On the morning of December 12, the Vietnam Real Estate Conference (VRES 2023) with the theme "Shaping the Future" was held in Hanoi, organized by Batdongsan.com.vn.
People choose banks as a "shelter" for their money.
Sharing at the Conference, Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn said that Vietnam's real estate market is still facing many challenges when the economic growth in 2023 has not reached the target, the GDP forecast in 2023 is only about 5%, while the growth target set at the beginning of 2023 is 6.5%.
Besides, the capital market has not fully recovered, many interest rates have decreased but the amount of deposits is still increasing.
“The decline of the capital market is reflected in the sharp decline in the amount of corporate bonds issued. As of October 11, only more than VND50,000 billion worth of bonds were issued, while in 2021, the amount of corporate bonds issued to the market was nearly VND300,000 billion,” Mr. Quoc Anh said.
Meanwhile, Mr. Quoc Anh said that the reality is that people's deposits in banks are still increasing strongly. In the first 9 months of 2021 alone, the growth of residential deposits increased by only 2.92%, but by the first 9 months of 2023, the growth of residential deposits increased by 9.95%.
The expert said that this shows that consumer confidence in the real estate market has not yet recovered strongly, people still choose to save money in banks to preserve their assets. That is why the transaction volume and business activities have not improved.
Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn spoke at the Conference.
According to information from the Real Estate Brokerage Survey in the fourth quarter of 2023 by Batdongsan.com.vn, 43% of surveyed brokers said that market transactions are still decreasing sharply. This figure in the third quarter of 2023 was 46%, the second quarter of 2023 was 44% and the first quarter of 2023 was 54%.
The actual market situation is also reflected in the fact that pre-tax profits of some listed real estate companies such as Nam Long, Khang Dien, Cenland, Novaland , Dat Xanh Group, and Phat Dat also decreased sharply, with the decrease ranging from 5 to 97%.
However, Mr. Quoc Anh said that the market is still recording some positive bright spots when public investment disbursement as of November 2023 reached 65.1%, while in the same period last year, public investment disbursement only reached 58.3%.
Along with that, the two draft laws related to the real estate market, the Housing Law and the Real Estate Business Law, were passed, also creating positive impacts on the real estate market.
Opportunities and challenges intertwine
Giving his perspective on the real estate market, Mr. Nguyen Quang Thuan - Chairman of FiinGroup said that there will be intertwined opportunities and challenges in 2024 for real estate businesses.
According to Mr. Thuan, capital mobilization activities of real estate enterprises are still facing many difficulties when the total amount of bonds due in 2024 is still large, up to nearly 400,000 billion VND.
Meanwhile, although the demand for real estate ownership among residents is still high, legal issues affecting the ability to complete projects and repay bank loans are still a big challenge for investors.
FiinGroup Chairman believes that only when investors accept price reductions, banks continue to reduce interest rates, and management agencies accompany people and businesses on a large scale, provide legal support, and create favorable conditions, will the market have an opening point.
Also sharing on this issue, Dr. Can Van Luc - Chief Economist of BIDV and Member of the National Financial and Monetary Policy Advisory Council assessed that the macro economy, the world economy and Vietnam are showing many clear signs of recovery. Accordingly, inflation is kept at a low level, legal problems are gradually resolved, planning is gradually completed, and policy effectiveness is promoted.
Dr. Can Van Luc commented that early 2024 will be a favorable time to make investment decisions in the real estate market, because interest rates have decreased and real estate prices have been reasonably regulated. Mr. Luc also emphasized that the real estate market is expected to flourish from the first quarters of 2024.
"Newly passed laws need time to "absorb" into policies, and violations of laws and regulations this year will basically be handled. At the same time, the economic and macroeconomic recovery of Vietnam and the world will also be clearer, so it is entirely possible that the market will recover in the first quarter of 2024," Mr. Luc stated his opinion.
Dr. Can Van Luc - Chief Economist of BIDV and Member of the National Monetary and Financial Policy Advisory Council.
Along with this viewpoint, the expert believes that, to anticipate real estate trends in the coming time, businesses need to continue to promote restructuring, including restructuring operations, products, markets, investment portfolios and projects.
Next, businesses need to be especially determined to overcome financial pressure, including all debt-related obligations. “On the one hand, negotiate to defer debt, on the other hand, restructure finances to ensure timely debt repayment. Even, if necessary, businesses can sell real estate at a lower discount to ensure cash flow,” said Mr. Luc.
Along with that, businesses need to be proactive in the greening and digitalization process, which is both an immediate solution and a long-term measure to develop a transparent and sustainable real estate market .
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