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
Vietnam’s energy firm identifies 3 emissions violations among Vietnamese enterprises

Vietnam’s energy firm identifies 3 emissions violations among Vietnamese enterprises

Looking ahead, 2030 is a milestone year, as major global brands such as Unilever, Nestlé, H&M, and Nike have committed to cutting Scope 1 and Scope 2 emissions by 50-65%, said Pham Dang An, CEO of Vu Phong Energy Group, a major developer of clean energy in Vietnam.

Companies - Sat, June 7, 2025 | 8:00 am GMT+7

Deal acquiring financial firm of Vietnam's SeABank invalid: Aeon Financial

Deal acquiring financial firm of Vietnam's SeABank invalid: Aeon Financial

Aeon Financial Service Co., Ltd. on Friday stated that its deal to purchase a financial company owned by Vietnam's SeABank is invalid due to "inappropriate accounting transactions."

Finance - Fri, June 6, 2025 | 11:57 pm GMT+7

VSAP LAB to build $69 mln chip packaging tech laboratory in central Vietnam

VSAP LAB to build $69 mln chip packaging tech laboratory in central Vietnam

Vietnamese private firm VSAP LAB JSC has been approved as the investor of a VND1.8 trillion ($69.11 million) advanced packaging technology laboratory project that will assist semiconductor production in the central city of Danang.

Industries - Fri, June 6, 2025 | 8:11 pm GMT+7

Vietnam's major property developer Hoang Huy successfully raises $30.7 mln from parent company

Vietnam's major property developer Hoang Huy successfully raises $30.7 mln from parent company

Hoang Huy Investment Services JSC (HoSE: HHS) has successfully issued 64 million shares for VND800 billion ($30.7 million) via private placement to its parent company – Hoang Huy Financial Services Investment JSC (TCH).

Companies - Fri, June 6, 2025 | 3:32 pm GMT+7

Subsidiaries, affiliates likely not to enjoy preferential corporate income tax in Vietnam

Subsidiaries, affiliates likely not to enjoy preferential corporate income tax in Vietnam

Subsidiaries and affiliates of enterprises in Vietnam might not be eligible for preferential corporate income tax (CIT) rates of 15-17%, in order to prevent abuse of incentives like splitting income for tax avoidance, according to the Financial and Economic Committee under the National Assembly, the country's legislature.

Finance - Fri, June 6, 2025 | 3:22 pm GMT+7

VPS Securities JSC named Vietnam’s best broker again by The Asset

VPS Securities JSC named Vietnam’s best broker again by The Asset

VPS Securities JSC (VPS) has once again been honored as the “Best Brokerage House in Vietnam” at the Triple A Awards 2025, presented by The Asset, a leading Asia-focused financial publication.

Companies - Fri, June 6, 2025 | 11:40 am GMT+7

Vietnam's agri major BAF eyes two 6-story buildings for pig farming in southern Vietnam

Vietnam's agri major BAF eyes two 6-story buildings for pig farming in southern Vietnam

BAF Vietnam Agriculture JSC has submitted a proposal to the Ministry of Agriculture and Environment to develop a smart pig farming complex including two six-story buildings in the southern provinces of Tay Ninh and Binh Phuoc.

Industries - Fri, June 6, 2025 | 11:20 am GMT+7

Food major Kido leaders reveal real estate ambitions

Food major Kido leaders reveal real estate ambitions

Leaders of Kido Group, a leading Vietnamese food and cooking oil producer, said they see many positive policies that are helping to ease real estate market difficulties and create favorable conditions for the company to develop projects on its land reserves.

Real Estate - Fri, June 6, 2025 | 11:03 am GMT+7

Indonesia accelerates procedures to join OECD

Indonesia accelerates procedures to join OECD

The Indonesian Government has finalised the preparation of the Initial Memorandum (IM) for its accession to the Organisation for Economic Co-operation and Development (OECD), which will be submitted to OECD Secretary-General Matthias Cormann in Paris, France.

Southeast Asia - Fri, June 6, 2025 | 10:16 am GMT+7

OECD lowers Indonesia's growth forecast to 4.7%

OECD lowers Indonesia's growth forecast to 4.7%

The Organisation for Economic Cooperation and Development (OECD) has lowered its forecast for Indonesia's economic growth down to 4.7% this year, from the previous 4.9%, due to weakened domestic sentiment and heightened external risks.

Southeast Asia - Fri, June 6, 2025 | 10:15 am GMT+7

Vietnam, US sign additional agricultural trade deals worth over $600 mln

Vietnam, US sign additional agricultural trade deals worth over $600 mln

Vietnam and the U.S. on Wednesday signed MoUs on importing animal feed materials from Ohio state with total value exceeding $600 million.

Economy - Fri, June 6, 2025 | 10:03 am GMT+7

My Thuy deepwater port to become central Vietnam logistics hub

My Thuy deepwater port to become central Vietnam logistics hub

My Thuy Deepwater Port, once operational, will not only create a new growth pole for the central province of Quang Tri and serve as a gateway to the East Sea, but also become a regional logistics hub.

Infrastructure - Fri, June 6, 2025 | 8:00 am GMT+7

Vietnam's 5-month registered FDI hits $18.4 bln, up 51%

Vietnam's 5-month registered FDI hits $18.4 bln, up 51%

Registered foreign direct investment (FDI) in Vietnam hit $18.4 billion in the first five months of the year, up 51.1%, while disbursed capital reached $8.9 billion, up 7.9%.

Economy - Thu, June 5, 2025 | 6:52 pm GMT+7

Indonesia launches economic stimulus package to boost purchasing power

Indonesia launches economic stimulus package to boost purchasing power

The Indonesian Government has rolled out an economic stimulus package worth IDR24.44 trillion (nearly $1.53 billion) to maintain consumer purchasing power and stabilize the national economy.

Southeast Asia - Thu, June 5, 2025 | 4:06 pm GMT+7

Vinhomes subsidiary to develop two industrial parks worth $383 mln in northern Vietnam

Vinhomes subsidiary to develop two industrial parks worth $383 mln in northern Vietnam

Vinhomes Hai Phong Industrial Park Investment JSC under Vinhomes, the housing arm of Vietnam’s conglomerate Vingroup (HoSE: VIC), is expected to be the investor of two industrial parks worth VND10 trillion ($383 million) in the northern port city of Hai Phong.

Real Estate - Thu, June 5, 2025 | 3:54 pm GMT+7

Agriculture drives Indonesia’s economic growth

Agriculture drives Indonesia’s economic growth

Agriculture is emerging as a key driver of Indonesia’s economic growth, especially in the first quarter of 2025, according to the latest report by the Indonesian Institute for Development of Economics and Finance (INDEF).

Southeast Asia - Thu, June 5, 2025 | 3:46 pm GMT+7