Dr. Can Van Luc analyzed the factors that will drive the development of the real estate market in 2025. However, this expert also pointed out 6 reasons for the high housing prices in Vietnam.
Many key drivers help the real estate market recover.
Speaking at the 5th Spring Real Estate Forum with the theme "Real estate market in the new era" and the Ceremony to honor the leading real estate brand in 2024 - 2025, Dr. Can Van Luc, Chief Economist of BIDV analyzed the factors affecting the real estate market including: Macroeconomics; legal and supervision management; planning, urbanization and infrastructure policy; finance; supply - demand, price and trust; information, data, transparency.
According to Dr. Can Van Luc, in recent times, the main drivers helping the real estate market recover are that the world economic growth has basically been flat while Vietnam's economy in 2024 - 2025 has grown quite strongly. Along with that, the macro economy has been maintained stable, inflation has increased under control; interest rates in Vietnam have remained low; exchange rates and bad debts have increased under control; budget deficits, public debt, foreign debt, and the Government's debt repayment obligations... are within the threshold allowed by the National Assembly.
Next is the institutional breakthrough, the revolution in streamlining the organizational apparatus as the foundation and important driving force to enter the new era. Public investment and infrastructure policies are promoted. Compared to other countries in the region, public investment in Vietnam is equivalent to 7-8% of GDP, almost the highest among Southeast Asian countries. At the same time, financial obligations have passed the most difficult period; access to capital is maintained.
"With the policies and decisions from the Party and Government through laws related to land and housing being passed and put into practice, the Vietnamese real estate market is currently showing positive signs of recovery," said Dr. Can Van Luc.
Citing specific figures, this expert pointed out that this is demonstrated through a number of factors such as GDP of real estate business activities in 2024 increasing by 3.34% compared to 2023 and the construction industry also witnessed significant growth with an increase of 7.78% in 2024.
The supply of new commercial housing will also increase in the period 2021 - 2024. The tourism - resort real estate market still faces many difficulties, but condotels have shown positive signs.
Regarding land, the recent transaction volume has been very positive and has recovered much better than in 2021. The number of industrial parks nationwide has increased from 397 industrial parks (IPs) in 2021 to 431 IPs in 2024. Of which, the number of IPs in operation accounts for 71%, equivalent to 301 IPs. The occupancy rate of IPs also tends to increase.
However, the challenge is that the profits of listed real estate companies decreased by 1.5%; stocks decreased by 1.9% mainly due to a sharp increase in costs of 3.2%. Costs here may include land clearance costs, loans, etc.
Housing prices in Vietnam continue to rise, what is the cause?
The real estate market still has problems. Notably, the current high housing prices stem from many causes. In addition, the calculation of land use fees is stuck in many localities and projects.
In addition, there are still problems with site clearance, especially when investors have to negotiate with local people for small and medium-sized projects. M&A is still difficult because investors have to fulfill their financial obligations. Land use fee auctions are still inadequate (starting price, capacity of auction participants, sanctions...). The way to build social housing is still inadequate, and capital sources for social housing still need attention.
Analyzing more clearly the reasons for the increase in housing prices, according to Dr. Can Van Luc, he pointed out 6 reasons:
First, recent legal entanglements and fear of liability have caused supply shortages.
Second, high input costs (including land rent/land use, compensation - site clearance, financial costs, construction materials, construction investment...).
Third, supply and demand are still imbalanced: due to few project licenses, businesses mainly invest in the high-end housing segment, causing the average price level to increase, while the mid-range and affordable segments (including social housing) are scarce.
Fourth, the situation of "price inflation", "price manipulation", and "following the trend" still occurs, causing real estate prices to remain high and increase virtually compared to real values (including recent land auctions and social housing brokers).
Fifth, “speculation” is still common. According to a survey of 600 people in 2024 by Batdongsan.com.vn, 86% of real estate buyers hold their properties for less than 1 year.
Sixth, there is no real estate tax yet, while real estate transfer and rental taxes are quite low.
Source: https://baodaknong.vn/gia-nha-o-viet-nam-lien-tuc-tang-cao-nguyen-nhan-do-dau-243287.html
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