Real Estate Market Potential Recovery in 2024

The real estate market in Vietnam grappled with significant challenges in 2023, marked by a period of stagnation and a decline in prices. However, with the government’s support and the emergence of positive dynamics, there are burgeoning signs of recovery in 2024, raising the question: Is a market revival on the horizon?

The persistent high demand for housing, particularly in urban areas, coupled with the continuation of government support policies, is expected to stimulate the market

According  to the “Real Estate Market Report 2023 and Forecast 2024” recently published by the Vietnam Association of Realtors (VARS), the year 2023 posed substantial difficulties for the Vietnamese real estate market.

The year witnessed a notable surge in the bankruptcies of real estate companies, coupled with a significant decline in the formation of new corporations. With 1,286 real estate companies dissolved and 4,725 companies established, the market was confronted with immense challenges. On average, about 107 real estate companies filed for bankruptcy each month. In this challenging context, numerous real estate brokers were compelled to abandon their professions or switch careers. Companies faced a variety of scenarios, including bankruptcy, downsizing, layoffs, and restructuring to ensure survival. This was largely due to the absence of control, transparency, and safety in market development.

The supply of social housing and other housing segments exhibited shortages. In 2023, only 46 social housing projects were completed, accounting for a mere 4.7% of the plan for the 2021-2025 period. Apartment prices experienced a continuous growth, particularly in the central areas of major cities.

The fourth quarter of 2023 brought a glimmer of hope, with a 6% increase in supply compared to the previous quarter, totaling 21,774 units. This included approximately 7,000 newly launched products as major corporations unveiled their offerings for 2024.

Industry experts predicted a potential recovery of the real estate market in 2024, driven by macroeconomic stability and an anticipated GDP growth of 7%. The persistent high demand for housing, particularly in urban areas, coupled with the continuation of government support policies, is expected to stimulate the market.

For a sustainable market recovery, the government’s ongoing support policies and programs are crucial. However, it is equally important to enhance market oversight and management to curb non-transparent and speculative practices. The implementation of rate cut plans for home loans and land prices should be continued to facilitate real estate investment.

Given these dynamics, the Vietnamese real estate market is projected to exhibit clearer signs of recovery in 2024. Nevertheless, the extent of this recovery will hinge on various factors, including the macroeconomic situation, housing demand, and government policies.

By Giang Tu, Vietnam Business Forum