The market is gradually warming up, prices cannot increase immediately; the reason why more than 30,200 houses in Ho Chi Minh City have stopped issuing pink books, 2 suburban districts of Hanoi are about to auction land, the highest starting price is more than 5.8 billion VND/lot... are the latest real estate news.
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The real estate market is progressing, "warmer" with liquidity. (Source: Screenshot/DT)
Do not use financial leverage.
Commenting on the real estate market in the coming time, Mr. Nguyen Duc Lap - Director of the Institute of Real Estate Research and Training - said that the market will soon recover liquidity, which is a good sign in the current context.
According to Mr. Lap, the market is currently developing, "warmer" with liquidity. As the trend continues, the market will gradually warm up, and there is no such thing as a recovery that immediately increases prices, in an explosive way, increasing several times in a row.
According to economic expert - Dr. Can Van Luc, real estate prices are unlikely to continue to decrease deeply or sharply, and a 3-5% decrease is considered a promotional decrease. Because our supply is very lacking and real demand for the housing segment still exists.
According to Mr. Luc, investors who buy houses, land, and even villas are people with money. And now they are willing to wait for prices to go up or go down before selling. Except for those who use too much financial leverage, now they are so frustrated that they are forced to sell, but not many.
Next, according to Mr. Luc, currently bank interest rates are starting to decrease, moreover, investors are launching promotional packages, support, and resolving legal issues very quickly, so it is worth paying attention to for those who plan to invest in real estate.
Although this is a relatively successful time to invest, this expert also recommends that due to high interest rates, investors should not use financial leverage, especially at the present time.
Why have more than 30,200 houses in Ho Chi Minh City stopped issuing pink books?
The Department of Natural Resources and Environment (DONRE) of Ho Chi Minh City has just reported to Minister of MONRE Dang Quoc Khanh on the results of the work of granting Certificates of land use rights, house ownership rights and assets attached to land (certificates) in the city.
According to the Department of Natural Resources and Environment of Ho Chi Minh City, from July 1, 2014, when the 2013 Land Law took effect, to July 2023, the unit has issued 1,516,557 first-time certificates to organizations with a total area of 119,883 hectares and 1,577,971 first-time certificates to individuals.
For 335 commercial housing projects, the total number of houses requiring certificates is 191,101. Of which, the Ho Chi Minh City Department of Natural Resources and Environment has granted certificates to 110,016 houses and 81,085 houses do not have certificates.
According to the Department of Natural Resources and Environment of Ho Chi Minh City, more than 81,000 houses do not have certificates for many reasons. However, there are 6 main groups of causes.
Specifically, 8,372 houses have had their investors submit applications for certificates to buyers and the tax authority has issued notices, waiting for buyers to pay taxes. 28,907 apartments belong to projects that have no problems but have a large number of apartments or investors are still submitting applications.
8,918 apartments belong to projects with problems related to real estate type; 4,653 apartments belong to projects with other problems.
19,958 units in 39 projects have had their certificates temporarily suspended due to waiting for the completion of additional financial obligations. 10,277 units have had their certificates temporarily suspended to serve the inspection and examination work.
According to Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City, to resolve 6 groups of causes to speed up the process of granting certificates for the above 81,085 houses, the Department of Natural Resources and Environment issued a plan in May 2023 with solutions linked to the implementation progress of each group of causes.
The Department of Natural Resources and Environment is focusing on implementing this plan.
Demand drops, HCMC real estate market remains sluggish
Savills Vietnam's Ho Chi Minh City Real Estate Market Report for the first half of 2023 shows that the housing market is in a sluggish period with low supply, declining demand and high selling prices.
In particular, buyers' cautious psychology is putting no small pressure on market liquidity.
According to research by Savills Vietnam, the average apartment price in the second quarter of the year reached VND125 million/m2. In that context, the product line of apartments under VND5 billion/unit, suitable for the financial capacity of the majority of people, still maintains its attractiveness.
Mr. Troy Griffiths, Deputy General Director of Savills Vietnam, said that in the first half of 2023, the market has not shown many signs of improvement due to limited supply mixed with buyers' concerns in the context of a difficult economy.
Savills data shows that in the apartment segment, new supply decreased by 86% year-on-year to 1,980 units, of which Q2 supply accounted for only 19%.
There was no new supply of Grade A, while Grade C accounted for 77% of the market share. Primary supply of 6,700 units decreased by 59% YoY; of which Grade C accounted for 45%, Grade B accounted for 35% and Grade A accounted for 20%. The average selling price of VND125 million/m2 net increased by 44% YoY due to high-priced Grade A and B inventory.
Ms. Huynh Thi Huong Giang, Deputy Director, Research & S22M Department, Savills Ho Chi Minh City analyzed that the average income of a household in Ho Chi Minh City is only about 15 million VND/month. Meanwhile, the average price of an apartment in a new project is currently 5.5-6 billion VND. The difference is up to more than 30 times.
