Is the real estate market ready to “re-enter” the game?

DNHN - On April 15, The Vietnam Association of Realtors released a report on the real estate market in Q1/2024. According to the report, the current market shows that many investors, project owners, brokers, banks, etc. are ready to “re-enter” the market.


According to Vietnam Association of Realtors (VARS) data, 3,305 real estate businesses returned to operation in the first quarter of 2024. 20-30% of real estate brokers who left the market in the previous period have decided to return. 30-40% of the remaining real estate brokers are ready to return to the market in the second quarter when the recovery signals are clearer.

It is noteworthy that 60-70% of real estate brokers who are currently working in other jobs to make a living during the difficult market period have prepared themselves to devote full time to real estate.

On the investor side, up to 70% of investors with products that meet the conditions for sale are ready to bring their products to the market. Resort real estate project owners are not yet ready to return, as this segment still faces many difficulties.

For commercial banks, the recent interest rate cuts have brought mortgage rates down to record lows, averaging 5-6%/year during the preferential period. However, floating mortgage rates after the preferential period are still high, ranging from 9-12%. This makes many people who need to borrow money to buy a house hesitant.

Concerning trading floors, 70-80% of trading floors are ready to participate in the market. However, trading floors are facing a shortage of real estate brokers, especially those with knowledge, experience, and professional certificates.

Investors and customers, after a long period of caution, have started to show interest again. However, instead of deciding to spend money as soon as they approach, customers and investors are willing to spend more time.

A survey shows that 70% of customers and investors are ready to “spend money” to buy real estate in 2024 if they find a suitable product. Land plots and low-rise houses are the two segments that receive the most attention.

Ms Pham Thi Mien - Deputy Head of VARS Real Estate Market Research and Investment Promotion Consulting Department
Ms Pham Thi Mien - Deputy Head of VARS Real Estate Market Research and Investment Promotion Consulting Department.

Ms Pham Thi Mien - Deputy Head of VARS Real Estate Market Research and Investment Promotion Consulting Department said that it takes more time and money to check the legal status and conduct field surveys carefully before making a decision. This has also somewhat extended the average time it takes for real estate brokers to complete a successful transaction.

Ms Mien said that industrial real estate continues to maintain its growth momentum. Commercial real estate has improved. The tourism and resort real estate segment has not yet escaped its difficulties. The social housing segment is also quite sad as the situation of both shortage and unsold units has not been resolved.

“The northern region is showing more positive signs than the central and southern regions. Localities such as Hai Phong, Hanoi, Bac Giang, Hai Duong, Da Nang, Binh Duong, Long An, Dong Nai, and Can Tho are the bright spots of the market,” Ms Mien said.

The Deputy Head of the VARS Market Research Department said that the land plot and residential real estate segments are the two segments that have recorded the most positive “movement”. The first quarter is considered a “soft stepping stone” for the market to keep pace, before moving on to a new step with expectations of more positive recovery results in the following quarters.

Assessing macroeconomic regulation, the consensus is that the Government, relevant agencies, ministries, and sectors will continue to make efforts to complete the issuance of a Decree detailing the implementation of the Housing Law, Land Law, and Real Estate Business Law as soon as possible. Bank interest rates will continue to remain stable at a low level. Maturing money at banks is starting to look for investment channels that offer more attractive returns, including real estate, especially land products with not-too-high investment value and great profit potential. The Government will continue to step up efforts to remove difficulties and develop the social housing segment. New measures will be increasingly in-depth and practical. Continue to promote local planning, focus on public investment disbursement, and create momentum to promote socio-economic development. Compared to the previous period, investors will spend more time considering investment decisions to “catch the wave” of infrastructure.

Experts exchanged views at the event to announce VARS’s first-quarter real estate market report
Experts exchanged views at the event to announce VARS’s first-quarter real estate market report.

These macroeconomic developments have also had a significant impact on the real estate market. The recovery of the real estate market continues to progress in a positive direction. All changes will take place gradually and stably based on the previous recovery and accumulation, along with the support of economic growth and the development of urbanisation. After going through a “near-death illness”, the surviving entities will have “antibodies”. Money from other channels is likely to “boldly” return to the real estate market in larger quantities and with “easier” access. The number of entities ready to “re-enter” the game will increase. More projects will be kicked off, introduced, and launched to the market; the number of trading floors and real estate brokers returning to operation will increase by 30-40%; customers/investors looking for real estate channels will also increase. Banks are also preparing to enter the race to compete for lending policies.

Within the framework of the event, analysing the legal aspects related to real estate, Associate Professor Dr Nguyen Quang Tuyen, Vice President of the Council of Hanoi Law University, shared about the delay of the Law with reality as well as regulations on appropriate real estate tax rates, avoiding tax evasion in this field.

Meanwhile, Dr Le Xuan Nghia, a Member of the National Monetary Policy Advisory Council, in his presentation “Finance and Capital for Vietnam’s Real Estate Market” recommended that the trend of lending interest rates should be reduced, and it is necessary to regulate the real estate bond market reasonably. Experts and speakers at the event also discussed one of the most difficult and controversial issues in Vietnam today, which is land valuation. Accordingly, many proposals suggest that the market should be regulated but there should be an intermediary agency to ensure all legal issues related to it objectively and practically.

Nghe Nhan

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