2023 real estate market: many challenges, few opportunities
The Vietnamese real estate market in 2023 will continue to face difficulties with medium or low liquidity and no remarkable improvements in the short term, said Vo Hong Thang, R&D deputy director of property consultancy DKRA Vietnam.
Currently, the realty market is relatively unpredictable due to macro factors at home and abroad, as well as the instabilities of the industry itself, said Thang. “The market in 2023 will witness the purification and restructuring of real estate businesses and even brokerage units to adapt to new conditions.”
The market will focus on housing products that meet actual demand in the affordable segment such as apartments under VND50 million ($2,130) per sq.m in Ho Chi Minh City, under VND35 million ($1,490) per sq.m in neighboring provinces, or the land lot segment. Projects must have full legal bases and clear construction schedules, with bank guarantees and loan support, he forecast.
“This year will be a difficult year for the resort real estate segment,” Thang added.

Vo Hong Thang, R&D deputy director of DKRA Vietnam. Photo by The Investor/Trong Hieu.
In 2022, the control of credit and bonds has made it difficult for both businesses and people to access loans for house purchases and investment in properties.
According to economist Le Si Tri, the moves to control real estate credit have had a significant impact on the market. Many projects have been suspended due to lack of capital, leading to a shortage of supply. Capital shortages have also caused market liquidity to decline.
When real estate credit is tightened, investors spend their own money rather than using financing, so they're very careful about which projects they invest in.
“This trend will create ‘social selection’ and only developers with strong cash flow and good infrastructure can win investors' trust,” he noted.
Tri said although the market still faces many difficulties, a "light at the end of the tunnel" will appear when Party Central Committee and Government policies are implemented. “The real estate market will become more transparent and healthy, and as a result, financial leverages will maximize their positive effects,” he said.
“The 2023 property market is expected to see many bright spots with improved sentiment among buyers and investors, and increased public confidence in the market and management policies, thereby promoting a healthier and more sustainable development of the market,” Tri added.
On the other hand, real estate is often regarded as a safe haven with value increasing over time, making it much better than other investment channels such as gold and securities. This has been proven over time, with property always showing strong resistance to market fluctuations, epidemics and inflation.

The real estate market in 2023 will focus on products meeting the actual demand. Photo by The Investor/Vu Pham.
Problems linger
A real estate market report by Batdongsan.com.vn showed that in the first and second quarters of 2022, Ho Chi Minh City had nearly 14,000 new apartments for sale, with a consumption rate reaching 70-80%. In the third quarter, supply fell to about 1,250 units and the consumption rate was less than 52%. At the peak, in the fourth quarter, the market had 450 primary apartments for sale, but the consumption rate reached only 25%.
Dinh Minh Tuan, HCMC branch director of Batdongsan.com.vn, said that the dismal apartment consumption in HCMC and the southern provinces gradually increased in the second half of 2022.
This was unprecedented, especially at the year-end - the golden time for the real estate market. To stimulate demand, many businesses have offered discounts of 40-50%.
According to Thang of DKRA, the real estate market is falling into a state of "hibernation" with supply and demand plunging since the middle of the second quarter of 2022. Demand in some segments was equal to only 10-20% of the start of the year. The downtrend has shown no signs of abating and is likely to spread on a large scale.
Since mid-April, the State Bank of Vietnam has strengthened control of credit in real estate as well as bond issuances, leaving most property developers thirsting for capital.
“As all capital-raising doors are almost closed, real estate businesses are now hanging by a thread. Many investors and brokers have been forced to cut personnel in order to optimize operational efficiency in the current situation,” Thang said, adding that what companies are waiting for is the regulators’ next moves to ease their current "thirst" for capital.
According to another survey of real estate trading floors by Batdongsan.com.vn, 61% said they had to cut their workforce, 31% remained unchanged, and only 8% employeed more staff.
Amid these difficulties, real estate businesses have restructured debts such as extending debt payment deadlines, converting loan packages with new interest rates, buying back bonds, and paying bond debts with properties. At the same time, they have also restructured their businesses, focusing on key products, downsizing operations, reducing personnel and increasing discounts to stimulate demand.
Real estate brokers have also had to adapt to the new situation. According to the survey, 55% said that they would continue in the job, 32% would find other jobs in parallel with real estate to earn more, and 7% would shift to another field.
According to the Ho Chi Minh City Real Estate Association (HoREA), the real estate market has seen continuous increases in house prices in the last five years. The middle-range price of about VND2 billion ($85,290) or more was about 20 times higher than the average income.
Since 2019, super-luxury apartments with prices up to VND500 million ($21,320) per sq.m, or even VND1 billion per sq.m, have appeared on the market.
In some areas, brokers “blew up” prices of land plots and agricultural land, creating "virtual fevers”, adversely affecting the sustainable development of the market. Currently, the market has slowed down with declined transactions, but prices remain high.
Assessing the real estate market in 2022, the Ministry of Construction said that the market faced a wide range of difficulties, notably the lack of supply. In addition to the limited supply of social housing, there was no new supply of low-priced apartments.
Prices of private houses, land plots and apartments remained high, affecting the liquidity and transaction volume of the market, especially the secondary one.
Capital channels for the real estate sector, including credit, bonds, and stocks, all faced difficulties, while some individuals and businesses have been handled for their violations, impacting market and investor confidence.
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