Strong buying power
With a growing middle class and a younger population, housing demand in Vietnam is constantly increasing, especially in large cities. The Ministry of Construction said that the current urban population ratio is about 40% and will increase to 45% by 2030, so each year about 70 million square meters of urban housing must be added. In particular, two cities with high population attraction, requiring rapid increase in housing area, Hanoi and Ho Chi Minh City, will account for about 2/3 of the annual housing demand.
Besides, the habit of accumulating real estate is also the dominant mentality of Asian people in general and Vietnamese people in particular.
A recent survey by batdongsan.com.vn with 1,000 customers conducted in all 3 regions showed that nearly half of those who do not own a house want to buy a house within the next year. This number increases with the rich group. 79% of those who own 2 properties said they will buy more properties in the near future, the corresponding rate among those who own 3 properties is up to 87%.
According to Nguyen Quoc Anh, Deputy General Director of batdongsan.com.vn, it is estimated that the country currently has nearly 470 projects, equivalent to 300,000 apartments under construction or not yet licensed. However, in the whole year of 2022, only 19 projects were licensed and opened for sale, providing about 18,000 apartments. In the context of high demand but short supply, this person commented that the apartment price level in the two major cities has not decreased and is even continuing to increase.
“The buying pressure is always present, creating a natural support barrier on the real estate chart, making it difficult for actual transaction prices to decrease despite general fluctuations in the economy ,” said Mr. Hoang Anh, a long-time investor.
Most people who have money in hand are still interested in the idea of owning more real estate as a long-term "savings".
Important driving force of the economy
Vietnam's real estate market has begun to stagnate since the end of 2022 when credit room was tightened and private bond issuance encountered difficulties. However, the Government has recently taken a series of actions to support the market, especially removing legal difficulties and directing banks to lower interest rates. The fact that the Government has continuously held meetings to listen to the opinions of large real estate businesses is also a strong signal that the authorities want to find effective solutions to promote the market to develop in a positive direction, not letting real estate fall into crisis.
With the gradual recovery of real estate, experts believe that many sectors of the economy will also prosper. The reason is that real estate directly contributes 15% of Vietnam's GDP and has a spillover effect on 40 key sectors of the economy such as construction, banking - finance, securities, etc. According to a study by the Vietnam Real Estate Association, when the real estate industry increases by 1,000 billion VND, it will stimulate the production value of the remaining sectors by 1,192 billion VND; spreading the increased value by 311 billion VND.
In addition, the number of jobs in the real estate business and construction industry (mostly building real estate projects) in Vietnam accounts for nearly 10% of the total number of jobs (49 million in 2021). If we count all the jobs in the real estate ecosystem including: land fund development, construction, operation, renovation, upgrading and redevelopment, especially real estate developers, key operators... then the number is certainly much larger.
It can be said that a stable macro economy is an important driving force for the real estate market to quickly recover, contributing to increasing people's income and GDP in 2023. On the contrary, as a leading sector, real estate will always be interested in, promoted, creating a pulling force to develop the whole economy. That organic relationship keeps this market warm and housing prices will maintain an upward trend.
PV
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