Which real estate segment should you invest in at the end of 2023?

VTC News•03/09/2023

According to the Vietnam Real Estate Brokers Association, in the second quarter of 2023, the number of apartment transactions increased by more than 30% compared to the first quarter of 2023, reaching approximately 3,704 transactions. Notably, 80% of successful transactions were for apartment projects with clean legal status, developed by reputable investors.

According to data from the Real Estate Brokers Association, the transaction volume for high-end apartments reached 40%, mid-range apartments reached 35%, and affordable apartments reached 1% (due to the extremely scarce supply of affordable apartments).

The Q2/2023 real estate market report by Batdongsan.com.vn also classifies apartments as a product group that maintains its value due to meeting the needs of actual housing.

According to Batdongsan.com.vn's consumer sentiment survey, apartments ranked second (after land plots) as the type of real estate consumers most want to buy in the next year.

The apartment market continues to attract investors.

49% of the real estate brokers surveyed also rated investing in apartments for sale or rent as the most promising activity in 2023.

The driving force behind the price increase of apartments in particular and Vietnamese real estate in general stems from several factors such as limited supply, gradually increasing demand; rapidly developing infrastructure; increasingly完善 land management policies from the State; and improved economic growth rates over the years…

Similarly, the Dat Xanh Services Institute for Economic, Financial, and Real Estate Research (DXS – PERI) conducted a survey on the types of real estate that received the most customer interest in the second half of 2023.

The survey results show that apartments were the overwhelming choice with 73%, followed by low-rise houses at 15%, land plots at 10%, and resort properties accounting for only 2% of responses.

Regarding the price range of apartments that customers are interested in, DXS - FERI's survey found that 82% of responses indicated a preference for apartments priced under 2.5 billion VND, 13% for apartments between 2.5 and 3.5 billion VND, and only 5% for apartments above 3.5 billion VND.

This survey result shows that customer preferences are shifting significantly towards real estate products with affordable prices that meet actual housing needs.

Assessing the potential of the apartment segment, Mr. Tran Quang Trung – Business Development Director of OneHousing – said that segments serving the real housing needs in major cities are still attracting a lot of attention due to the limited supply, typically apartment units.

This is the time for medium- and long-term investors to select good assets to buy. In fact, both the selling and rental prices of mid-to-high-end apartments in Hanoi are still steadily increasing.

A recent report by Colliers shows that primary market prices in Hanoi are recorded in the range of US$2,500 – US$4,000/m2. In late 2023, apartment prices are expected to increase by 4-7% compared to 2022, thanks to developers enhancing the positioning of their projects and prioritizing prime locations.

Sharing the same view, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, assessed that the Hanoi apartment market is currently basically "short" of new supply and new projects compared to actual demand.

Therefore, transactions and selling/rental prices in this segment have increased sharply recently. Besides buying for personal use, the market has also seen a strong trend and wave of apartment purchases for investment purposes. This trend is expected to continue strongly in the future.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, commented that in the context of a difficult market, products that meet real needs, such as apartment buildings, are a bright spot in the real estate market.

The rapid pace of urbanization has led to continued growth in demand for housing, thus creating significant potential for apartment projects. This type of housing will be a crucial driving force in regaining growth momentum, contributing to a warming real estate market towards the end of 2023.

Mr. Nguyen Chi Thanh - Vice Chairman and General Secretary of the Vietnam Real Estate Brokers Association - also believes that positive signals from the Government 's regulatory policies for the real estate market have helped customers search and inquire more about segments that meet their real needs, especially apartment buildings.

“ Bank interest rates are showing signs of decreasing, and the government and relevant ministries are actively working to remove obstacles in the real estate market… All these factors are positively impacting the psychology of homebuyers ,” Mr. Thanh emphasized.

Ngoc Vy

Source