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Real estate in 2023 will clearly lose its appeal, losing its top position in the investment portfolio as most segments decline.
Overview of the 2024 Real Estate Forum organized by the Vietnam Association of Realtors on the morning of January 5. Photo:Ngoc Diem
The information was presented at the 2024 real estate forum organized by the Vietnam Association of Realtors (VARS) on January 5. VARS experts commented that the attractiveness of real estate in 2023 will decrease significantly and lose its top position in customers' investment portfolios.
According to Mr. Nguyen Van Dinh, Chairman of VARS, from May 2022 to the end of 2023, the real estate market will be covered in gray. Thousands of projects will have to suspend operations, many businesses will be dissolved or closed, causing 80% of brokers to quit their jobs.
The year-end report of the Association of Realtors shows that the attractiveness of real estate last year decreased sharply because most segments were gloomy. The recovery momentum at the end of the year did not meet expectations. In which, the most heavily affected type was resort real estate. The supply of the whole year last year decreased by more than 80% compared to the previous year. The number of transactions recorded only more than 700 products.
The commercial and social housing markets are considered the most solid pillars in the segments, but still face many shortcomings due to poor supply and serious imbalance between supply and demand.
Total supply for the whole year of 2023 will reach more than 55,000 units, only one-third of the pre-pandemic level. The average apartment price in Hanoi is 51.7 million VND per square meter, while in Ho Chi Minh City it is 71 million VND. This shows that the price base is still high compared to the real value and financial capacity of the people.
In particular, social housing has only recorded 46 completed projects, reaching 4.7% of the plan for the 2021-2025 period. VARS assessed that the housing segments have not met expectations.
Regarding the land segment, this association said that there is no longer a fever like the previous period when many products were cut at a loss of 30-40% but still had difficulty in liquidating. This is a decrease compared to the peak period, so in reality, it has not yet approached the actual value.
Mr. Pham Lam, Chairman of DKRA Group, also acknowledged that the difficulties of the real estate market will not only occur in 2023 but are the result of the previous hot development process. Therefore, Mr. Lam believes that the expectation of a recovery in 2024 is too fast when the real estate market is facing comprehensive challenges and cannot solve the root causes of the difficulties.
Although the challenges will continue into this year, experts believe that this year could be the last year in the process of overcoming obstacles in the real estate market. The Chairman of DKRA Group said that the market is unlikely to explode but will gradually stabilize after the purification process. Looking at the long term in the next 5-7 years, the real estate market will develop more sustainably if businesses proactively adjust their capacity from now to adapt to upcoming legal changes.
Mr. Le Dinh Chung, Member of the VARS Market Research Task Force and General Director of SGO Homes, said that the changes this year are an effort to move towards the starting line of the real estate market instead of existing in a "negative" state like the recent period.
Mr. Chung predicts that the industry could welcome about 30-40% of brokers back in 2024. Large-scale sales programs and massive media campaigns will take place more frequently.
For customers and investors, this expert said that it is necessary to choose products that are legally guaranteed, fit their financial capacity, and avoid crowd mentality, worrying about market crisis and missing out on suitable opportunities.
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