Vietnam real estate market can flourish again with shift in focus: experts

New policies, low interest rates, and projects serving real housing needs can see Vietnam’s real estate market recover by the end of 2025 and grow sustainably, experts said.

Bach Duong, country manager of real estate website Batdongsan.com.vn under Singaporean firm PropertyGuru, said property businesses need to promote segments that serve real needs and target customers under 40 years of age.

"According to a survey we conducted from the end of last year to the first quarter of this year, 62% of brokers polled said their customers had "put down money" to buy real estate with good prices or sales policies,” he said.

He was speaking at a recent press conference on the PropertyGuru Vietnam Property Awards 2024. The survey also found that 65% of respondents planned to buy properties within the year.

As a trend, homebuyers were getting younger and younger. Among those who want to buy real estate the next year, 64% were under 40. Notably, about 60% of young people aged 22-29 expressed confidence that they would be able to buy a house in the future.

“These are the things that real estate developers need to pay attention to in order to be able to create products with great value," Duong said.

He also noted that a series of new policies will take effect, particularly regulations that allow businesses with foreign tie-ups to invest in social housing, permit Vietnamese diaspora to own more properties, and protect consumers by requiring developers to make project information transparent. These factors can help capital flow into the market, he said.

"The real estate market from now until the end of the year is in the exploration stage, with products that meet real housing needs showing good liquidity. As long as we pass this period, capital will flow into businesses and the market will increase. I predict the market will prosper by the end of 2025 and develop sustainably from 2026 onwards," Duong said.

Data from Batdongsan.com.vn showed that in the first quarter of 2024, apartment was one of the real estate segments that received the most attention in Hanoi.

Apartment prices in the capital city increased sharply, by 11-19% in the past year to approach prices in the southern economic hub of Ho Chi Minh City. This price increase has been attributed to limited supply and very large demand, not only from customers in Hanoi and the northern provinces, but also those from the southern region. The number of searches for Hanoi apartments from people in HCMC has jumped 7.5 times compared to the beginning of 2021.

At a forum titled "Unleashing real estate supply in the southern region - Investment trends" organized by Business Forum magazine in HCMC Thursday, chairman of the Vietnam Association of Realtors (VARS) Nguyen Van Dinh said that this year, the market will continue to replace weak financial investors with those having good financial potential and products with full legal status.

He noted that there were positive signs for market recovery in the coming months and years.

"All changes will take place slowly and steadily based on previous recovery and accumulation, along with support from economic growth and urbanization process. The apartment segment with great demand will continue to lead the market. It will be followed by houses and residential land as investors become more and more certain about the market’s recovery prospects after going through the exploration stage," Dinh said.

Hoang Hai, director of the Department of Housing and Real Estate Market Management under the Ministry of Construction, said 2024 would continue to be a difficult year for the real estate industry.

However, the new laws on land and real estate that will come into effect soon will basically remove legal problems facing projects. At the same time, there will be many incentives and growth-encouraging policies with clearer, more transparent regulations.

"The recovery process will stabilize soon and create a new favorable environment for investors. Institutional limitations and obstacles will be removed through the promulgation and amendment of many new laws, decrees and circulars in many related fields," he said.