Experts warn of 'virtual fever' in Hanoi suburbs, many places increase prices without basis

The Vietnam Association of Realtors (VARS) has just released its real estate market report for the first quarter and forecast for the second quarter of 2024.

According to the report, the market on the outskirts of Hanoi and associated with industrial zones recorded an increase of 10-20%. However, the market also recorded some areas with the phenomenon of “unfounded price increases”.

The Brokerage Association warns that extreme caution is needed to avoid the formation of "virtual" fevers, which pose a risk of insecurity, while the market is still in the process of recovery.

According to VARS, the real estate market in the first quarter of 2024 has clearly recovered. For the housing segment, the supply in the first quarter of 2024 reached 20,541 products, of which 4,300 were completely new products, the rest were inventory from previous sales phases. Many real estate projects have started construction simultaneously, with a scale of tens of thousands of hectares, up to billions of USD, many real estate businesses have also begun to prepare for "product launch" plans.

The real estate market in the first quarter of 2024 has recovered.

In terms of transactions, there were 6,200 transactions recorded in the quarter, an increase of 8% compared to the fourth quarter of 2023 and double the same period last year. The absorption rate continued to improve, reaching nearly 31%, an increase of 5% compared to the fourth quarter of 2023 and 19% compared to the same period last year. Apartment projects priced under VND50 million/m2 are almost "sold out", while apartment projects in the luxury segment have a slower absorption rate. In Hanoi, the apartment segment is very busy.

Regarding selling prices, primary selling prices continued to maintain a stable trend with an increase of about 2-3% compared to the previous quarter. Low-rise projects and newly launched land plots have quite reasonable prices, while the apartment segment still maintains an upward price trend. The next phases of the apartment project have a selling price increase of 10% - 20% according to plan.

Regarding the land segment, VARS information shows that many areas have recorded a "sudden" increase in land transactions, especially in subdivided plots. More investors are "hunting" for land in the suburbs of large cities, localities with strong infrastructure development and high urbanization rates.

The successful transaction price in this segment has decreased by 20-30% compared to the peak, but has stabilized and there are no signs of price reduction. Compared to the fourth quarter of 2023, the price has increased by about 5%.

The resort real estate market welcomed 9,970 tourism - resort products for sale in the first quarter. Of which, more than 97% were inventory of previously opened projects, with only 5 new projects opening for sale, bringing 326 products to the market, down 64% compared to the previous quarter and down 60% compared to the same period in 2023.

Besides, market participants from businesses, brokers to customers and investors have had positive changes in psychology.

Specifically, for businesses, the market recorded 1,035 businesses returning to operation, an increase of 25.8% over the same period in 2023 and 2.3 times higher than in the fourth quarter of 2023.

The market also had 921 new businesses established, equal to 98% of the same period. Meanwhile, only 331 businesses completed dissolution procedures, down 2.9% compared to the first quarter of 2023.

Currently, 70% of investors with products that meet the conditions for sale are ready to launch. However, most investors in tourism and resort real estate projects have not yet kept up with the market's recovery process, because this segment still has a "narrow path to re-emergence".

For real estate brokers, 20-30% of brokers left the market before deciding to return; 30-40% of brokers said they would re-enter the market in the second quarter of 2024 when signs of market recovery are clearer.

Dr. Nguyen Van Dinh, Chairman of VARS, affirmed that the real estate market currently has enough factors ready to be a launching pad for the recovery process. These are the support from the upper levels, the foundations from the three most influential laws on the market, the determination of the subject, and the increasingly consolidated confidence of customers and investors.

According to Ms. Nguyen Thi Mien, Deputy Head of VARS Investment Promotion Department, customers and investors, after a long time of carefully observing every move and development of the market, this group of people has begun to clearly show their interest in the market again. However, this interest is done in a more methodical, considerate and calculated manner.

" Instead of deciding to pay immediately upon approaching, customers and investors are willing to spend time and money to check the legality and survey the field carefully before deciding. This also partly makes the average time to close a deal for real estate brokers longer, " said Ms. Mien.

Chau Anh

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