By the end of 2024, will the real estate market escape the 'gloomy' situation?

The "waiting" mentality will be removed.

The Vietnam Association of Real Estate Brokers (VARs) believes that, on the basis of economic growth exceeding the set scenario, credit escaping the "gloomy" situation, loan interest rates remaining low, public investment disbursement continuing to be promoted... The fact that the 2024 Land Law, the 2023 Housing Law, the 2023 Real Estate Business Law and Clause 2, Article 209 of the Law on Credit Institutions will take effect from August 1, five months earlier than the previous decision, will certainly have a positive impact, contributing to promoting the recovery and development of the real estate market.

VARs commented: Vietnam's real estate market will grow positively in the late 2024. (Photo: TG)

When the laws come into effect, the "wait and see" mentality will be removed. Project development enterprises will start the race to untie the knot with the State management agency. Investors are more confident in launching their products. Investors are more confident, promoting the cash flow due at banks to flow into real estate. Brokers and brokerage service enterprises will actively improve their capacity, recruit, train knowledge, meet new regulations, etc.

VARs believe that, while waiting for the new laws to "absorb", the real estate market will continue to recover slowly and sustainably, with gradually improving results. By the end of the year, the recovery process of the real estate market will have clear progress. Recovery results will continue to be differentiated by segment and region, but with a more even level of differentiation.

Which segment will shine?

Regarding the housing segment, VARs forecast: Supply in the second half of 2024 will continue to improve, estimated to increase by about 20% compared to the first 6 months of 2024, mainly contributed by the high-end and luxury apartment segment with product quality and selling prices clearly recovering along with more low-rise products when large projects are completing the final stages to enter the market. Most of the newly opened subdivisions and projects come from projects in the suburbs, provinces/cities surrounding the 2 special urban areas.

Demand for housing will continue to remain high, along with investment demand recovering by about 30% compared to the beginning of the year and moving towards new markets with much room for price increases,... which will push the number of transactions to continue to increase.

According to VARS, transaction volume is expected to increase by about 20% compared to the first half of the year as supply is expected to only "bounce back" at the end of the year, still mainly contributed by the apartment type.

Liquidity in the secondary market has also improved and will have the most obvious change at the end of the year when the efforts of State management agencies and real estate enterprises are more effective. The number of "viewing" is high, the number of buying is also higher. With the primary supply of apartments, mainly luxury apartments increasing, the price level of apartments, in projects with prices around 40 million VND/m2 will continue to increase, but at a slower rate, about 100-300 million/apartment.

According to VARS, transaction volume is expected to increase by about 20% compared to the first half of the year as supply is expected to only "bounce back" at the end of the year. (Photo: SST)

Transactions and prices of villas/townhouses and townhouses will also improve across the board, especially in the secondary market, thanks to the previous recovery foundation and investors' expectations of higher profits. Land plots have escaped the "bottom" of price reduction, gradually returning to being the "king investment channel". However, investors only "hunt" for auctioned land, subdivided plots of land, in areas with completed infrastructure, and prices that are not too high.

The social housing segment also faces the opportunity to "reverse" when new regulations towards removing difficulties and obstacles for businesses and social housing buyers are effectively implemented; the 120,000 VND credit package is amended in a more preferential direction.

The industrial real estate segment continues to grow with the acquisition of land funds to develop industrial parks (IPs) by corporations. Sustainable IP models will also be promoted to develop more rapidly and prosperously, contributing to the development of a green and circular economy as advocated by the Party and the State. At the same time, the value chain will be increased, meeting demand and creating competitive advantages to attract sustainable investment capital flows.

The supply of tourism and resort real estate will continue to improve with more businesses "bravely" launching products, but in insignificant quantities because the general real estate market has not really improved.

Many projects are still on hold due to legal and cash flow difficulties. The main supply will be high-rise buildings, valued at less than VND5 billion. Condotel products will continue to lead the primary and secondary resort real estate market by creating a stable cash flow with not too high investment value. Especially driven by the development of the tourism industry as well as expectations for a more complete legal corridor. Meanwhile, the villa and resort shophouse segment will likely continue to have to compete with products being sold on the secondary market.

VARS predicts that, along with the market recovery, market participants will begin to "accelerate" their entry and promote business plans. The new laws will certainly bring positive impacts to the market but will also be a "filter" to eliminate incompetent participants from the game.

Accordingly, VARS believes that the new regulations will tighten real estate brokerage activities, eliminating "amateur" brokers who do not really want to stick with the profession for a long time.

In particular, regulations on land funds for developing commercial housing projects, removing land price frames, etc. will gradually filter out investors with weak capacity, finance, land funds, etc. from the real estate market.

In fact, in recent times, many successful enterprises in the manufacturing sector have "crossed over" to real estate investment with the expectation of super profits and then received "bitter fruit" because things did not go as expected. Up to now, a series of enterprises are still in the situation of "working and dying, not working and dying" due to inadequacies in the way of calculating land use fees, making it impossible for enterprises to foresee costs.

In the coming time, when the laws come into effect, the new land price list will be higher, which means higher land use fees, people will receive more compensation, and businesses will face greater pressure on available capital.

Therefore, VARS believes that in the coming time, with the new "playground", the market will only have a "place" for investors who do business systematically, have large land funds, financial resources, and the capacity to develop large-scale urban projects with synchronous infrastructure and utilities. At the same time, they have the ability to effectively take advantage of advantages to reduce investment costs.

"Together with the regulation on whether or not to have a bank guarantee, this will be the foundation to reduce risks and costs for future home buyers," VARs emphasized.

Source: https://www.congluan.vn/cuoi-nam-2024-thi-truong-bat-dong-san-se-thoat-canh-dieu-hiu-post305181.html