“The market is almost completely devoid of affordable commercial apartments.”

Residential real estate is "heating up".

In particular, the official effective date of August 1, 2024, for the Housing Law 2023, the Real Estate Business Law 2023, and the Land Law 2024, five months earlier than previously stipulated, has contributed to completing the legal framework for the real estate market and opening a new cycle for the market towards greater safety, health, and sustainability. Real estate segments, from residential and commercial to industrial real estate, are showing positive growth signs with many new projects being implemented.

The residential real estate market has begun to show signs of "heating up".

Presenting the Real Estate Market Report for the third quarter and the first nine months of 2024, Ms. Pham Thi Mien, Deputy Director of VARs IRE, stated that the residential real estate market has begun to show signs of "heating up".

Accordingly, the land auction story is hotter than ever, with auctions held "throughout the night," recording hundreds, even thousands, of people willing to "sleep and eat" to compete for a spot. The winning bids are also record-high, on par with land in projects with well-developed infrastructure.

The market's heated activity is further driven by the apartment segment, with prices continuously setting new high benchmarks in both the primary and secondary markets. High demand has resulted in thousands of apartment owners receiving frequent calls inquiring about selling their properties. Despite the rising prices, newly launched apartment projects are recording very good absorption rates.

Along with apartment projects, several newly launched low-rise projects by major developers have also recorded "record" booking numbers, despite increasingly high prices. Many units in prime locations are not only expensive, but buyers/investors also have to accept paying a premium to secure their purchase.

However, alongside the results stemming from actual supply and demand, the market has also shown signs of overheating. This is evident in land speculation, driving up housing prices, and the emergence of opaque real estate transactions. Many small-scale investors enter the market with the aim of short-term trading, causing real estate prices to be pushed up unreasonably high. The "overheating" phenomenon is also evident in the apartment segment, with increasingly high asking prices for resale apartments, facilitated by certain speculative groups.

These problems all stem from supply shortages, although the situation has improved.

Specifically, Ms. Mien stated that in the third quarter of 2024, the residential real estate market continued to record a supply of 22,412 products offered for sale, with approximately 14,750 new products launched, a decrease of 25% compared to the previous quarter, but an increase of 60% compared to the same period in 2023.

In the first nine months of 2024, the market recorded 38,797 new products offered for sale. Supply remained highly diversified, with 70% of new supply coming from the apartment segment. Products priced at VND 50 million/m2 or higher dominated the market. Affordable commercial apartments were almost entirely absent. Regionally, the North led in new supply with 46%, followed by the Central region with 29% and the South with 25%.

VARS' research data also shows that, although the supply is mainly in the high-end and luxury segments, the entire market recorded approximately 10,400 successful transactions in the third quarter, equivalent to an absorption rate of 51%. This reflects the market's interest in new real estate products, even though the majority of new supply is completed to high standards and investment costs, especially land-related costs, are increasing.

Transaction volume and absorption rate decreased by 25% and one percentage point respectively compared to the previous quarter, but increased by 80% and 28 percentage points respectively compared to the same period in 2023. Apartment transactions remained dominant, accounting for 71% of total housing transactions in Q3, with new apartment projects recording an average absorption rate of 75%. Some apartment projects in Hanoi even recorded absorption rates of up to 90% shortly after launch.

Apartment transactions remained dominant, accounting for 71% of total housing transactions in the third quarter.

The trend of developing smaller apartments to reduce overall property values, better suited to the needs and financial capabilities of single individuals and young families, is becoming increasingly evident. This type of property also boasts the best liquidity.

High selling prices are driving demand to "shift" to higher prices.

Overall, in the first nine months of 2024, the market recorded 30,589 successful transactions, 2.5 times more than the same period in 2023. Many new projects launched at the end of September, which began accepting bookings, also recorded a huge amount of interest and deposits.

Regarding prices, housing prices continue to remain high, both in the primary and secondary markets, especially in the apartment segment. This is due to the increasingly serious supply-demand imbalance, as supply, despite improvements, still struggles to meet demand. Furthermore, the majority of new supply continues to be built to high standards, resulting in increased investment costs, particularly land-related costs.

Housing prices continue to remain high in the Hanoi market.

Specifically, in the third quarter, primary market prices in Hanoi continued to rise sharply with no signs of stopping, while supply has been gradually improving. New projects, from low-rise to high-rise, mainly in the high-end and luxury segments, continued to receive strong market interest. This created momentum that kept secondary market apartment prices high, although liquidity has gradually stabilized after a period of rapid growth.

Demand for real estate, including both housing and investment needs, continues to shift towards suburban areas, provinces and cities surrounding the two special-city areas, and the secondary market with more affordable options. Apartments and houses priced under 3 billion VND are in high demand in Hanoi and Ho Chi Minh City.

Le Trang

Source: https://www.congluan.vn/vars-thi-truong-gan-nhu-vang-bong-hoan-toan-can-ho-chung-cu-thuong-mai-gia-binh-dan-post316639.html