In 2024, will the apartment market "reverse" and recover?

According to reports from real estate research companies, in the third quarter of 2023, the market is still in a sluggish trend. Previously "hot" segments such as land, apartments or low-rise houses are all "quiet".

In the apartment segment, supply is increasingly scarce, especially the affordable apartment segment is almost "extinct", no longer attractive enough for investors.

However, Ms. Duong Thuy Dung, CEO of CBRE Vietnam, assessed that the mid- and low-end apartment segment will have the first upward movement around the third quarter of 2024.

Many experts believe that 2024 will be the year of apartment recovery, expected to fall in the first quarter of 2024 and at the latest in the second quarter of 2024, the trend will reverse. (Photo: LD)

Regarding supply, Ms. Dung said that because the supply of this segment is very low, there will be signs of recovery in supply, buyers will have more choices with apartment projects, especially when many investors are actively launching projects with prices close to real buyers.

For high-end and luxury apartments, the quality of products/projects will be improved to meet the needs of customers who are willing to pay. A new trend with more stringent criteria in choosing housing has been formed after the impact of the Covid-19 pandemic and the recent market downturn.

Accordingly, customers in this segment demand more in terms of quality, especially green and safe factors, associated with long-term benefits for residents' health.

“Thus, in the recovery state of the market to enter a new cycle, buyers will have more choices. In the coming time, quality supply will increase when the market witnesses the emergence of projects that focus on serving the health of buyers, while at the same time, the scale, amenities, and utilities are also higher,” said CBRE experts.

Regarding selling prices, in the primary market, the selling price level will not decrease but the price increase rate is not too high, only below 10% for each segment and each area of ​​the project. Because in the structure of products offered for sale in the coming time, the proportion of mid-high-end apartment supply may still account for the majority of the total product basket. Thus, the selling price level will be at an average of 7 - 10%/year.

In the secondary market, although the market has been very difficult recently, liquidity is temporarily reduced, but in the medium and long term, prices are still growing strongly. Because currently the real demand of home buyers is still high in both Hanoi and Ho Chi Minh City. Meanwhile, the supply to supply the market is scarce.

In addition, another reason why the selling price level in 2024 remains high is because investors increasingly focus on project and product quality.

On the other hand, in areas with good infrastructure support, real estate in that area will have good price increases. For example, in Ho Chi Minh City, there is the eastern area thanks to the Metro line, and in Hanoi, there is the Vinh Tuy bridge in the eastern area, or the West Lake area has the Lotte Mall project, the real estate value in these areas will immediately increase.

In terms of liquidity, in the last months of 2023, market liquidity will improve compared to the first half of the year.

In fact, some projects offered for sale last July had absorption rates of up to 80 - 90%.

Entering 2024, the absorption rate in the apartment market will remain at a positive level. Because the supply in 2024 will not have too many expensive or luxury products, but there will be more products that are more suitable for people's budgets, and if the price is higher, the quality is also better, so people are willing to pay for such products.

Meanwhile, according to a previous survey conducted by batdongsan.com.vn, about 27% of brokers believe that apartments will recover in the fourth quarter of 2023; 42% believe that this type of property will recover in the first 6 months of 2024.

In general, this is the type that is predicted to lead the recovery trend of real estate. Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the South, said that the apartment market is likely to recover the earliest compared to other types, expected to fall in the first quarter of 2024 and at the latest in the second quarter of 2024 will reverse.

Source: https://www.congluan.vn/nam-2024-lieu-chung-cu-co-dao-chieu-phuc-hoi-post267759.html