Difficulties ahead, but realtors are optimistic about 2023
The Vietnamese real estate market experienced ups and downs in 2022. After two years of Covid-19, the market was bustling in early 2022, not only in apartments, but also land market segments. Investors flocked to rural areas to ‘hunt’ for land, causing so-called ‘land fever’ in many localities.
According to the Ministry of Construction (MOC), real estate prices in Q1 2022 increased by 6 percent compared with October 2021. In some localities, sharp increases of 50-100 percent were reported.
However, the upward trend unexpectedly stopped mid-year. The market segment that fell was rural land. Later, this was seen in mid- and high-end apartments in large urban areas with few transactions and weak liquidity.
The decline in the market became clearer in the last quarter of the year. In order to stimulate demand, project developers offered unprecedented promotions with very attractive discounts.
However, as lending to the real estate sector was stuck, the market was heavily impacted.
Asked about market performance in 2023, Nguyen Van Dinh, chair of the Vietnam Association of Realtors (VAR), predicted two opposite scenarios. Which scenario will happen depends on the government’s macro policies.
If the credit policy does not change after Tet holiday and loans for the real estate market are given in dribs and drabs, the market will continue the tough days beginning in 2022.
If the policies on capital and corporate bonds are adjusted after Tet, the real estate market will get warmer and develop in 2023.
Regarding the liquidity of the real estate market, Su Ngoc Khuong from Savills Vietnam said that the housing market segment would see stability.
However, the shortages, especially in affordable housing, will affect market liquidity in general. Industrial real estate and offices will continue performing well as enterprises have demand for expansion.
Some experts said that the market would see a reversal in H2 of the year before it regains strength by 2024. Products satisfying the real demand such as apartments and townhouses would lead the market.
The recovery of the real estate leasing market is a tendency predicted by experts. The demand for leasing would increase for all types of real estate, especially apartments.