Property market recovery likely in H2: securities firm

In its February investment outlook report it said the revival could begin in the second of this year. The average lending interest rate currently stood at around 11%, down from the peak of 13-14%.

The profit margin of property developers could recover in the coming quarters. They had proactively restructured their finances in 2023 by buying back bonds before maturity.

After a period of turmoil the firms had also tweaked their business strategies to become more cautious, cooperating with well-known partners to limit risks when developing projects.

But the skew in supply continued to be a major challenge for the housing market, with the shortage in the mid-priced segment becoming stark.

The average apartment price in HCMC stood at VND61.4 million per square meter by the end of last year. In Hanoi, it had been VND53.2 million.

"We believe that the residential real estate market has passed the most difficult period, and will show a clearer recovery from the second half of 2024," said the firm. "The Government has made efforts to resolve the three biggest bottlenecks -- capital, legal issues and skewed supply in 2023 and some positive results have appeared. But more measures are needed to improve demand and market sentiment."