High prices major reason for low purchasing power in Vietnam realty market

By Vu Pham, Minh Hue
Fri, June 28, 2024 | 3:22 pm GMT+7

Now’s a good time to buy a house, experts opine, but purchasing power remains low as prices do not fit the pockets of a majority of those who need houses.

This could prove a dampener despite Vietnam’s real estate market showing “positive signs,” they said.

 Prospective customers study an apartment project model. Photo by The Investor/Vu Pham.

Prospective customers study an apartment project model. Photo by The Investor/Vu Pham.

A survey by leading real estate website Batdongsan.com.vn has found that in Q1 of this year, about 55% of the respondents expected real estate prices to decrease, 24% thought they would remain stable and 21% felt they would continue to increase.

Those who believed that real estate prices would continue to fall in Q2 climbed to 79%, 8% expected stable prices and only 12% felt they would increase further.

Le Bao Long, director of strategy at Batdongsan.com.vn, said real estate buyers are still “in a state of waiting,” with most needing clearer positive signals before deciding to return to the market.

"Buyers still expect prices to further decline and that new policies and legal changes will make the market more positive. The psychology of waiting has dominated the real estate market in the first half of this year," he noted

For Q2, although the level of satisfaction with the market seems to increase with home loan interest rates dropping over the previous quarter, the market index as well as people's ability to buy a house has shown a quarter-on-quarter decline. As a result, interest in the real estate market has not improved, Long said.

A Batdongsan.com.vn report says real estate transactions in the “past year” were led by middle-aged customers and those who did not use any financial leverage. It says 42% of customers aged 40-59 said they had owned a property in the past year.

48% of customers who bought real estate in this period did not use financial leverage or borrow money from banks. Only 28% of buyers used loans, compared to 33% recorded in the previous quarter, it said, without clarifying the chronology.

The report also says that home buyers are tending to shift from the primary market to the secondary market. In Q1, up to 68% of home buyers chose to buy primary real estate, but in Q2, this fell to 55%.

Customers looking for houses in the secondary market grew from 33% in Q1 to more than 45% in Q2. The increasing trend of buying secondary real estate “is considered normal since the market has lacked primary supply for a long time,” the report says.

In Q1 and Q2 this year, there were less than 2,000 new apartments offered for sale in Hanoi and Ho Chi Minh City.

Notably, along with the lack of new supply, Batdongsan.com.vn experts believe that the unvarying primary supply has greatly affected customer demand.

Most primary projects launched recently are in the high-end and luxury segments, while current real demand is mostly in the mid-range and affordable segments, with prices of below VND50 million ($1,965) per square meter.

Although real estate experts and businesses say that this year is a "golden" time to buy a house with developers offering many good incentives, people's incomes have not improved much and affordable housing has gradually "disappeared", greatly affecting purchasing power, the report emphasizes.

Dinh Minh Tuan, southern regional director of Batdongsan.com.vn, said buyers should only consider buying a house in Hanoi and Ho Chi Minh City if they have a monthly income of at least VND30 million ($1,180).

Furthermore, data compiled by the website also shows that real estate prices do not tend to decrease in Q2. Compared to the same period in 2023, prices in Hanoi increased 31% on average for apartments, 19% for land plots, 32% for private houses, and 18% for villas.

In the HCMC market, although liquidity remains weak, property prices have tended to move sideways in Q2 of this year. While land plots, private houses and townhouses have not recorded any fall in prices, the apartment segment has seen a year-on-year increase of 6%.

Experts predict that real estate prices will continue to grow in the coming time; by about 20% in 2024 and 5-6% in 2025 in Hanoi; and 4% each year from now until 2026 in HCMC.

They explain that increasingly scarce supply will cause house prices to increase sharply. Housing prices will keep rising even when supply improves because of many other factors, the report cites them as saying.

Comments (0)
  • Read More
Land clearance for Vietnam's North-South high-speed railway project to start on December 19

Land clearance for Vietnam's North-South high-speed railway project to start on December 19

Prime Minister Pham Minh Chinh has requested localities to start land clearance en masse for the gigantic North-South high-speed railway project on December 19.

Economy - Fri, August 8, 2025 | 11:52 am GMT+7

Vietnam might launch pilot digital asset exchange in August

Vietnam might launch pilot digital asset exchange in August

A digital asset exchange might be launched in August on a pilot basis, Deputy Minister of Finance Nguyen Duc Chi told a government press meeting on Thursday.

