Vietnam real estate market bottoms out: economist

By Anh Minh
Thu, September 28, 2023 | 9:49 pm GMT+7

The Vietnamese real estate market has overcome its most difficult period and is bouncing back thanks to fiscal and monetary loosening that has yielded positive effects, according to a leading economist.

The local property market is not in a real crisis, but a confidence crunch, said Can Van Luc, chief economist at Hanoi-based BIDV bank, at a forum hosted by the Vietnam National Real Estate Association on Thursday.

Can Van Luc, chief economist at BIDV speaks at a forum hosted by the Vietnam National Real Estate Association in Hanoi, September 28, 2023. Photo courtesy of Lao Dong (Labor) newspaper.

Can Van Luc, chief economist at BIDV speaks at a forum hosted by the Vietnam National Real Estate Association in Hanoi, September 28, 2023. Photo courtesy of Lao Dong (Labor) newspaper.

Luc, also a member of the National Fiscal and Monetary Policy Advisory Council, noted that the Vietnamese property market has been in a slump over the past year, but has recovered 20-30% in comparison to its heyday in 2021.

He pointed out the factors behind this recovery. They include an economic rebound in Vietnam and worldwide, easing inflation, lowering interest rates following the central bank’s four consecutive cuts, the gradual removal of legal troubles, accelerated public investment, and incentives adopted by the government to support businesses.

Real estate companies are bearing lighter financial burden while property prices have corrected to more accessible levels, Luc added. Credit for the sector has expanded around 5% in the year to date, slightly below the overall growth of the banking system. In addition, inbound foreign investment in real estate totaled nearly $2 billion, or 10% of FDI commitments from the beginning of this year.

Forecasts by international institutions put Vietnam’s economic growth at 5-5.5% for this year and 6.5% next year. Inflation is no longer a concern in Vietnam as it is likely to be tamed at 4% both in 2023 and 2024.

Collaborating with Luc, Nguyen Van Dinh, chairman of the Vietnam Association of Realtors (VARS), said that Vietnam’s realty market is seeing brighter prospects.

In the second quarter, a number of developers recorded better sales with around 3,700 successful transactions, more than three times the figure in early 2023.

Dinh cited VARS data as showing that there were over 5,000 transactions in July and August, which included the “bad luck” month, with 70% of them recorded in the condo segment. Supply is increasing from some 300 projects across the country and developers are offering products at lower prices.

“Unlike the freeze developers experienced at the start of this year, confidence among both developers and investors is improving,” Dinh added.

Sharing the same view, economist Dinh Trong Thinh forecast a clearer recovery in Q1 and at the beginning of Q2 in 2024 when affordable supply rises thanks to developers’ efforts to boost sales at viable projects.

The government’s scheme to build over one million low-end homes is providing support for the market, with over 400 affordable housing projects kicking off since late 2022, Thinh said.

A report by the Real Estate Research Institute has forecast a V-shaped recovery of the local real estate market from Q2/2024. Condo supply is expected to increase 20-25% annually in the 2024-2026 period. The supply of this segment in Hanoi and Ho Chi Minh City, the two largest cities in the country, is estimated to increase to 70,000-85,000 a year in the same period.

Comments (0)
  • Read More
Vietnam high-speed railway should run beyond Hanoi, HCMC on either side: lawmakers

Vietnam high-speed railway should run beyond Hanoi, HCMC on either side: lawmakers

Vietnam’s mega North-South high-speed railway project should be redesigned and extended beyond Hanoi and Ho Chi Minh City as currently planned, several lawmakers have suggested.

Infrastructure - Thu, November 21, 2024 | 6:11 pm GMT+7

Vietnam-Malaysia relationship upgraded to comprehensive strategic partnership

Vietnam-Malaysia relationship upgraded to comprehensive strategic partnership

Vietnam and Malaysia have upgraded their relationship to a comprehensive strategic partnership, the highest level in the former’s diplomatic hierarchy.

Politics - Thu, November 21, 2024 | 5:21 pm GMT+7

Petrovietnam units sign LNG supply deal for trial run of Vietnam’s first LNG power plants

Petrovietnam units sign LNG supply deal for trial run of Vietnam’s first LNG power plants

PV Power and PV Gas, two units of state-owned Petrovietnam, have signed an LNG supply deal for trial operation of Nhon Trach 3 and Nhon Trach 4, Vietnam’s first LNG-to-power plants.

Energy - Thu, November 21, 2024 | 4:40 pm GMT+7

Sufficient first phase funds ensured for Vietnam’s new mega airport: transport minister

Sufficient first phase funds ensured for Vietnam’s new mega airport: transport minister

Minister of Transport Nguyen Van Thang affirmed Wednesday that funding would be secured for building the Long Thanh International Airport, set to become Vietnam’s biggest.