According to Ms. Huynh Thi Huong Giang, with that income level, if people are able to save 40-50%/month, it will take several decades to be able to buy a house in case they do not use credit or do not have any support from relatives.
According to Savills research, apartment sales in the first half of the year reached 1,170 units, down 90% year-on-year, with more than 300 transactions in the second quarter. The absorption rate in the first 6 months of the year reached 17%, down 56 percentage points year-on-year. Class C attracted more buyers and accounted for 62% of sales. The product line of apartments under 5 billion VND met the needs of many buyers.
Projects with clear legal status, construction permits, and confirmed handovers account for 81% of sales. Investors apply payment programs of up to four years for buyers as well as interior voucher programs, savings accounts, gifts, rental programs, and financial packages to boost buyer sentiment.
No new villa and townhouse projects were recorded in the first half of 2023 due to difficulties for investors in raising capital, scarce vacant land and complicated legal procedures.
During that period, only 3 existing projects opened for sale 414 new units. Units priced above VND30 billion accounted for 78% of the supply and were mainly in Thu Duc City. Only 13% of the primary supply in Ho Chi Minh City was priced below VND10 billion/unit.
However, the absorption rate in 1H23 hit a 10-year low of 15%, down 57 percentage points year-on-year. The transaction volume in 1H23 reached only 158 units, down 74% year-on-year.
Savills Research assessed that high inventory and expensive new launches are challenging liquidity as primary prices increased 48% year-on-year to over VND300 million/m2 of land in the first half of the year. This year, some developers have offered rental commitment programs with fixed returns, extended preferential interest rates and extended payment schedules.
According to experts at Savills Vietnam, lending rates remained stable from April to June and are forecast to decrease by only 0.5 percentage points from July. This will continue to put pressure on buyers, especially in urban areas. Homebuyers and savvy investors are moving to neighboring provinces where primary supply is affordable and supported by improving transport infrastructure.
In the second half of 2023, Savills Vietnam forecasts that 8,450 apartments will be launched on the market, of which class B will account for 54%, class C will account for 39% and class A will account for 7% of the market share.
As for the villa/townhouse product line, it is expected that 500 units will be opened for sale from now until the end of the year.
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A corner of Ung Hoa district, Hanoi. (Source: TNMT Newspaper)
Two districts in Hanoi are about to auction land.
In Ung Hoa district, Ung Hoa district land fund development center coordinated with Lac Viet Joint Stock Auction Company to organize an auction of land use rights for 30 plots of land in Song Moi area, Hoa Xa commune.
Accordingly, the 30 auctioned land lots have a total area of 2,536.7 m2. The land lots have an area of 67.5 - 90 m2/lot.
Starting price from 12 - 16 million VND/m2, equivalent to each plot of land from 810 million VND to 1.44 billion VND. The total starting price of 30 plots of land is 31.132 billion VND.
The auction is held in the form of direct bidding at the auction and in the ascending price method.
The auction was held on the morning of August 12, at the hall of Ung Hoa District People's Committee.
In Chuong My district, the Land Fund Development Center in coordination with Goldsun Joint Stock Auction Company will organize an auction of 28 land plots on the morning of August 19.
Specifically, the auction of land use rights in Mai Sau Area, Quyet Tien Village, Huu Van Commune, includes 28 plots of land divided into 2 planning blocks: DG-01 with 17 plots and DG-02 with 11 plots.
The area of the auctioned plots ranges from over 104 – 208.6 m2/plot. Starting price ranges from 18.2 million to 31 million VND/m2; equivalent to about over 1.9 billion VND to over 5.8 billion VND/plot.
Also in this district, on the morning of August 12, at the hall of the People's Committee of Chuong My district, an auction of 20 land lots is scheduled to take place by the National Joint Stock Auction Company No. 5 in coordination with the Land Fund Development Center of Chuong My district.
Specifically, there are 11 plots of land located in Mieu 3 and Mieu 4 areas, Trung Vuc Trong and Trung Vuc Ngoai villages, and 9 plots of land located in Mieu 2 area, Trung Vuc Ngoai village, all in Thuong Vuc commune.
Plot area from 77.9 - 104.8 m2. Starting price from 23.2 million to 25.5 million VND/m2.
Notably, on the morning of August 12, there was also an auction of 2 plots of land in the service land area of Chuc Son town with quite high starting prices.
Specifically, the starting price for a plot of land with an area of 138.5 square meters is 35 million VND/square meter and a plot of land with an area of 163.3 square meters has a starting price of 44.2 million VND/square meter.
All auctions in Chuong My district are held by direct secret ballot at the auction, using the ascending price method.
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