Outlook upbeat for Vietnam’s ailing realty market: experts

The Vietnamese real estate market has shown good signals in many segments, creating momentum for its recovery, said experts and business leaders.

The positive signs were attributed to strong actions taken by the government to remove bottlenecks relating to legal issues and capital flow for property developers.

According to Tran Quoc Dung, deputy CEO of Hung Thinh Land, in April and May, authorities agreed to remove legal problems regarding investment procedures and house ownership certificates for its six projects in Ho Chi Minh City and two others in neighboring Dong Nai province.

"In the coming time, we will continue to accelerate the removal of obstacles for the remaining projects," he said.

“More than ever, the real estate market has received strong support from the government, the State Bank of Vietnam, ministries, agencies and localities,” he added.

Dung noted that the market liquidity in the second quarter was better. Entering the third quarter, many new projects have been launched while the confidence of customers and investors has also much improved.

The reduction of interest rates by 0.5-2 percentage points reflected the great effort of the government and the banking system. This move is having a strong positive effect on the economy and real estate businesses.

“However, lending rates need to be further cut to stimulate demand again. Support policies also need time to really affect the market, especially removing bottlenecks in the project licensing process,” he added.

Market expected to improve in H2

Vo Hong Thang, R&D director of property consultancy firm DKRA Vietnam, said that state management agencies are speeding up the removal of difficulties to unleash the property market.

Despite yet showing clear impacts, the recent moves are solid "platforms" for the market's sustainable recovery in late 2023 and the first half of 2024 at the latest, he said.

To support this projection, Thang noted the lending interest rates are declining and will continue to fall in the coming time while authorities’ solutions have started to prove effective.

In addition, the prices of properties have sharply decreased over the past year, making some attractive again, he added.

Total public investment capital allocated for 2023 reaches VND700 trillion ($29.6 billion), 25% higher than in 2022. Disbursed public investment has increased sharply, hitting over 30% of the year plan by the end of Q2. Public investment for transport infrastructure this year is up to VND95 trillion ($4 billion), a record high.

Sharing the same view, the Hung Thinh Land deputy CEO said the market has seen positive signs thanks to the swift actions of the government, so pressures will start to ease in H2 of 2023 and early 2024.

After this period, the market will enter a new development cycle that may even be stronger than before the crisis, he opined.

According to Dung, there are solid grounds for the coming recovery and growth of the market. Specifically, in the first six months of 2023, domestic consumption growth reached nearly 11% while public investment disbursement surpassed 30% of the year plan. The government and the National Assembly have taken drastic actions and issued many policies to remove bottlenecks in support of businesses and the economy.

"These are the bases for us to fully believe that the market will improve in the near future," he stressed.

Nguyen Van Khoi, chairman of the Vietnam National Real Estate Association (VNREA), held that Vietnam's real estate market is forecast to remain quiet until the end of 2023 and only recover and develop in a healthier and more transparent way from the second or third quarter of 2024.

The forecast was backed by legal improvements, positive economic growth prospects, synchronous and modern infrastructure development, digital transformation, and the application of Industry 4.0 technology, along with diverse financial resources, he said at an international conference themed "Development potential of Vietnam’s real estate market" held by The Investor on July 13.