Real estate market in provinces and cities in the Southern region is flourishing

The real estate market in provinces and cities in the Southern region gradually grew in the first months of 2024; in which, land, low-cost housing and apartments recorded higher growth rates.

This is also the housing segment that the market has real demand for. Currently, the recovery process of the real estate market is taking place slowly and steadily based on the previous recovery and accumulation momentum, with the support of economic growth and urbanization development.

Confidence is slowly returning

According to Dat Xanh Services Institute of Economic-Finance-Real Estate Research (DXS - FERI'), apartment prices in Ho Chi Minh City and neighboring provinces increased slightly by 2-3%, mainly due to new products from high-end and luxury projects opening for sale. Townhouses and villas in the South also recorded a slight increase in price of 1-3%, mainly in Dong Nai, Ba Ria-Vung Tau and Binh Duong.

In terms of supply, in the first quarter of 2024, Ho Chi Minh City and the southern provinces only had about 1,200 new real estate products for sale, mainly from the basket of old projects. There were only about two new high-end projects launched in the last quarter, but transactions were quite slow.

Although supply is low, apartment products in Ho Chi Minh City and the South have diverse prices in most segments.

The affordable segment ranges from 35-50 million VND/m2 (up 10-15% over the same period), the mid-range segment ranges from 50-80 million VND/m2 (up 5-7% over the same period), the high-end segment increases dramatically from 80-125 million VND/m2 (up 20-30% over the same period); the luxury segment has prices up to 300 million VND/m2 and remains stable compared to the first quarter of 2023.

Experts say that market confidence is gradually changing positively, the rate of customers registering to visit projects and model homes is increasing.

This shows that real estate buyers are starting to regain their confidence and prepare to return to this market.

It is forecasted that apartment prices in Ho Chi Minh City will continue to increase due to the scarcity of new supply on the market and the fact that only high-end and luxury products are being deployed, which will change the price level in many areas.

In Dong Nai province, the number of customers searching for real estate and the number of advertisements for sale have both increased sharply. The demand for buying real estate in Dong Nai has grown most positively in the land and villa segments, which are the strengths of this market.

Particularly, the land product group with price of 8-13 million VND/m2 and common area from 70-120 m2 has been the most sought after recently. This is also the product with the most improved transactions in the market during this period.

According to Batdongsan.com.vn, the number of real estate listings and searches nationwide last month all had positive growth compared to previous months. Especially with land, besides Ho Chi Minh City, land transactions in Long An, Binh Duong and Dong Nai all had impressive growth.

In fact, for the mid-range land segment, people in need of affordable products can only look to neighboring areas, where land and villa prices are still much lower than in Ho Chi Minh City.

Dong Nai Province Real Estate Association believes that the real estate market has improved in the first months of 2024, reflecting the strong development of infrastructure projects, especially the expressway connecting the province and Long Thanh International Airport.

On the other hand, the diversification of projects such as new urban areas, resorts, and social housing is creating many options for both buyers and investors.

Need resonance

According to Batdongsan.com.vn, the Dong Nai real estate market in the second quarter of 2024 is expected to be more positive thanks to many new projects starting to prepare to restart and open for sale on the market.

However, in the context of liquidity still not recovering strongly, it is likely that transactions will only be in the group of real estate buyers and investors with strong financial flows to hunt for real estate to accumulate and invest for the long term.

Experts say the positive signals of the real estate market are the result of many factors. These include efforts by the Government and ministries and branches to remove legal obstacles for projects; the National Assembly passed three amended laws: the Land Law, the Housing Law and the Real Estate Business Law.

In addition, the effect of the Project to Develop at least 1 million social housing units in the 2021-2030 period also increases land funds, projects, and housing products.

Dong Nai Province Real Estate Association believes that in the coming time, to promote the healthy and stable development of the market and at the same time limit speculation and unreasonable price increases, the association will advise and guide members on new points of the Land Law, Housing Law, amended Real Estate Business Law and decrees and circulars guiding the implementation of the above laws.

The association will also continue to make recommendations for real estate businesses to access credit sources and bonds with appropriate interest rates. Along with that, real estate businesses themselves need to restructure their products, participate in investing in building housing products that meet social needs so that supply and demand can meet.

In addition to legal and capital factors, the solution to create new opportunities for the real estate market to develop not only in Dong Nai but also in neighboring provinces and cities is to speed up the completion of traffic infrastructure such as: Bien Hoa-Vung Tau, Ben Luc-Long Thanh, Dau Giay-Lien Khuong expressways and Long Thanh International Airport.

According to experts, to support the real estate market, bank interest rates need to remain stable at a low level, creating a basis for maturing cash flows at banks to find investment channels that bring more attractive profits; including real estate, especially land products with not too high investment value and great profit potential. Thereby, continuing to promote local planning, focusing on public investment disbursement, creating a driving force for socio-economic development.

According to CBRE Vietnam CEO Duong Thuy Dung, signs of recovery in Vietnam's economy along with the Government's activities to promote the early implementation of the revised Land Law 2024 have contributed to strengthening the psychology of both institutional and individual investors in recent times.

2024 is considered a pivotal year for the market to transition to a new, healthier and more sustainable development phase. Market participants in 2024 will continue to benefit from home purchase and premises rental policies with many attractive incentives, helping to reduce investment costs.