asking prices for affordable apartments in Hanoi range from 25-35 million VND/ ^m² , mid-range from 30-50 million VND/ ^m² , and high-end apartments are priced above 50 million VND/ ^m² . In Ho Chi Minh City, apartment prices have increased in both the primary and secondary markets.

Regarding the removal of legal obstacles in the real estate sector, Mr. Nguyen Van Sinh, Deputy Minister of Construction, stated that the Government has recently issued a series of documents, decrees, and resolutions such as Decree 58/2023 and Resolution 97, which continue to assign the Ministry of Construction to lead and coordinate with relevant agencies and localities in implementing Government Resolution 33 on some solutions to remove obstacles and promote the development of the real estate market.

In addition, according to Mr. Sinh, the State Bank of Vietnam has also provided a series of support measures, such as Circular 10/2023 on suspending the enforcement of some provisions of Circular 39/2016. More recently, on August 10, 2023, Prime Minister Pham Minh Chinh chaired a conference to address obstacles and difficulties in the real estate market.

People with genuine needs have shown interest in real estate.

According to surveys, the real estate market has recently shown positive signs, with street-front houses being sought after by investors, and apartment prices in the inner city increasing sharply due to rising demand and limited new supply.

People living in the city center are increasingly looking to buy houses in the suburbs, especially in new urban development projects.

In Hanoi, districts such as Ha Dong, Hoang Mai, Nam Tu Liem, Hoai Duc, Dan Phuong, Dong Anh, Thanh Tri, and Gia Lam have recently begun to receive more attention from investors and those with genuine housing needs.

According to Mr. Nguyen Van Truong (45 years old), the owner of a real estate brokerage in Hoai Duc District, when there is more customer interest, the selling price will naturally increase.

"The increase in land prices for subdivided plots, townhouses, and villas in the suburbs hasn't been significant recently due to the difficulties in the real estate market. However, the situation has improved considerably, and there's less bad news affecting the real estate market. The market is waiting for good news to recover," Mr. Truong commented.

According to Mr. Truong, in the second quarter of this year, the selling price of townhouses in the Phoenix Garden ecological urban area in Dan Phuong District was just under 40 million VND/ ^m² , but has now increased to about 40-41 million VND/ ^m² . Similarly, the price of villas and townhouses in some new urban area projects in Hoai Duc District has also increased by 1-5 million VND/ ^m² compared to the second quarter. The reason is the lack of new supply, coupled with the fact that infrastructure in these areas is being heavily invested in to be upgraded to districts.

Where is the bottom?

Regarding the real estate market, experts generally agree that the market has passed its most difficult period and is projected to recover from the beginning of 2024.

Where the market bottom is is a question few dare to answer.

Economist Can Van Luc believes that "opportunities are outweighing challenges" as the real estate market has overcome its most difficult period. According to Mr. Luc, the market has recovered about 20-30% compared to its peak in 2021. The State Bank of Vietnam has reduced the policy interest rate four times, gradually lowering lending rates. In addition, many unprecedented signals in credit and fiscal policies have also supported the market.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that no one dares to answer where the bottom of the market is. From Mr. Dinh's perspective, the real estate market always has cycles.

"After a period of near-freezing, the market is showing certain signs of recovery, and if transactions stem from real demand, in the future, when policies are implemented, the market recovers more clearly, and planning becomes clearer, it is likely that prices will be pushed up again," Mr. Dinh said.

Sharing this view, Mr. Nguyen The Diep, Vice Chairman of the Hanoi Real Estate Club, said it is impossible to know where the market bottom is. But recent signs indicate that the market is warming up again.

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