"Thin ice starts to melt" in Vietnam's real estate market

The real estate market experienced a complete freeze in the first half of this year, with only 25 completed commercial housing projects and 30 eligible for future sales, a 60% decrease from last year.

Change in supply

Since June, the supply of real estate, mainly apartments, has significantly changed. The Glory Heights subdivision of Vinhomes Grand Park has deposited 2,000 apartments out of 3,168 offered for sale. Ho Chi Minh City also has new projects to open or launch in the next phase. 

Investors introduced sales programs like flexible payments and loan interest reductions to boost demand in February and the remaining quarters. Nam Long Group's Akari City Phase 2 project supports buyers with monthly payments of VND 3.8 million.

According to Savills Vietnam, 8,450 units will be built in the second half of 2023. Grade B (mid-end) apartments account for 54% of these, Grade C (affordable) apartments account for 39%, and Grade A (mid-end) apartments account for 54%. upper end) accounted for 7% of the market.
 
The real estate market is experiencing positive signals due to improved operating, financial, and monetary policies. The government has taken drastic measures to promote the market, including Resolution 33 and Decree 08/2023. The Ho Chi Minh City Real Estate Association has dealt with 43 proposals for 39 projects.

The bond knot shows positive signs after a prolonged period of paralysis, with total corporate bond issuance at VND 97,488 billion, with 17 public issuances and 76 private placements. 

Novaland, a struggling enterprise, has resumed projects in several localities since the bond market crisis. After clearing legal obstacles, Novaland has deployed projects like The Grand Manhattan, Victoria Village, NovaWorld Phan Thiet, NovaWord Ho Tram, and Aqua City. Mr. Nhon believes Resolution 33 is a valuable source of oxygen for the business community.

Waiting for policy works

Investors returned to the market with new projects, benefiting from policy changes, lower interest rates, and government investment. The market needs time to recover and meet real housing demand.

“The recovery is still slow; many difficulties and obstacles have not been resolved in time; the weakest demand is loans to buy houses and repair houses... and issuing corporate bonds is still difficult due to trust and demand. investment in a safer direction”, analyzed by Dr. Can Van Luc, a member of the National Monetary and Financial Policy Advisory Council.
 
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HOREA), also said: “The biggest difficulty is legal problems, accounting for 70%. Related laws such as the Law on Land, the Law on Housing, the Law on Real Estate Business... are still being discussed by the National Assembly, expected to take effect on July 1, 2024.”
 
The Vietnam Real Estate Association predicts a quiet market by the end of 2023, recovering and developing healthier, more transparent, and more standard properties by the second or third quarter of 2024. Despite optimistic signals, the market faces difficulties with low average liquidity.

The newly released report of Cushman & Wakefield also said that when the market overcomes the depression and recovers again, many large global investment organizations will participate in the Vietnamese real estate market from 2024-2026. This is also the time when the market is expected to grow.