Vietnam's property market is expected to remain buoyant in the coming quarters. This is due to a number of positive signs of recovery, which were clearly evident in the first quarter.

Numerous positive signals

Buyers looking to buy a property in Hanoi. Photo: Cong Hung/ The Hanoi Times

Statistics from the Vietnam Association of Realtors (VARS) show that the real estate market has experienced positive changes in terms of transactions and absorption rates.

The report shows that the market recorded nearly 6,360 transactions, up 10% from the fourth quarter of 2023, and double the figure from the same period last year.

The overall market absorption rate reached 21%, marking a 4-percentage-point increase compared to the fourth quarter of 2023 and a tripling compared to the corresponding period. Among these, newly launched projects achieved a 51% absorption rate.

According to the VARS, around 70% of customers and investors are ready to purchase real estate in 2024 if suitable products are offered.

Among the segments, land and low-rise projects have received the most attention. As a result, the market is expected to recover even faster from the second quarter onwards.

Assessing the market's recovery potential, local economist Vu Dinh Anh believes that in addition to the positive market sentiment, expectations for a positive shift in the property market in 2024 are also based on two other "propellers": "three important (amended) laws, including the recently passed Land Law, Housing Law, and Real Estate Business Law, and the current low bank interest rate environment.

During the first quarter, 10 commercial residential projects reached completion, totaling around 4,706 units. This accounted for 34.48% of the total units achieved in the previous quarter and marked a significant increase of 71.43% compared to the same period in the previous year.

In the same quarter, licensing was granted to 19 new projects, amounting to 9,774 units. This represented a substantial 95% increase from the previous quarter and an impressive 111.76% rise from the same period last year.

Looking forward, there are 38 projects lined up for future sale, comprising 5,527 residential units. This indicates an 80.8% increase compared to the previous quarter and a notable 73% rise from the same period in 2023.

Additionally, construction remains robust, with 984 projects currently underway, encompassing a total of 421,353 units. This reflects a significant 115.2% increase compared to the fourth quarter of 2023 and an impressive nearly 141% surge compared to the same period in 2023. The Northern region leads in terms of project count, boasting 406 projects and 236,873 units.

Apartments are the most sought-after segment

An affordable housing project in Dong Anh District's Thang Long Industrial Park. Photo: Pham Hung/ The Hanoi Times

Regarding the sales prices of apartments in the first quarter, the Ministry of Construction noted that the condominium market continues to attract the attention of first-time homebuyers and medium- to long-term investors.

The average selling prices of some projects in Hanoi and Ho Chi Minh City range from VND50-70 million per square meter, according to the latest survey by the Institute of Construction Economics (Ministry of Construction) and the Vietnam National Real Estate Association.

In Hanoi, sales prices range from VND35.5-65.6 million ($1,401-2,589) per square meter, including Trinity Tower, The Pavilion apartment, TSQ Mo Lao, and the Sakura-Vinhomes Smart City.

In Ho Chi Minh City, secondary market condominium sales prices tended to increase compared to the previous quarter. Significant increases were seen in District 7, Tan Phu, Tan Binh, and Phu Nhuan districts.

Some projects have seen high average price increases, ranging from VND25.5-52.8 million ($1,006-$2,048), such as Thu Thiem Green House project (District 2), Happy City project (Binh Chanh District), My Phuc project (District 7), Green River apartment project (District 8).

In other provinces and cities, the selling prices of apartments range from around VND30-50 million ($1,184-$1,973) per square meter. 

Notably, according to surveys by some research organizations, there are condominium projects that have been in use for 5-10 years, and even old collective housing units are being sold at significantly higher prices.

Specifically, apartment prices in Hanoi in early 2024 are about 38% higher than in 2019.

Existing shortcomings

However, regulators and experts remain cautious about existing shortcomings in the market. Hoang Hai, Director of the Housing Management and Real Estate Market Agency, highlighted five major concerns.

A key issue is the persistent mismatch between supply and demand, with no sign of any meaningful improvement in supply despite growing demand.

In addition, the product structure has remained unbalanced, with a growing share of high-end housing and a considerable lack of affordable housing, social housing and housing for urban professionals.

Real estate companies have difficulty accessing credit and issuing debt.

"Although the government and relevant departments have been aware of these market problems and have put in place strong support measures, the resolution process has been slow and the market still faces challenges.

Deputy Minister of Construction Nguyen Van Sinh said that the Government, the Ministry of Construction, relevant ministries, localities and businesses will continue to focus on resolving difficulties in land clearance, land allocation and land pricing. This will help increase the supply of housing in the market, he stressed.