Promising second half 2024 outlook for Vietnamese real estate
Expectations are high following the approval by the National Assembly of the Real Estate Business Law, the Housing Law, and the Land Law, which will soon enter into force.
Local insiders anticipate a robust rebound in the real estate sector in the second half of 2024, backed by extraordinary support.
Signals of recovery
| TechnoPark Tower is a state-of-the-art office building within the Vinhomes Ocean Park ecosystem, Gia Lam District. Photo: Vinhomes |
After "bottoming out" in late Q4 2022 and early Q1 2023, the number of prospective homebuyers rebounded in the first half of 2024, with interest levels fluctuating.
Data from the Batdongsan.com.vn online platform in Vietnam's two largest markets, Hanoi and Ho Chi Minh City, show that most real estate segments have experienced positive growth in search volume.
In particular, buyers in Hanoi are most interested in plots of land. Searches for land and residential lots increased by 118% year-on-year.
Search volume for apartments in Hanoi also rose sharply in the first half of 2024, by around 46% year-on-year. Meanwhile, searches for houses, townhouses, and villas grew by 33%, 27%, and 9%, respectively.
Ho Chi Minh City also saw a fairly significant increase in search volume for different types of property, but not as volatile as Hanoi. Specifically, land searches increased by 45%, houses by 34%, and apartments, villas, and shophouses by 33%, 25%, and 22%, respectively.
In terms of primary market residential prices, real estate consultancy CBRE reported that the current average price has approached VND60 million (US$2,344) per square meter, with prices in Hanoi and Ho Chi Minh City being fairly similar. The proportion of new high-end supply continues to increase. Coupled with a stronger presence of developers from the south, this is helping to maintain high price levels.
House prices have also increased by 32% compared to the first half of 2023. Due to high apartment prices and limited supply, many buyers have shifted their search to landed houses priced between VND2-4 billion ($78,152-$156,061), leading to significant price increases in this segment.
Land, villa, and shop house prices in Hanoi increased by 19%, 18%, and 10%, respectively.
New real estate laws set to influence how market evolves
| Investors in Hanoi attend an event to launch a real estate project. Photo: Pham Hung/ The Hanoi Times |
According to local sources, the property market's outlook for the second half of the year will also become more apparent with the imminent implementation of a series of property-related laws. The Land Law 2024, the Housing Law 2023 and the Real Estate Business Law 2023 will take effect from August 1, 2024 instead of January 1, 2025. The property market will be affected by these new legal instruments. In particular, Decree No. 71/2024/ND-CP on land prices will come into force on the same day as the coming into force of the Land Law.
Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) Hoang Hai said that the Housing Law and the Real Estate Business Law
contain many important innovations in market management and development, creating more favorable conditions for organizations and individuals involved in the real estate market.
He added that many provisions of the Housing Law and the Real Estate Business Law can be enforced immediately without waiting for the government to issue guidance documents, such as the exemption of land use fees, land rental fees and change of land use purpose for apartment renovation and reconstruction projects.
Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), believes that the new regulations will have a positive impact and will drive the recovery and redevelopment of the property market.
"Furthermore, the development of the market in 2023 shows that it has overcome its most difficult period and will start to recover from the end of 2024," he said.
According to Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management, if there are “boosts”, the market will follow a strong growth scenario.
"The government affirms that there is a sufficient basis for the issuance of detailed regulations and implementing guidelines to ensure the enforcement of the Land Law, Housing Law and Real Estate Business Law when these legislations come into effect, thereby creating a coherent legal framework and promoting the healthy development of the real estate market," he said.
