The number of real estate businesses returning to the market increased by more than 40%

According to the General Statistics Office's report, the performance of real estate businesses last year showed signs of improvement compared to 2023.

Accordingly, 2024 will record a large number of businesses resuming operations with more than 3,200 units, an increase of 42%, while this number in 2023 will be about 2,300 businesses.

The growth in the number of dissolved enterprises has also slowed down. Last year, nearly 1,300 real estate companies dissolved. On average, 107 enterprises in this industry went bankrupt each month, while the number of newly established enterprises decreased slightly by 2.7%, nearly 4,600 units.

Explaining the above developments, a representative of the Ministry of Construction said that last year's real estate market had surpassed the "bottom" recorded in 2023. Real estate supply after a long period of limitation showed signs of growth. In the third quarter of 2024 alone, 23 projects with nearly 12,000 products were licensed, an increase of 53% over the same period. Nationwide, there are more than 900 projects, with about 426,000 units built.

Positively improved liquidity has also encouraged many businesses to return to the market. The volume of transactions of apartments, single-family homes and land plots tends to increase. According to data from the Ministry of Construction, transactions of apartments and single-family homes in the third quarter of 2024 increased by 29%, and land plots by 13% over the same period.

The 2024 market has many incentives to encourage real estate businesses to return to operations, according to Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association (VNREA).

According to him, three real estate-related laws will take effect early from August 1, 2024, opening up a new legal corridor for the market. This has prompted many investors to launch their products after a long period of "waiting and waiting", contributing to increased supply in the second half of last year.

In addition, the newly issued land price list also helps to remove obstacles for projects that are stuck in calculating land use fees. This is what businesses expect because restarting projects will help to clear cash flow and promote liquidity.

2024 also saw a boom in early real estate corporate bond buybacks. Many real estate companies have cleared their bond debt.

According to data from the Vietnam Bond Market Association (VBMA), real estate is the second largest industry group in terms of bond issuance value in the first 11 months of 2024 with more than VND63,000 billion. This figure increased by nearly 23% compared to 2022.

This year, Mr. Dinh said that the volume of real estate corporate bonds is still large when it comes to repayment after a two-year extension. However, the maturity pressure is "insignificant", especially for investors specializing in housing development, because improved supply boosts liquidity, helping businesses mobilize a large amount of prepayments from customers.

Despite the most difficult period, the real estate market still faces a number of challenges. Mr. Can Van Luc, chief economist of BIDV Bank, assessed that the market recovery is still slow and uneven between segments and regions. According to him, the difficulties for real estate businesses are still legal issues, financial obligations and pressure of increasing input costs.

In addition, people's demand for real estate loans has not improved due to high housing prices, while people's real income has not improved.

In fact, in the past 3-4 years, the real estate market has experienced many "feverish" periods due to some speculative groups, trading floors, and brokers hoarding goods, pushing up prices, and surfing. Recently, many auctions in the suburbs of Hanoi recorded winning prices of over 100 million VND per square meter, according to the Ministry of Construction, showing signs of price increases to sell at a higher price to make a profit.

Similar to apartments, many trading floors take advantage of the scarcity of supply to "add extra price" when transacting with customers, fluctuating by 5-20% of the selling price. This activity causes housing segments to be increasingly priced higher, beyond the reach of the majority of people, posing many potential risks of instability to social and economic life.

"High housing prices can hinder the sustainable development of the market in the coming time," Mr. Luc commented.