Property recovery expected in late 2024

By Nguyen Tieu   October 22, 2023 | 05:00 am PT
Property recovery expected in late 2024
Buildings in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The property sector will have to endure at least three more challenging quarters before it begins to recover in the second half next year, analysts forecast.

In the third quarter, 6,000 property transactions were recorded nationwide by the Vietnam Association of Realtors (VARS), a 1.5 times more than the second quarter.

There positivity on the market now compared to the beginning of the year, said Vo Hong Thang, director of markets at property consultancy DKRA Group.

In the third quarter alone 4,800 apartments, houses and land lots were introduced to the market in the south, and 70% of them were sold, he added.

Thang said that a small portion of new supply is expected to enter the market this quarter, and demand will be stable thanks to declining loan interest rate.

But strong recovery signs will only be really visible starting from July next year at the earliest, he added.

"Property units that meet real demand, especially those in the affordable and mid-range segments, will be bought first. Speculative assets will have to wait three quarters for a recovery."

Duong Thuy Dung, senior director at property consultancy CBRE Vietnam, also said that the affordable and mid-range segments will start to recover in the third quarter next year.

High-end products such as villas and shophouses will recover slower in early 2025, she added.

Le Dinh Chung, a researcher at VARS, said that policies are needed to encourage both supply and demand.

So far only around 10% of projects have been able to overcome bureaucracy, and loan interests remain higher than the expectations of most buyers.

A recent survey by property listing platform Batdongsan found that 40% of respondents expect a recovery in the second half next year at the earliest.

Deputy director of the platform Nguyen Quoc Anh said government policies to support the sector will start to show results in the last two quarters next year.

"The property market will bounce back next year if policies remain supportive."

Su Ngoc Khuong, a senior director of property consultancy Savills Vietnam, said that both fiscal and monetary policies are being adjusted towards a healthy recovery.

Law changes are set to reduce bureaucracy and increase the supply of homes in 2024 and 2025, Khuong argued.

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