That is the opinion of Mr. Pham Lam, Chairman of DKRA Group, Vice Chairman of Vietnam Real Estate Brokers Association (VARS) in a recent sharing session.
What are your expectations for the real estate market in 2024 when there were positive signals at the beginning of the year?
In 2023, I compared the real estate market to a “calico cat”, with more gray than bright spots, but 2024 is a more positive and optimistic year. Real estate is getting brighter and brighter, like going from dim to brighter.
If in 2023 the real estate market picture was fragmented, unpredictable and hard to predict, this year the picture is becoming clearer. I think from the second quarter of 2024 onwards, the real estate market signal will be positive.
However, the real estate market in 2024 is still in a cautious orbit, unlikely to explode like before. Because the world's volatile situation is still an unknown in terms of time.
What makes you confident that real estate in 2024 will get brighter and brighter?
Up to now, the market screening has been clear. The market takes a long enough time to screen all market participants: investors, project developers, customers buying for living, as well as investors, ...
Second, 2024 has somewhat clearly shaped the policy mechanism for the real estate market. The parties have a clearer view of the future direction, so they are more secure.
Third, after a period of waiting, listening and observing, the buyer has certain data about the property to make a decision.
In addition, the financial policy of borrowing to buy real estate with attractive interest rates is attracting many participants in the market.
According to Mr. Lam, the real estate picture from 2024 will be brighter and brighter.
So, in your opinion, amid the optimistic signals of the market, what should real estate businesses do to "overcome the slope" to go up during this period?
Previously, the real estate market operated but had not yet established a professional way of operating. Up to now, the market has changed towards more transparency, professionalism and sustainability. This factor is clearly shown in the drastic adjustment of the Law by State agencies. Changing and adding many new contents will be an important foundation for the real estate industry to develop further in the future.
For businesses in general, and DKRA Group in particular, to have the appropriate operational capacity in the new context, they cannot do it the old way anymore. That means, DKRA Group must proactively innovate comprehensively, equipping itself with various types of capacity to quickly adapt to the development trends of the real estate market in the coming period.
Specifically, 2023 is a very decisive year for the development of the entire Group. We restructure the entire business model, clearly separating the strategic service segments for development. This strategy is expected to be completed by June 2024.
In particular, DKRA Group develops 3 real estate service segments, including: DKRA Consulting - Research & Development Consulting; DKRA Realty - Marketing & Distribution; DKRA Living - Management & Operation. These strategic service segments will create strong momentum for the Group in the coming period.
All service areas are diversified to meet the necessary needs of the market. For example, the service area DKRA Consulting - Research & Development Consulting previously only stopped at one service group, but now we have expanded and diversified. In the future, this will be the key and main area of DKRA Group. The company will provide a complete solution for investors with service groups: market research, orientation of project development model ideas, calculation of investment efficiency, legal procedure consulting services, real estate finance, and solutions related to sales programs. At the same time, the company will also expand, innovate other service areas and methods to meet the increasing needs of the market in the future with the goal of optimizing costs, bringing high efficiency to investors.
In my opinion, after a period of market fluctuations and many challenges, real estate businesses now need to clearly define long-term development goals. This is the stage for businesses to "gain momentum" to catch up but in a cautious state, prioritizing sustainability.
It is undeniable that many real estate businesses have gone through extremely difficult times recently. DKRA Group itself is not out of that common vortex of difficulties. In the coming time, the company may continue to have to adjust in all aspects to stay close to market realities.
However, for DKRA Group, we see that there are still opportunities in difficulties. Although the market is still challenging, we believe that with the right solutions, DKRA Group will easily turn all of this into opportunities when the market enters a recovery phase.
Has consumer confidence really recovered enough for businesses to be confident enough to "fight" the market?
It must be understood that, up to now, the confidence of home buyers has not been lost, but they just do not know where to put it in the right place. In the past, buyers spent a lot of time observing and learning, not completely losing confidence in the market.
After the stage of screening and carefully researching the product, project legality, investor capacity, sales mechanism, etc., customers can make comparisons and make decisions.
Recently, there have been many real estate projects that meet criteria such as good products, attractive sales policies, reputable investors, etc. that still have liquidity. In fact, the trust of buyers has a resonance and spillover effect. When the project ensures factors that are beneficial to buyers, demand will increase. Real estate businesses themselves must strive to create value for buyers to place their trust in.
However, demand is still generally slow while there are so many advantages for real estate at this stage, why is that, sir?
In the real estate market, there are many types of customers participating. Their levels, views on the market, and segments are also different. According to my observation, real estate with standard legal status in the secondary market, good price, buyers are still willing to pay.
The psychology of investors participating in the market is also different. "Shark" investors, if they like the property and have good finances, will buy it immediately. There are groups of investors who, even though they have the finances, if the property does not suit their "taste", they still do not put money down. Or for real buyers, if they have the finances and the property ensures a good living environment, they will buy; but there are groups who, even though they have high demand but do not have enough finances, continue to wait for policies and incentives...
The market is currently divided into many different customer groups. Their “taste” for buying real estate is also different. Even on the same route and area, there are projects that sell very well, while others do not. Obviously, real estate today must be suitable for the target audience, financial capacity and practical needs. The transaction signal is gradually improving, but it does not mean that the real estate picture is bright for the entire market. Some segments have bright spots, while others are still very difficult.
In your opinion, which segment or region is the market opportunity leaning most clearly towards?
In recent years, the East of Ho Chi Minh City (including Thu Duc City, Binh Duong , Dong Nai, Ba Ria - Vung Tau) has been an important area in terms of both supply and demand. This year, the market balance is somewhat tilted towards the West of Ho Chi Minh City (including Long An). In the near future, there will be many real estate projects participating in the Long An market. Thus, real estate in the East of Ho Chi Minh City will continue to maintain and explode, while the West of Ho Chi Minh City will be a new bright spot in the real estate market from 2024 onwards.
In terms of segment, land and houses attached to land are still products that many people are interested in storing long-term assets. However, supply is increasingly scarce, while the demand and value of this segment are constantly increasing.
Along with that, affordable apartments with prices of 2-3 billion VND/unit have great opportunities in the near future. This type meets the real housing needs (living, renting) and is easily accessible to many different customer groups.
Currently, real buyers still account for a high proportion of transactions. The market balance may adjust by the end of the year as investors return. When the market is active, many investors will participate.
In general, the real estate market opportunities from 2024 are quite clear. At the beginning of the year, many companies were busy implementing sales and introducing projects. Some projects had quite good bookings and deposits.
However, the nature of the real estate market this year is still cautious, not booming.
Thanks for sharing!
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