Primary real estate market supply declines

Primary real estate market records significant decline in supply

According to a recent market survey by DKRA Group, in Ho Chi Minh City and its surrounding areas, the primary real estate market has significantly decreased in both supply and consumption in key segments. Specifically, the land segment in 2023 will welcome 22 projects with a supply of about 1,850 plots, down 73% compared to 2022, the lowest level in the past 5 years. Consumption reached about 751 plots, approximately 41% of the total newly launched supply, down 84% compared to the previous year. Transactions occurred mainly in product groups with prices of 12.9 - 14.9 million VND/m2 and common areas from 70 - 90m2.

Meanwhile, the land market in the vicinity of Ho Chi Minh City continues to hold a dominant position, mainly concentrated in Binh Duong , accounting for 47% of the total market supply. The primary price level recorded a decrease of 10% - 13% compared to 2022. The secondary market recorded a decrease of 13% - 17% compared to early 2023. However, this decrease occurred locally in the group of customers using loans, as well as in some large-scale projects with incomplete infrastructure and legal documents.

Also according to DKRA Group, the apartment segment recorded 126 primary projects for sale, about 22,071 units in 2023, down 32% compared to 2022, which is also the lowest level in the past 5 years. The supply for sale is mainly distributed in Ho Chi Minh City, concentrated in the East of Ho Chi Minh City and Binh Duong. Consumption reached about 9,664 units, equal to 44% of primary supply and down 56% compared to 2022. Primary consumption is concentrated in mid-range projects with prices from 40 - 55 million VND/m2 and completed legal procedures, fast construction progress, convenient connection to the city center.

In addition, the primary selling price level has not fluctuated much compared to the beginning of 2023. However, real estate project investors have also promoted the application of many policies on quick payment discounts, principal and interest grace periods, etc. to stimulate market demand. Meanwhile, secondary liquidity remains low, the secondary price level has decreased by about 3% - 8% compared to the end of 2022, mostly in projects that are in the process of completing legal procedures or are behind schedule in construction.

Similarly, the new supply of townhouses/villas in Ho Chi Minh City and surrounding areas recorded a sharp decline compared to 2022. In 2023, the market welcomed 907 townhouses/villas from 28 projects, down 87% compared to the previous year, with the localities with the deepest decline being Dong Nai , Long An and Ho Chi Minh City. The market's new consumption volume was very low, about 315 units, equivalent to 35% of new supply, only 8% compared to 2022. Transactions occurred mainly in the product group with an average price of 1.9 - 2.4 billion VND/unit, mainly concentrated in the first 6 months of 2023.

DKRA Group forecasts that the new supply of land plots in 2024 will continue to be scarce. Specifically, the new supply will fluctuate around 2,900 - 3,100 plots, mainly concentrated in Long An, Dong Nai and Binh Duong. In the apartment segment, the new supply is forecast to increase compared to 2023, fluctuating at 12,000 - 15,000 units and mainly concentrated in Ho Chi Minh City with about 8,000 - 10,000 units, Binh Duong with about 4,000 - 6,000 units, Dong Nai and Ba Ria - Vung Tau with about 300 - 500 units/locality. The supply and demand of the real estate market in early 2024 did not fluctuate much compared to the end of 2023 and is expected to improve from the third quarter of 2024 when legal policies are sufficiently "permeated" into the market, helping to remove legal obstacles, as well as the recovery prospects of the economy .

In the resort real estate segment, the supply of condotels is forecast to decrease compared to 2023, fluctuating around 800 - 1,000 units, mostly concentrated in Ba Ria - Vung Tau. Meanwhile, the supply of resort villas and resort townhouses/shophouses is forecast to be equivalent to 2023, fluctuating around 250 - 300 resort villas and 200 - 300 resort townhouses/shophouses, respectively; the overall market demand will continue to decline, lasting until the end of 2024.

In the townhouse/villa segment alone, new supply and demand are expected to increase slightly, reaching about 1,200 - 1,500 units. The markets of Long An, Dong Nai and Binh Duong may lead the new supply. The overall demand of the real estate market may improve towards the end of 2024. In particular, the group of products with completed legal procedures, projects with completed infrastructure, developed by reputable investors will receive much attention from customers. The primary selling price level will remain stable in 2024; at the same time, policies to stimulate the real estate market will continue to be applied by many investors.

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