Real estate prices increased by nearly 60% in 5 years

DNVN - Vietnam's real estate prices increased by 59% over the past 5 years (2019-2024), much higher than many other countries such as the US 54%, Australia 49%, Japan 41%, Singapore 37%...

Need to overcome challenges

At the conference "Vietnam Real Estate (VRES) 2024" organized by Batdongsan.com.vn on December 3 in Hanoi, Mr. Bach Duong - General Director of technology platform Batdongsan.com.vn said that the Vietnamese real estate market over the past 30 years has gone through five stages: beginning (before 2009), shaping (2009-2012), growth (2013-2019), fluctuations (2020-2021) and challenges (2022-2024).

In the initial phase, after Vietnam joined the WTO, FDI capital inflows into real estate increased sharply, creating momentum for the development of many large enterprises and new projects. However, the subsequent Formation phase witnessed a difficult market as credit was tightened, inventories increased and consumer confidence declined.

Since 2013, with the promulgation of three important laws (Land Law, Housing Law and Real Estate Business Law), the market has entered a period of growth, achieving many positive improvements. However, in 2020-2021, the COVID-19 pandemic caused strong market fluctuations, although the supply of high-end real estate continued to increase.

Mr. Bach Duong - General Director of Batdongsan.com.vn.

From 2022, the market faces many major challenges in terms of macro, legal and financial aspects, requiring businesses and brokers to improve their reputation to meet the increasing expectations of consumers.

To support the market, Batdongsan.com.vn has implemented solutions such as price history features, verified listings and the Vietnam Real Estate Brokerage Awards (VREAA), to enhance transparency and build trust.

"After 30 years of development, the Vietnamese real estate market has matured and become more sustainable, but still needs to overcome current challenges to continue to develop stably," Mr. Duong said.

Looking back at the market over the past 30 years, Mr. Bach Duong - General Director of Batdongsan.com.vn said that macro fluctuations have always played an important role in forming cycles of the Vietnamese real estate market. Through many ups and downs and changes, from the first steps, the market has continuously improved, refined and moved towards sustainability. The market needs many products and services that closely follow the needs of consumers to develop.

“The Vietnamese real estate market has gone through a journey from quantity to quality, from the beginning to the more mature and stable “age 30”, but still needs to overcome existing challenges to perfect and stabilize,” Mr. Bach Duong shared.

Vietnam real estate prices exceed many countries

Emphasizing real estate prices, Mr. Nguyen Quoc Anh - Deputy General Director of technology platform Batdongsan.com.vn said that in 2024, the Vietnamese real estate market recorded a high level of interest in issues of selling prices and difficulties in owning real estate. Data from Global Property Guide shows that real estate prices in Vietnam are growing rapidly compared to the world.

Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn technology platform.

Specifically, Vietnam's real estate price growth in the past 5 years reached 59%, higher than many other countries such as the US (54%), Australia (49%), Japan (41%), Singapore (37%)... The high price increase has caused real estate rental yields in Vietnam to be only 4%, while many other countries such as the Philippines, Malaysia, Thailand, Indonesia, the UK, Australia, and the US have real estate rental yields ranging from 5% - 7%.

The Deputy General Director of Batdongsan.com.vn pointed out three main factors affecting real estate prices in Vietnam: economy, management and society.

Economically, Vietnam has a GDP per capita growth rate of 34.8%, higher than the world average and developing countries. High inflation and a gradually stable interest rate environment also promote real estate investment demand. In addition, the proportion of accumulated assets in Vietnam's GDP (32.8%) is in the top 30 in the world, showing that real estate is an attractive investment channel with outstanding profit margins over the past 10 years: apartments increased by 197%, land increased by 137% from the first quarter of 2015 to the fourth quarter of 2024.

Regarding management, Mr. Quoc Anh commented that advanced countries use real estate tax to regulate the market and optimize revenue. However, Vietnam needs to consider carefully to avoid shortcomings when applying this policy.

Social factors also play an important role. Urbanization, changes in family structure, and a culture that prioritizes real estate ownership all drive housing demand. However, buying a home remains a major challenge, especially for young people. Compared to 2004, the time needed for the 9x generation to own a 60m² apartment in 2024 is 25.8 years of income, a significant increase as apartment prices increase to VND3 billion.

However, real estate is still prioritized by Vietnamese people due to its high yield, stability and social value, and is an important asset for families and future generations.

From a macro perspective, senior economist Can Van Luc said that real estate businesses must be determined to restructure; focus more on areas of strength, control risks of cash flow, interest rates, debt maturity... to overcome financial difficulties. Strive to reduce prices or at least stabilize real estate prices in some projects and segments, accept smaller but sustainable profit margins of real estate prices.

In addition, it is necessary to join hands to promote social housing, in which businesses need to proactively learn about and approach programs; diversify capital sources and products to bring real estate prices to a more reasonable level.

Minh Thu

Source: https://doanhnghiepvn.vn/kinh-te/bat-dong-san/gia-bat-dong-san-tang-gan-60-trong-5-nam/20241203115915020