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 to be key link in global LNG chain on rising demand: experts

Vietnam to be key link in global LNG chain on rising demand: experts

Vietnam is emerging as a potential LNG importer and expected to become a key link in the global LNG chain, says Nguyen Duc Tung from the Vietnam Institute of Strategy and Policy for Industry and Trade.

Energy - Thu, December 19, 2024 | 8:16 am GMT+7

Latvian man sentenced in Vietnam for operating loan shark ring with 1,380% interest rate

Latvian man sentenced in Vietnam for operating loan shark ring with 1,380% interest rate

Aigars Plivěs, a Latvian national, on Monday was sentenced to two years and nine months in prison for operating three companies that offered loans with high interest rates of 401-1,379.7% per year, earning illicit gains of more than VND4.15 trillion ($163 million).

Society - Wed, December 18, 2024 | 10:37 pm GMT+7

April Tea Shop to close down amid F&B sector woes

April Tea Shop to close down amid F&B sector woes

The Tiem tra thang 4 (April Tea Shop), a popular check-in and beverage destination for young people in Ho Chi Minh City, has announced it will shut down on December 25, ending a five-year journey.

Companies - Wed, December 18, 2024 | 9:56 pm GMT+7

New tourism trends seen in Thailand

New tourism trends seen in Thailand

Thailand is gearing up to attract more luxury and high-spending travellers in a bid to stimulate post-pandemic expenditure.

Southeast Asia - Wed, December 18, 2024 | 9:37 pm GMT+7

Thailand to allow more foreign workers in business

Thailand to allow more foreign workers in business

The Thai cabinet has approved in principle increasing the number of foreign workers at businesses to deal with labour shortage, according to Thai government spokesman Jirayu Huangsab.

Southeast Asia - Wed, December 18, 2024 | 9:25 pm GMT+7

Indonesia to build first nuclear power plant

Indonesia to build first nuclear power plant

Indonesia is planning to build its first nuclear power plant on Kelasa island in Bangka Belitung province.

Southeast Asia - Wed, December 18, 2024 | 9:18 pm GMT+7

Thailand announces research and innovation direction for 2025

Thailand announces research and innovation direction for 2025

The recent “Research X Innovation 2025” conference examined global trends and announced Thailand’s research and innovation direction for 2025.

Southeast Asia - Wed, December 18, 2024 | 8:49 pm GMT+7

Malaysia eyes to become ASEAN’s next-generation vehicle hub

Malaysia eyes to become ASEAN’s next-generation vehicle hub

The Malaysian Investment Development Authority (MIDA) has partnered with DRB-Hicom Bhd and Zhejiang Geely Holding Group Co. Ltd. to develop the Automotive Hi-Tech Valley (AHTV) in Tanjung Malim, Perak, with a goal of turning the country into ASEAN’s hub for next-generation vehicles (NxGV) and energy-efficient vehicles.

Southeast Asia - Wed, December 18, 2024 | 8:46 pm GMT+7

Thai IP developer Amata eyes clean energy cooperation with northern Vietnam province

Thai IP developer Amata eyes clean energy cooperation with northern Vietnam province

Amata Group of Thailand on Wednesday recommended the northern province of Quang Ninh foster cooperation in clean energy development in the time to come.

Investing - Wed, December 18, 2024 | 4:54 pm GMT+7

Czech's Sev.en Global Investments to make Europe's largest energy investment in Vietnam

Czech's Sev.en Global Investments to make Europe's largest energy investment in Vietnam

Czech-based Sev.en Global Investments, a multi-sector business, will expand its footprint to Asia, with Vietnam as a key market, the firm announced Wednesday.

Energy - Wed, December 18, 2024 | 3:43 pm GMT+7

Vietnam's Mekong Delta has immense opportunities for herbal-based medicine development: exec

Vietnam's Mekong Delta has immense opportunities for herbal-based medicine development: exec

The government should prioritize planning for designated growing areas and support product promotion to advance the development of products derived from medicinal herbs, said Pham Thi Xuan Huong, general director of OPC Pharmaceutical JSC.

Companies - Wed, December 18, 2024 | 2:15 pm GMT+7

Petrovietnam seeks WB support in offshore wind energy

Petrovietnam seeks WB support in offshore wind energy

State-owned Petrovietnam has called on the World Bank to provide support, including capital, to help with green energy projects, especially offshore wind power.

Energy - Wed, December 18, 2024 | 1:36 pm GMT+7

Masan High-Tech Materials exits its downstream business H.C. Starck

Masan High-Tech Materials exits its downstream business H.C. Starck

Vietnam's Masan High-Tech Materials on Wednesday announced the successful closing of the sale of 100% of H.C. Starck Holding (Germany) GmbH to Mitsubishi Materials Corporation Group.

Companies - Wed, December 18, 2024 | 1:24 pm GMT+7

New stock trading system KRX must come on stream in 2025: regulator

New stock trading system KRX must come on stream in 2025: regulator

The State Securities Commission (SSC) of Vietnam has demanded stock exchanges and related entities to launch the new stock trading system KRX in 2025.

Finance - Wed, December 18, 2024 | 11:40 am GMT+7

Hong Kong-invested battery maker GPPD raises Vietnam investment to $35 mln

Hong Kong-invested battery maker GPPD raises Vietnam investment to $35 mln

Singapore-incorporated GPPD Pte. Ltd., a subsidiary of Hong Kong-based Gold Peak Technology Group Limited, has increased its investment in Vietnam’s southern province of Binh Phuoc to $34.6 million.

Industries - Wed, December 18, 2024 | 11:17 am GMT+7

Vietnam interest rate unlikely to fall further: experts

Vietnam interest rate unlikely to fall further: experts

Interest rates in Vietnam are unlikely to decrease further and may even rise slightly in the near future, according to Pham The Anh, chief economist at the Vietnam Economic and Strategy Research Center (VESS).

Economy - Wed, December 18, 2024 | 10:04 am GMT+7