Real estate is about to enter a new price increase cycle

Lower interest rates, cheap money periods, monetary easing, and unblocked cash flows... are factors that will greatly affect the real estate market.

Some comments say that real estate has bottomed out since April 2023. This is the time when buyers are forcing sellers down very deeply and is the frozen period of real estate. Currently, the level of deep price reduction as in the first quarter of 2023 is no longer there.

From May 2023 until now, trading has resumed. Investors have many suitable options and good prices as expected, buyers can buy a house with a very good discount of 30%.

According to DKRA Group's May 2023 survey, the new supply of land and suburban land in the month reached the highest level in the past 5 months, increasing 2.1 times compared to the previous month, although it decreased by 36% compared to the same period last year. DKRA Group's May report also shows that the land segment is showing clear signs of recovery.

According to Batdongsan.com.vn, the first 6 months of the year in the Hanoi market recorded improved purchase demand in Hoang Mai, Nam Tu Niem, Long Bien, Ha Dong districts with an increase of 2-6% compared to the previous quarter. Land in Hoai Duc and Thanh Tri areas has clearly grown again at 4-6% in both purchase demand and selling price.

Some provincial markets such as Bac Ninh, Bac Giang, Quang Ninh, Thai Binh in the North or Long An, Binh Duong in the South are also gradually recovering the demand for real estate after a long period of decline.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn also said: "The second quarter was, in my opinion, the bottom of the real estate market.".

“The world macroeconomic situation is showing signs of stability. Inflation is under control, interest rates and exchange rates have gradually stabilized since mid-2023. Vietnam's current economic foundation is still very good, the market still has a wave of foreign investors shifting to invest in Vietnam. Macro signals are still pointing towards recovery and "reversal" for the real estate market in 2023.", Mr. Quoc Anh emphasized.

According to Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, the Government has issued and updated positive legal changes to remove obstacles and promote real estate.

In addition, investors are increasingly diversifying their real estate portfolios. Interest rates are now partially controlled.

“The above factors will gradually have an impact, helping the market overcome the recession and recover. Thanks to that, many large global investment organizations will participate in Vietnamese real estate in the period of 2024 - 2026. This is also the time when the market is expected to grow, entering a new price increase cycle.", Ms. Trang emphasized.

Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, also believes that the market may recover by mid-2024.

However, when the market recovers, real estate prices will increase again. Therefore, this is a good opportunity for those with cash flow to "hunt" for themselves real estate in good locations, with good potential for price increase, and high discounts. If you go through this period and enter the recovery period, it will not be easy to hunt for a good house at an affordable price.

From another perspective, Dr. Can Van Luc, chief economist of BIDV and member of the National Financial and Monetary Policy Advisory Council, also commented that from the fourth quarter of 2023, the recovery momentum of the real estate market will be clearer. This is also the time when policies to remove obstacles for the real estate market and the bond market will be most effective.

According to Mr. Luc, laws related to the real estate market such as the Housing Law, the Real Estate Business Law, the Land Law and the Credit Institutions Law have never been amended at the same time as they are now. Therefore, basic legal bottlenecks will be removed.

Experts say the market is about to enter a new price increase cycle, so this is a good time for investors to buy real estate.

Mr. Tran Quang Trung, Business Development Director of OneHousing, commented that currently real estate products are at very good prices. However, do buyers dare to take advantage of these opportunities?

In investment activities, the most important thing is to see the opportunity early and predict the potential of that opportunity. When the market has a clear signal, it is the signal for the majority. Based on the cash flow and financial capacity of each investor to decide.

"Personally, I think there are not always great opportunities like this. Many investors have cut profits and built financial solutions through sales policies as well as payment schedules and incentives for each customer profile. That means investors accept to reduce profit margins and this is an opportunity for home buyers and investors with real financial capacity.", Mr. Trung emphasized.

However, according to Mr. Trung, investors also need to pay attention to product segments. There are segments that, although deeply discounted, have no liquidity.