Real estate at the beginning of the year: Positive picture in both supply and liquidity | Market | Finance

"Many positive signals" is the most mentioned phrase in the first quarter 2024 real estate reports of market research companies. In the first 4 months of the year, the real estate market picture has many bright spots, further strengthening the confidence of investors as well as real estate businesses.

Cash flow returns, liquidity improves

In the first quarter 2024 report of the General Statistics Office, real estate business activities recorded positive signals in terms of attracting investment capital and the number of real estate enterprises returning to the market. Accordingly, during the quarter, more than 900 new real estate enterprises were established. Newly registered capital for real estate reached 1.49 billion USD, ranking second in the total foreign investment capital registered in Vietnam. In addition, foreign investors also poured more than 460 million USD into the real estate market. This shows that real estate is still a potential investment channel, attractive enough for investors.

Waterpoint Urban Area

Many market research units also assessed that, compared to the beginning of 2023, the real estate market in early 2024 showed more positive signs in terms of both interest and number of listings. According to the real estate consumer sentiment index (CSS) report of Batdongsan.com.vn, the psychology of real estate buyers and sellers is no longer as cautious as in 2023. The real estate market sentiment index in the first half of 2024 increased by 3 points compared to the second half of 2023, thanks to the improvement in consumer satisfaction with the potential for real estate price increases, home loan interest rates and policies, and market situation.

According to a report by Batdongsan.com.vn, consumers' interest in searching for real estate has grown again in the first quarter of 2024, with 62% of survey participants willing to take advantage of the opportunity to buy real estate at a discount or with good policies.

The warming up of the market is most evident when the new supply launched to the market has grown significantly and the transaction rate is also stable. As the real estate market at the beginning of the year "warms up", brokers, trading floors and investors have started their business campaigns early so as not to miss the opportunity to reach a large number of potential customers.

Typically, the Hanoi market has just witnessed a scene of 5,000 people lining up to book a newly opened project. In addition, a series of large investors such as Vingroup , MIKGroup, Capitaland... have started to launch a series of projects to the market.

In the Southern region, after Tet, a series of products from investors such as Masterise Homes, Nam Long, Phu Dong... from Ho Chi Minh City to Binh Duong, Ba Ria - Vung Tau, Long An ... were launched on the market with significantly improved liquidity. According to the real estate market report of Ho Chi Minh City and neighboring provinces conducted by DKRA Group, in the first quarter of 2024, the apartment segment had a primary supply of about 12,967 units and a consumption of nearly 2,000 units. For the type of townhouses and villas, in the first quarter of 2024, the primary supply of Ho Chi Minh City and neighboring provinces was about 4,345 units, the consumption of this supply increased by 43%.

Along with that, real estate prices also continue to increase, the strongest in the apartment segment. According to batdongsan.com.vn, the selling price of apartments in Hanoi is close to that of Ho Chi Minh City, reaching an average of VND46 million/m2 in early 2024, approaching the VND48 million/m2 mark of Ho Chi Minh City.

Mr. Lucas Ignatius Loh Jen Yuh - General Director of Nam Long Group commented that the real estate sector in Vietnam is moving to a more "mature" stage, meaning it is not developing massively but has a "maturity" that requires a high level of meticulousness in product research and development from investors to meet the real needs of the market to help balance supply and demand. This is similar to what happened in Singapore, the US, China and other developed countries before.

In the future, the increase in land fund and housing supply will mark a new stage of competition among real estate developers. Enterprises will seek to attract homebuyers by diversifying their products, at which point aspects such as service, shopping experience and brand become important. For Nam Long Group, instead of competing purely on price, enterprises aim to create differentiation in terms of products and services, bringing lifestyles specific to customers in every segment we develop.

There is more motivation in the long term

Positive signals at the beginning of the year are opening a new growth cycle for the real estate market. Experts say that this result is thanks to the combined leverage from many factors such as reduced interest rates, open legal frameworks and unprecedented stimulus policies from major real estate investors.

Recently, the banking system has continuously lowered deposit interest rates to around 5%/year, and home loan interest rates have also decreased to only 5-10.5%/year. This helps people easily access financial leverage.

Akari City Urban Area

In addition to attractive interest rates, the legal framework for the real estate market is also gradually becoming more open. The removal of legal obstacles helps promote credit lending to real estate businesses and home buyers, unblocking capital flows as well as creating a legal corridor for market development.

In the bright spots of the market in the first months of the year, products that meet real housing needs with good quality in construction and utilities, meeting the needs of end users, and reasonable prices. At the shareholders' meeting held a few days ago, Mr. Nguyen Xuan Quang - Chairman of Nam Long's Board of Directors, commented that the current market opportunities for real estate businesses are quite good. The interest rate for home loans has decreased to lower than the interest rate before Covid-19, which can compete with interest rates in countries in the region. He also said that Nam Long's pre-sales in the first quarter reached about VND 1,160 billion, 5 times higher than the same period last year, proving that home buyers' confidence has returned.

Another important reason is that the market is still attractive internally. Mr. Lucas Ignatius Loh Jen Yuh assessed that the Vietnamese economy has quite a lot of potential and the real estate sector here is in the early stages of growth. A positive sign is the urbanization rate in big cities. This rate is about 38-40%, similar to the level recorded in China in the 2000s.

According to the General Director of Nam Long Group, with the current urbanization rate, the demand for housing, offices, shopping malls and commercial centers in Vietnam is very large. In addition, the number of industrial parks as well as important infrastructure for the logistics sector is still small. Infrastructure development will lead to the development of urban areas, opening up the possibility of attracting a large population. Therefore, cities like Hanoi and Ho Chi Minh City still have a lot of room for development, which means opportunities for the real estate sector.

In that context, Nam Long is orienting its product market focus in the 2024-2026 period to be affordable housing products and commercial real estate products serving the existing integrated urban ecosystem. Based on this foundation, it will begin to research other residential real estate product lines suitable for the "mature" market in the future. The company will also seek opportunities in other forms of real estate besides housing.

At the recent General Meeting of Shareholders, the Company also announced a fairly positive business plan with a sales target of more than VND 9,500 billion, net revenue of VND 6,657 billion, after-tax profit of VND 821 billion, and after-tax profit of parent company shareholders of VND 506 billion.

Source: https://diaoc.nld.com.vn/bat-dong-san-dau-nam-buc-tranh-tich-cuc-ca-ve-nguon-cung-va-thanh-khoan-196240429091740511.htm