Has real estate bottomed out 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 , in the third quarter, the real estate market showed signs of recovery. The demand for buying apartments increased by 1% and for renting increased by 6% compared to the previous quarter. Apartments priced at 2-4 billion VND were searched the most; in big cities, there were signs of good absorption, concentrated in the segment of apartments and houses priced under 10 billion VND in the central area.

Real estate market has less bad news than before

Prices in both the primary and secondary markets increased. Primary prices increased by nearly 7% quarter-on-quarter and 14% year-on-year to about VND50.8 million/ ^m2 ; average prices in the secondary market reached about VND32 million/ ^m2 . Secondary prices increased in all districts of Hanoi .

The asking price for affordable apartments in Hanoi ranges from 25 to 35 million VND/ ^m2 , mid-range apartments from 30 to 50 million VND/ ^m2 , and high-end apartments from over 50 million VND/ ^m2 . In Ho Chi Minh City, apartment prices in both the primary and secondary markets have increased.

Regarding the removal of legal obstacles in real estate, Mr. Nguyen Van Sinh, Deputy Minister of Construction, said that recently, the Government has issued a series of documents, decrees, and resolutions such as Decree 58/2023, Resolution 97 with the content of continuing to assign the Ministry of Construction to preside over and coordinate with relevant agencies and localities to implement Resolution 33 of the Government on a number of solutions to remove obstacles and promote the development of the real estate market.

In addition, according to Mr. Sinh, the State Bank also has a series of supports such as Circular 10/2023 on suspending the implementation of some contents of Circular 39/2016. Or recently, on August 10, 2023, Prime Minister Pham Minh Chinh chaired a conference to remove obstacles and difficulties for the real estate market.

People with real needs are interested in real estate.

According to a survey, the real estate market has recently shown positive signs, with street-front houses being sought after more by investors, and apartments in inner-city buildings also increasing in price due to increased demand, while there is little new supply.

Inner-city residents are tending to look to buy houses in the suburbs, especially houses in new urban area projects.

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

Mr. Nguyen Van Truong (45 years old), owner of a real estate trading floor in Hoai Duc district, said that when more customers are interested, the selling price will naturally increase.

"The increase in prices of subdivided land, townhouses, and villas in the suburbs has not been much in the past because the real estate market is still facing many difficulties. However, the situation has improved a lot now, bad news affecting real estate has also decreased, the market is waiting for good news to recover," said Mr. Truong.

According to Mr. Truong, in the second quarter, the selling price of townhouses in the Phoenix Garden Eco-Urban Area in Dan Phuong District was just under 40 million VND/ ^m2 , now it has increased to about 40 - 41 million VND/ ^m2 . Or the price of villas and townhouses in some new urban area projects in Hoai Duc District also increased by 1 - 5 million VND/ ^m2 compared to the second quarter. The reason is that there is no new supply, plus the infrastructure of these areas is being heavily invested in to "upgrade" to districts.

Where is the bottom?

Regarding the real estate market, experts generally believe that the market has passed its most difficult time and is expected to recover from early 2024.

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

Economist Can Van Luc commented that "there are more opportunities than challenges" because real estate has overcome the most difficult period. According to Mr. Luc, the market has recovered about 20-30% compared to the golden time of 2021. The State Bank has reduced operating interest rates four times and gradually reduced lending interest rates. In addition, many signals in "unprecedented" 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 a cycle.

"After a period of near-freeze, the market is showing certain signs of recovery and if transactions come from real demand. In the coming time, when policies have been implemented, the market recovers more clearly, and planning becomes clearer, prices are likely to be pushed up again," said Mr. Dinh.

Chung commented, Mr. Nguyen The Diep, Vice President of Hanoi Real Estate Club, said that it is not clear where the bottom of the market is. But recent signals show that the market is warming up again.

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