Many segments are experiencing a decline in supply.

According to the report on the real estate market in Ho Chi Minh City and surrounding areas in the third quarter of 2023 recently announced by DKRA Group, the real estate market in this area has not yet had a breakthrough.

Specifically, in the land segment, in the third quarter of 2023, supply was recorded from 6 projects, including 3 new projects and 3 projects opening for sale in the next phase with 271 plots. New supply in the quarter recorded a sharp decrease, equivalent to only 21% compared to the same period in 2022.

New market sales recorded a decrease of 82% and 88% compared to the previous quarter and the same period last year, respectively. Transactions were mainly concentrated in product groups priced below VND20 million/m2.

Long An is the leading market for this type, accounting for about 47% of supply and 57% of new consumption. The primary price level has not changed compared to the previous launch but recorded an increase of 1% - 3% over the same period.

Incentive policies, discounts, etc. continue to be applied by investors to stimulate market demand. Secondary products have an average decrease of 8% - 12% compared to early 2023. Transactions arise mainly in projects with completed infrastructure and legal procedures.

For townhouses and villas, supply was recorded from 4 projects, including 2 new projects and 2 projects opening for sale in the next phase with 144 units. New supply decreased slightly, equivalent to about 93% compared to the previous quarter, equal to about 5% compared to the same period in 2022. Market demand increased slightly, recording positive signals compared to Q2/2023, but was still quite low, only about 2% compared to the same period last year.

Dong Nai is the market that accounts for a large proportion of new supply and consumption in the quarter, with rates of 47.2% and 88%, respectively. In Ho Chi Minh City alone, for the first time, there was no new supply for sale in the quarter.

The primary price level of this type has not fluctuated much compared to the previous quarter. Incentive policies, discounts, real estate rental commitments, etc. continue to be applied by investors to stimulate market demand.

Secondary market liquidity is at an average level, with prices recording an average decrease of 11% - 15% compared to early 2023. In the context of declining market liquidity, interest pressure, etc., investors have had to cut profits/selling prices to recover cash flow.

As for the type of real estate that recorded the most serious decline in 2023, resort real estate, the two types of resort villas and townhouses/Shophouses did not record any significant fluctuations in both supply and selling price. Meanwhile, demand for these two types remains low, and the consumption of townhouses/Shophouses is at its lowest level in the past 5 years.

Commenting on the resort real estate market, DKRA Group believes that the macro economy still has many challenges, capital flows are difficult, and it depends on the growth of the tourism industry, making the resort market in general and the townhouse/Shophouse segment in particular expected to face many difficulties in the coming time.

Apartments are the bright spot of the market in the third quarter of 2023

Accordingly, the new supply of apartment buildings comes from 17 projects, including 1 new project and 16 projects opening for sale in the next phase. The new supply in Q3/2023 is 2.5 times higher than the previous quarter but only 83% compared to the same period. Of which, in Ho Chi Minh City alone, it accounts for nearly 90% of the new supply launched for sale in the whole market.

In Ho Chi Minh City, the Grade A segment accounted for two-thirds of the new supply launched in the quarter, with projects mostly concentrated in the East of the city. The Grade C segment returned after a long absence, but only accounted for about 4% of the total new supply.

The market recorded positive signs compared to the second quarter of 2023, the absorption rate of new supply reached 72% with the consumption volume 2.8 times higher than the previous quarter or an increase of 13% over the same period. The booking time for projects opened for sale in the quarter lasted an average of 3 - 5 months.

Policies of quick payment discounts, extended payment terms, opening gifts, etc. continue to be applied by most investors to stimulate market demand. Primary selling prices have not fluctuated much, secondary market liquidity has recovered with selling prices recording a slight increase of 1% - 3% compared to the previous quarter, influenced by the recent move to lower lending interest rates at commercial banks.

Forecasting this market in the next quarter, DKRA Group believes that the new supply coming to the market in the last quarter of the year may decrease compared to the third quarter of 2023. Accordingly, in Ho Chi Minh City, there will be between 1,200 and 1,600 apartments for sale, while in Binh Duong, there will be between 700 and 900 apartments, Dong Nai with about 200 apartments, or Ba Ria - Vung Tau with about 150 apartments expected to be newly opened for sale.

Class A apartments will continue to dominate in Ho Chi Minh City while Class B and C apartments will lead the new supply in neighboring provinces. Transactions will be concentrated in projects with full legal documents, investors with financial potential and rapid construction progress.

Primary selling prices continue to remain high due to pressure from input costs, however buyers benefit from payment extension policies, discounts for early payments, and bank loan support from investors to stimulate market demand.

Prices and secondary liquidity are likely to continue to recover in the third quarter of 2023 thanks to interest rate cuts and the psychology of buying real estate during the peak season at the end of the year.