Infrastructure - Thu, November 21, 2024 | 3:53 pm GMT+7

VAFIE to organize workshop on amendments to horse racing, football betting rules

VAFIE to organize workshop on amendments to horse racing, football betting rules

The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) and The Investor will organize a workshop on suggestions to amend the government’s Decree 06 on horse racing, greyhound racing and international football betting services.

Economy - Thu, November 21, 2024 | 2:38 pm GMT+7

Vietnam Politburo okays international, regional financial centers in HCMC, Danang

Vietnam Politburo okays international, regional financial centers in HCMC, Danang

Vietnam’s highest decision-making body, the Politburo, has greenlighted the establishment of an international financial center in Ho Chi Minh City and a regional financial center in the central city of Danang.

Economy - Thu, November 21, 2024 | 1:50 pm GMT+7

Singapore's Platinum Victory seeks to gain veto at Vietnam’s REE

Singapore's Platinum Victory seeks to gain veto at Vietnam’s REE

Singaporean fund Platinum Victory Pte. Ltd. has registered to buy more shares of Ho Chi Minh City-based utility firm Refrigeration Electrical Engineering Corporation (REE) to achieve the vetoing power in the latter.

Finance - Thu, November 21, 2024 | 11:29 am GMT+7

Posco keen on investing in Vietnam's $2.2 bln LNG power project

Posco keen on investing in Vietnam's $2.2 bln LNG power project

South Korea’s steelmaker Posco is eyeing to invest in the $2.2 billion Quynh Lap LNG-fired power plant project in Vietnam’s central province of Nghe An.

Energy - Thu, November 21, 2024 | 10:42 am GMT+7

Vietnam firm Hoa Lam to build $212 mln Aeon Mall in Mekong Delta

Vietnam firm Hoa Lam to build $212 mln Aeon Mall in Mekong Delta

The Mekong Delta city of Can Tho has accepted a subsidiary of private multi-sector Hoa Lam Group as the investor of the Aeon Mall Can Tho commerce and service center.

Industries - Thu, November 21, 2024 | 10:31 am GMT+7

Vietnam startup expert closes Monkey in Black coffee shop

Vietnam startup expert closes Monkey in Black coffee shop

Tung BT (Tran Thanh Tung), a popular startup expert and social media influencer, is closing his final coffee shop in Ho Chi Minh City, ending a 10-year journey of the "Monkey in Black" brand.

Companies - Thu, November 21, 2024 | 8:16 am GMT+7

Vietnam-Singapore ties set for elevation to comprehensive strategic partnership

Vietnam-Singapore ties set for elevation to comprehensive strategic partnership

Vietnam and Singapore will elevate bilateral ties to a comprehensive strategic partnership and Singaporean Prime Minister Lawrence Wong will visit Vietnam next year.

Politics - Wed, November 20, 2024 | 8:16 pm GMT+7

Vietnam’s Vingroup establishes robotics firms, with co-founder’s 2 sons as major shareholders

Vietnam’s Vingroup establishes robotics firms, with co-founder’s 2 sons as major shareholders

Vingroup, Vietnam’s largest private conglomerate by ecosystem, has set up a robotics unit as it moves to ramp up its industrial-high technology ecosystem.

Companies - Wed, November 20, 2024 | 6:17 pm GMT+7

E-commerce, digital platforms likely to pay taxes on behalf of their sellers in Vietnam

E-commerce, digital platforms likely to pay taxes on behalf of their sellers in Vietnam

E-commerce and digital platforms will have to declare and pay taxes on behalf of their sellers starting January 1, 2025, according to a draft amendment to the Law on Tax Administration.

Finance - Wed, November 20, 2024 | 5:37 pm GMT+7

Flexibility, adaptability key to effective leadership: PepsiCo Vietnam exec

Flexibility, adaptability key to effective leadership: PepsiCo Vietnam exec

In a rapidly changing world, leaders need to develop the skill of being “as flexible as seaweed,” says Nguyen Viet Ha, general director of PepsiCo Foods Vietnam.

Companies - Wed, November 20, 2024 | 3:52 pm GMT+7

Central Vietnam province okays $88 mln automobile part project

Central Vietnam province okays $88 mln automobile part project

Binh Thuan province's industrial zone authority on Tuesday granted an investment registration certificate to a $88 million project invested by Taiwan’s NeoSCM Limited.

Industries - Wed, November 20, 2024 | 3:44 pm GMT+7

Thai packaging firm Thantawan Industry makes inroad into Vietnam

Thai packaging firm Thantawan Industry makes inroad into Vietnam

Thantawan Industry Public Company Limited, a leading Thai manufacturer of premium plastic packaging, has inked a deal for a 30-year factory lease, marking its inaugural investment in Vietnam.

Industries - Wed, November 20, 2024 | 3:34 pm GMT+7