Apartment price growth slows down
According to experts, the growth rate of apartment prices will slow down. Transactions are expected to be better from the second quarter of 2023.
Selling prices will only increase, not decrease
According to the Vietnam Association of Realtors (VARS), more than 72% of housing transactions in the first quarter of 2023 were apartments. The total consumption rate of the housing market only reached about 11%, equivalent to more than 2,700 transactions, equal to 50% compared to the same period last year.
VARS commented that apartment prices continued to record high levels due to mainly high-end projects. The average price reached 51 million VND/m2 in Hanoi and 74 million VND/m2 in Ho Chi Minh City.
According to the Annual Report on Mid-High-End Apartment Market Trends in Hanoi in 2023, Prospects for the 2023 – 2025 period, it is expected that in 2023, the primary supply of the whole market will reach approximately 14,000 – 15,000 units. Of which, 80% of this supply mainly comes from projects in the West and East.
The number of units consumed is forecast to fluctuate around 10,000 – 12,000 units, a slight decrease compared to the period of 2020-2022. The proportion of buyers for residential purposes will tend to increase.
Ms. Bui Thi Huong – Head of Strategic Projects Department, Vietnam Real Estate Research Institute (VIRES) said that the selling price of mid-range and high-end apartments will not decrease and will tend to increase slightly. The price increase rate will slow down compared to the period of 2020 – 2022. Many investors will continue to offer many attractive incentive policies, beneficial to the cash flow of home buyers.
Mr. Tran Minh Tien – Director of the Center for Market Research and Customer Understanding (One Mount Real Estate) forecasted that the selling price of primary apartments in Hanoi may increase by 3 – 8% in the remaining quarters of 2023.
Real estate forecast to recover by the end of this year
Dr. Can Van Luc, chief economist of BIDV, commented that the real estate market will recover clearly from the end of this year. This is also the time when policies to remove obstacles for the real estate market and bonds will be more effective.
Mr. Luc emphasized that the Government has never issued four extremely important decisions for the market in one month.
That is Decree 08 on removing obstacles for corporate bonds, including real estate enterprises. Resolution 33 issued on a number of solutions to remove obstacles and promote the safe, healthy and sustainable development of the real estate market. Project 338 on investing in the construction of at least 1 million social housing apartments from now until 2030. Decree 10 guiding the Land Law, supplementing regulations on granting ownership rights for resort real estate.
“These are the main legal bottlenecks of the market. On that basis, localities such as Hanoi, Ho Chi Minh City, and Da Nang have also begun to review stuck projects to resolve them,” said Mr. Luc.
Forecasting the apartment market in the coming time, Mr. Nguyen Van Dinh – Chairman of VARS said that from the second quarter of 2023, transactions are expected to increase better.
Prices of low-end apartments will not decrease, but even increase. Prices of mid- and high-end apartments, which previously tended to increase virtually, will be adjusted to a level more suitable to their real value.
“When the market is re-establishing balance, prices are gradually approaching their real value. This is an opportunity for people with high incomes, who have a real need to buy for living, business or long-term investment, to choose this segment, increasing purchasing power for the market,” said Mr. Dinh.