Finance - Fri, August 8, 2025 | 11:25 am GMT+7

Vietnam’s steel giant Hoa Sen spends $34 mln on land near Long Thanh airport for urban development

Vietnam’s steel giant Hoa Sen spends $34 mln on land near Long Thanh airport for urban development

Hoa Sen Group (HoSE: HSG), Vietnam’s top producer of coated steel products, has spent VND900 billion ($34.3 million) acquiring land for a major urban development project in the southern province of Dong Nai.

Real Estate - Fri, August 8, 2025 | 8:22 am GMT+7

Halal market presents major opportunities for Vietnamese businesses

Halal market presents major opportunities for Vietnamese businesses

The global Halal market is projected to reach $5 trillion by 2030, with Malaysia alone expected to hit $113.2 billion, said Shariza binti Abdul Rasheed, Halal product manager at Maybank Malaysia.

Economy - Thu, August 7, 2025 | 9:18 pm GMT+7

Steel major Hoa Phat to pour extra $130 mln into central Vietnam plant

Steel major Hoa Phat to pour extra $130 mln into central Vietnam plant

Vietnam’s leading steelmaker, Hoa Phat Group (HoSE: HPG), will increase investment in its Dung Quat 2 iron and steel production complex by VND3.4 trillion ($129.7 million) as part of an expansion plan.

Industries - Thu, August 7, 2025 | 8:03 pm GMT+7

Vietnam’s army-backed construction firm proposes 14 offshore wind power projects

Vietnam’s army-backed construction firm proposes 14 offshore wind power projects

Lung Lo Construction Corporation (LLC), under the Ministry of National Defense, has submitted investment proposals for 14 offshore wind power projects with a combined capacity of 9,000 MW.

Energy - Thu, August 7, 2025 | 5:07 pm GMT+7

Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai JSC has been fined VND92.5 million ($3,528) for failing to disclose bond-related information as required by law.

Companies - Thu, August 7, 2025 | 4:31 pm GMT+7

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Quang Ninh province will hand over 4.9 hectares of reclaimed land to the Quang Ninh LNG-fuelled power plant project before August 11, local authorities stated at a meeting on Wednesday.

Energy - Thu, August 7, 2025 | 4:17 pm GMT+7

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam’s seafood companies reported surging profits in Q2/2025, driven by importers ramping up purchases ahead of new U.S. reciprocal tariffs.

Economy - Thu, August 7, 2025 | 2:21 pm GMT+7

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Dragon Capital Group, Vietnam's largest asset manager, has appointed Le Anh Tuan as CEO of its arm Dragon Capital Vietfund Management Joint Stock Company (DCVFM), starting from October 1, 2025.

Companies - Thu, August 7, 2025 | 2:01 pm GMT+7

Indonesia, Malaysia, Thailand expand local currency transaction network

Indonesia, Malaysia, Thailand expand local currency transaction network

Bank Indonesia, Bank Negara Malaysia, and Bank of Thailand have added new Appointed Cross Currency Dealer (ACCD) participating banks to broaden services for bilateral transactions in local currencies across the three nations, Bank Indonesia said in a statement on Tuesday.

Southeast Asia - Thu, August 7, 2025 | 12:48 pm GMT+7

ASEAN to sign MoU on regional power grid implementation

ASEAN to sign MoU on regional power grid implementation

ASEAN member states are set to sign an MoU on the implementation of the ASEAN Power Grid during the bloc’s Energy Ministers’ Meeting this October.

Southeast Asia - Thu, August 7, 2025 | 12:43 pm GMT+7

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam has outranked Thailand as the world’s second-largest rice exporter in the first half of 2025, Thai PBS reported on August 3, citing the Thai Rice Exporters Association.

Companies - Thu, August 7, 2025 | 12:41 pm GMT+7

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam’s export earnings grew by 14.8% to $262.44 billion in the first seven months of this year, while its import turnover rose by 17.9% to $252.26 billion, resulting in a trade surplus of $10.18 billion.

Economy - Thu, August 7, 2025 | 12:19 pm GMT+7

Malaysia pledges big purchases, investments with US

Malaysia pledges big purchases, investments with US

Malaysia has agreed to buy and invest over $240 billion (MYR1.02 trillion) in the U.S. to help reduce the trade gap between the two countries.

Southeast Asia - Thu, August 7, 2025 | 12:08 pm GMT+7

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Novaland, a major real estate developer in Vietnam, plans to issue nearly 152 million new shares to swap more than VND6 trillion ($228.8 million) worth of bond principal.

Companies - Thu, August 7, 2025 | 10:11 am GMT+7