No signs of decline in Vietnam’s real estate prices: expert

There are no signs of a decrease in Vietnam’s real estate prices, despite the market having been in a moribund state for a long time, said Nguyen Hoang, an industry expert.

Specifically, in the southern metropolis of Ho Chi Minh City, apartment prices rose 6% year-on-year in the first half of this year while prices in other segments remained stable, Hoang cited data from property website Batdongsan.com.vn as saying.

In contrast, apartment prices in Hanoi skyrocketed by 31% year-on-year, and private house prices surged by 32%. Additionally, in the capital city, prices for land, villas, and shophouses increased by 19%, 18%, and 10%, respectively.

Notably, searches for real estate are on the mend after hitting lows in the fourth quarter of 2022 and Q1/2023.

In Hanoi, searches for apartments recorded significant growth, up 46% year-on-year. Following were searches for private houses, shophouses, and villas, which hiked 33%, 27%, and 9%, respectively.

In HCMC, searches for land for sale saw the strongest growth in the period, up 45% over the year. This was followed by searches for apartments, villas, and shophouses, which grew by 33%, 25%, and 22%, respectively.

Commenting on market developments, Hoang said that the real estate landscape has shown positive signs. Several primary real estate projects introduced to the market have recorded slight price increases, while the supply of new projects remains limited.

Most of the projects available have been developed by established industry players such as Khang Dien (HoSE: KDH), Nam Long (HoSE: NLG), Singapore’s Capitaland, and the Malaysia-invested Gamuda.

Even when the market is sluggish, real estate prices rarely plummet due to thin supply, input cost surges, and lengthy construction periods, the expert noted.

During H1, purchasing power increased slightly, indicating a gradual recovery in the real estate market, Hoang said. He pointed out that demand for land has been uneven across regions, influenced by cautious sentiment.

Commenting on social housing, he highlighted the disappointing outcome of the stagnant disbursement of a VND120 trillion ($4.7 billion) government aid package. He suggested that regulatory adjustments are needed to improve accessibility.

For regulatory factors, Hoang emphasized the importance of thorough preparation for potential issues after the amended Laws on Land, Housing, and Real Estate Business take effect five months ahead of the original schedule, starting August 1.

While expressing concern over the sluggish handling of market hurdles by authorities, Hoang cautioned about issues concerning real estate corporate bonds, anticipating a significant number of bonds maturing in 2024.

Overall, Hoang stated that the local real estate market would continue to recover in the second half of the year without experiencing a boom. He also underscored the necessity to monitor the financial health of property developers for potential improvements.