Real estate experts anticipate a gradual rebound of the Vietnamese property market starting in mid-2024, with sustained strength expected to materialize in the third quarter of 2025.
Michael Kokalari, CEO of investment management firm VinaCapital, asserts that the market’s worst phase has passed, citing increased transactions following a reduction in mortgage interest rates by banks in August.
The lowered interest rates have facilitated successful sales for some apartment developers, leading to a surge in premium property prices in HCMC and Hanoi. This has also provided a modest boost to the land segment, known for its speculative nature in the real estate market.
The gradual shift of funds from bank savings to the stock and real estate markets is viewed as a positive indicator for the real estate market in 2024.
Can Van Luc, chief economist at state-owned bank BIDV (Bank for Investment and Development of Vietnam), anticipates opportunities for the real estate market in 2024. Factors such as China’s border reopening, global supply chain shifts, increased capital flows, and the emphasis on infrastructure and socioeconomic recovery contribute to Vietnam’s economic growth.
Luc notes that Vietnam has inflation and bad debt under control, attracting capital inflows into the housing market. Improvements in planning, infrastructure, and the legal framework further support the market.
Amendments to the Housing Law and Real Estate Trading Law have been made, and the Land Law is slated for revision next year. These changes are expected to address legal challenges hindering the property market. Luc suggests that industrial property, housing for foreign experts, and social housing will witness recovery in 2024, while other segments may need to wait for additional policy changes.
Although lending interest rates might decrease in 2024, banks will remain vigilant in monitoring credit risks. Convincing banks in the real estate sector could be challenging, considering a significant growth in bank deposits in the first nine months of 2023 compared to the same period in 2021.
