Real estate continues to lead in investment yield

How will homebuyer psychology change in the next two years?

Based on big data and market research across development cycles, Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn - predicts that within the next two years, the Vietnamese real estate market may go through the following phases: reversal, exploration, consolidation, recovery, and stabilization. At each phase, buyers will prioritize different factors when choosing real estate.

Specifically, from now until the end of 2024, the market is still in a testing phase. Buyers prioritize certain factors such as meeting actual living needs, clear legal status, good financial support policies, and stable rental yields while optimizing various costs. At this stage, apartments attract significant interest and record the best liquidity among all property types.

Entering a consolidation phase expected to begin in Q1/2025, buyers and investors will feel more secure about financial and legal factors, but will still prioritize products that serve real needs and generate good cash flow. At this time, if monetary conditions are more favorable, high-cost properties such as detached houses and townhouses will gradually see an improvement in transaction volume.

Buyer psychology at each stage of the real estate market (Image: Batdongsan.com.vn)

From Q2 to Q4 2025 is predicted to be a period of resurgence, with people paying more attention to investment needs and price appreciation, and not placing as much emphasis on selling price and legal aspects as during the market downturn. This will be the time when land plots and villas gradually regain their advantages and have better liquidity. It is expected that from the beginning of 2026, the Vietnamese real estate market will enter a stable cycle, with buyers prioritizing investment opportunities in types of properties with high price appreciation rates, limited supply, but high demand.

Besides forecasting buyer and investor trends over the next two years, Batdongsan.com.vn also analyzes their short-term preferences through its Real Estate Consumer Sentiment Survey for the second half of 2024. According to the survey, market sentiment remains stable. Buyers are awaiting positive signals from the market, with lower interest rates compared to 2023 and new legal policies about to take effect creating a more favorable sentiment among the public.

According to experts at Batdongsan.com.vn, the government's proposal to allow the Land Law, Housing Law, and Real Estate Business Law to take effect from August 1, 2024, is a positive signal, making the legal framework clearer and accelerating the market's recovery. The effective implementation of these laws will promote more consistent and realistic land valuation, tighten requirements for developers in project development to ensure buyer rights, facilitate real estate ownership for overseas Vietnamese, attract more foreign investment, and enhance professionalism and transparency within the real estate brokerage community.

Key factors that drive homebuyers to make a purchase.

Furthermore, the demand for real estate remains strong, with the main target group in the coming period being young families, especially newlyweds. A survey by this unit indicates that 73% of married people without children plan to buy a house within the next year. While single people prioritize workspace when choosing real estate, married couples are most interested in amenities such as schools and shopping centers. The trend of seeking secondary market properties is increasing due to limited primary supply and high initial prices for primary projects.

A survey on consumer sentiment in the second half of 2024 also indicated that buyers prioritize searching for information on large listing sites and the official websites of developers. When considering a developer, they pay the most attention to financial strength, while when choosing a project, legal compliance is the top factor. When seeking assistance from real estate agents, buyers value expertise, experience, and attitude above all else, followed by brokerage fees.

Real estate remains the top performer in terms of returns among investment channels.

According to real estate market data for the first six months of 2024 from Batdongsan.com.vn, most investment channels recorded positive signs compared to 2023. Real estate remains the channel with the highest investment returns. As of June 2024, the average asking price of real estate increased by 24% compared to the beginning of 2023. Meanwhile, the VNIndex, reflecting stock price fluctuations, increased by 19%, the price of SJC gold increased by 17%, and the USD exchange rate increased by 8%.

As one of the leading localities in terms of price increase, Hanoi recorded a 32% increase in asking prices for private houses compared to the beginning of 2023, a 31% increase for apartments, and a 10-19% increase for land, villas, and townhouses. Meanwhile, asking prices for real estate in Ho Chi Minh City have remained almost unchanged over the past year and a half, except for apartments which saw a slight increase of 6%, while other property types have maintained the same price level.

Regarding market types, land plots and detached houses showed a certain recovery in interest and transactions in the first half of 2024. Specifically, interest in detached houses recovered by 87%, and interest in land plots recovered by 60% compared to Q1/2021. However, this is only a localized improvement in some areas, especially in the northern provinces.

Real estate remains the highest-performing investment channel.

In some northern provinces, such as Hung Yen , interest in land plots increased by 194%, and in private houses by 70%. Hanoi also witnessed a 75% increase in interest in land plots and a 48% increase in private houses. The level of interest and prices increased sharply in the suburban areas of Hanoi due to planning and auction activities. Specifically, in the first half of 2024, demand for land plots in Dong Anh, Gia Lam, Hoai Duc, Thach That, and Quoc Oai increased by 48% - 104%, leading to a 4% - 24% increase in asking prices compared to the second half of 2023.

Furthermore, apartments are the most vibrant type of property in the real estate market, especially in Hanoi. Research by this unit shows that the demand for apartments in Hanoi peaked in March 2024, increasing by nearly 60% compared to the end of 2023. Currently, although interest in apartments has cooled down, prices have not decreased. The asking price for apartments in Hanoi in May 2024 was on par with Ho Chi Minh City, reaching 50 million VND/m2. At the same time, apartments remain the most liquid type of property in the market; 48% of brokers participating in the Batdongsan.com.vn survey believe that apartments are currently in a strong growth phase.

Mr. Dinh Minh Tuan, Director of the Southern region of Batdongsan.com.vn, believes that currently, the apartment market shows no signs of a "bubble" because the factors creating this situation are inflated demand, with more investment demand than actual demand; prices being pushed up compared to the economy and other types of properties; and loose monetary policy creating conditions for capital constraints in the market.

Apartments are the most vibrant type of property on the market, especially in Hanoi.

Data from Batdongsan.com.vn indicates that compared to cities around the world, the difference between apartment prices and Vietnam's GDP is still not too high. It is estimated that to buy a 50m2 apartment in Bangkok (Thailand), it would take more than 47 years of income; in Manila (Philippines), it would take over 56 years; and in Kuala Lumpur (Malaysia), it would take nearly 17 years. In Hanoi and Ho Chi Minh City, people would need to spend about 14-15 years of income to buy an apartment of similar size.

“The population growth rate in the two major cities shows that the demand for apartments remains very high. The projected overall housing demand for the period 2021-2030 in Hanoi is 89 million square meters, and in Ho Chi Minh City is 107.5 million square meters. Despite this high demand, current apartment prices in Hanoi and Ho Chi Minh City are not excessively high compared to other cities worldwide. Meanwhile, mortgage interest rates are not expected to fall to low levels, as deposit interest rates have just been adjusted upwards. Therefore, there is no “bubble” in the apartment market; in reality, limited supply and high initial selling prices have caused the recent strong growth,” explained Mr. Dinh Minh Tuan.

Tran Thi My Nhat

Source: https://www.congluan.vn/bds-tiep-tuc-dung-dau-ve-loi-suat-dau-tu-nguoi-mua-dang-tham-do-thi-truong-post301219.html