Real estate is still consolidating its foundation, unable to break through

The effectiveness of related policies such as the 2024 Land Law, the 2023 Housing Law, and the Real Estate Business Law, which were pushed forward by 5 months and applied from August 1, 2024, is a strong point that creates momentum for the real estate market. However, due to the need for policy penetration, experts predict that this momentum will continue. Although apartments still create a hot spot in terms of prices in the market, industrial real estate is still considered a sustainable and attractive bright spot.

Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn commented that the first 6 months of 2024 is the time when the real estate market begins to reverse. Positive signs of buyer psychology, the State Bank's interest rate management policy, and the macro-management's policy to remove difficulties have taken effect, promoting the market to "thaw" and enter a new phase.

In the third quarter, the market entered the exploration phase. At this time, liquidity reappeared but on a small scale, falling into a few types serving real housing needs such as apartments and individual houses. This development will continue into the fourth quarter and the exploration phase will end in early 2025.

If all goes well, the end of 2025 will be a period of real estate recovery, supply recovery and price growth. Only when the market enters a stable phase can real estate types fully recover. This phase may occur as early as the first quarter of 2026 - this expert predicts.

A survey by Batdongsan.com.vn shows that real estate searches in the first 6 months of 2024 are gradually recovering after "bottoming out" at the end of the fourth quarter of 2022 and the beginning of the first quarter of 2023. The recovery signal began to be clearer from the beginning of the first quarter of 2024 with strong fluctuations in the level of interest, which is also a cyclical characteristic of the real estate market.

According to Mr. Nguyen Quoc Anh - in the two largest markets in the country, Hanoi and Ho Chi Minh City, most types of real estate recorded positive growth in searches in the first two quarters of the year. Notably, the Hanoi real estate market recorded the strongest fluctuations in the land and residential land types with searches increasing by 118% compared to the same period in 2023.

Actual developments in the Hanoi market also recorded that in early 2024, there were "waves" of land and residential land in suburban and outlying districts, especially in areas with rapid urbanization, preparing to upgrade from districts to districts.

Along with land, apartments in Hanoi are also a type of property with a sharp increase in searches in the first half of this year, with an increase of about 46% compared to the same period last year. Meanwhile, private houses, townhouses and villas recorded searches increasing by 33%, 27% and 9% respectively.

In Ho Chi Minh City, although the number of searches for real estate types did not fluctuate as strongly as in Hanoi, it still recorded a fairly high increase. Specifically, the number of searches for land for sale increased by 45%, the number of searches for private houses increased by 34%, the number of searches for apartments, villas and townhouses increased by 33%, 25% and 22% respectively...

The selling price in the Hanoi market also recorded a breakthrough and was superior to that of Ho Chi Minh City. In Ho Chi Minh City, in the first 6 months of 2024, except for the apartment type, which recorded a 6% increase in selling price compared to the same period, the remaining types did not have significant fluctuations.

Meanwhile, in Hanoi, apartment prices skyrocketed by 31%. In fact, in the past few months, the primary market in Hanoi has been sold out after each sale despite the sharp increase in prices. Typical examples include projects such as Lumi Hanoi, some subdivisions in Vinhomes Smart City Urban Area (The Capony, Lumi Evergreen, Solar Park)...

Along with apartments, private house prices also increased by 32% compared to the first half of 2023. The reason is said to be due to the high price of apartments and the scarcity of supply, many people turned to looking for private houses in the same price range of 2 - 4 billion VND, causing the selling price in this segment to increase sharply. Similarly, the price of land, villas and townhouses in Hanoi also increased by 19%, 18% and 10% respectively.

In the first two quarters of the year, apartments were still the hottest segment in the real estate market. The scarcity of supply and rising prices brought apartments in Hanoi closer to the price level of apartments in Ho Chi Minh City, although less than two years ago this gap was quite large.

In early 2023, the average selling price of apartments in Ho Chi Minh City was about 47 million VND/m2, in Hanoi about 38 million VND/m2. Up to this point, in both of the country's two largest cities, the average apartment price has reached 50 million VND/m2. Notably, the price increase in apartments in Hanoi is not a local situation, but occurs in all segments, regions and projects.

Although the heat of apartment prices has not cooled down, experts say that industrial real estate is still a sustainable bright spot. Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Realtors (VARS) commented that the race will continue to heat up this year because industrial real estate is the "star" segment of the market.

Since the beginning of the year, many investors with strong capital in urban and housing construction have shifted to industrial real estate. This segment has maintained its leading position in the market over the past time, despite the fact that most other segments have fallen into a gloomy situation.

This type has the opportunity to explode because Vietnam is promoting investment in developing transport and logistics infrastructure, actively attracting foreign investment capital. Especially when FDI capital in industrial parks and economic zones accounts for about 35 - 40% of the total registered FDI capital increased nationwide in recent years - Mr. Dinh cited.

A survey by Savills Vietnam showed that the average rental price of industrial parks in the North in the first quarter reached 138 USD per square meter per rental period, an increase of 30% compared to the previous year. In the major industrial provinces and cities in the South, the rental price increased from 152 USD to 174 USD/square meter. Binh Duong, Dong Nai, and Ho Chi Minh City have very high occupancy rates, at 99%, 96%, and 95%, respectively.

Mr. John Campbell - Deputy Director of Industrial Services - Savills Ho Chi Minh City said that industrial real estate always maintains a good occupancy rate, and rental prices have also continuously increased over the past time. Industrial parks nationwide have an occupancy rate of over 80%. Key provinces in the North reached 83% and the South reached 91%.

“Vietnam's attractiveness is maintained thanks to its active participation in Free Trade Agreements along with advantages in terms of a young workforce, competitive costs, an export-oriented economy, a stable business environment, and a convenient geographical location... Therefore, industrial real estate is sought after by many domestic and foreign enterprises,” Mr. John Campbell analyzed.

Sharing the same view, Ms. Duong Thuy Dung - CEO of CBRE Vietnam assessed that industrial park real estate will be a bright spot in the coming time, when Vietnam benefits greatly from the shift in global supply chains.

In tier 1 markets such as Binh Duong, Dong Nai, Long An, Hai Duong, Bac Ninh, Hung Yen... there is almost no land left for lease. Instead, tier 2 markets such as Ba Ria - Vung Tau, Tay Ninh, Thai Binh, Thai Nguyen... are gradually becoming attractive destinations with abundant land funds and low prices.

Therefore, industrial real estate rental prices will continue to increase in the coming years, at a rate of about 5 - 9%/year in the North and 3 - 7% in the South. In addition, factory rental products will develop strongly with the improvement of the logistics sector.