Experts Anticipate Early Recovery of Property Market in the Upcoming Year
According to analysts, the property market has successfully overcome its most challenging phase and is expected to recover from early 2024. At the Autumn Real Estate Forum in Hanoi, Can Van Luc, chief economist at state lender BIDV and a member of the National Financial and Monetary Policy Advisory Council, expressed optimism, stating that the real estate market now presents more opportunities than challenges. This positive outlook is attributed to the central bank’s four interest rate reductions, which have led to lower lending rates. Additionally, supportive measures such as debt restructuring, preferential credit for social housing, and tax breaks have aided businesses and individuals in overcoming cash flow and liquidity difficulties.
Nguyen Van Dinh, president of the Vietnam Association of Realtors, highlighted the positive changes in the market. The second quarter witnessed the introduction of new projects and a significant increase in successful transactions compared to the first quarter. The apartment segment accounted for 70% of the 5,000 transactions that took place between July and August. Supply is gradually increasing, primarily through the revitalization of 300 old projects. Many developers have adjusted their strategies by lowering prices to attract buyers, reflecting renewed confidence in the market.
Experts predict that the market will begin its recovery in early 2024. With decreasing interest rates, land prices, and housing prices, the beginning of 2024 is considered a favorable time for investment decisions. Economist Dinh Trong Thinh expects significant changes in the market by the end of the first quarter and the beginning of the second quarter of 2024, particularly with a stronger supply of social housing. The focus will shift towards affordable housing rather than luxury projects, ensuring a steady cash flow. Notably, the ongoing construction of over 400 social housing projects, including a one-million-unit project, is expected to contribute to the market’s recovery.
The Vietnam Real Estate Research Institute predicts a V-shaped recovery, starting in the middle of the second quarter of 2024. During the recovery period from 2024 to 2026, the supply of apartments is projected to increase by 20-25% annually. In Hanoi and Ho Chi Minh City, apartment supply is expected to reach 70,000-85,000 units per year, similar to pre-pandemic levels. However, experts acknowledge that the market will continue to face challenges until 2030 due to the absence of a national housing market strategy with a long-term vision. These challenges include policy and legal overlaps, resource shortages, inflation, high interest rates, and deficiencies in planning, infrastructure, market information, and human resources.