By the end of 2023, the real estate market in Ho Chi Minh City had gone through nearly 3 years of facing difficulties, challenges, and declining market supply and demand.

Many opinions believe that the overall picture covered in dark colors may not stop there and will likely continue next year.

Continue "fire tests gold"

Commenting on the real estate market in Ho Chi Minh City in 2024, Mr. Vo Hong Thang, Director of Consulting and Project Development Services DKRA Group, said that in the short term, the market is unlikely to have positive changes but will continue the process of "fire testing gold" for investors, buyers and all parties involved in the real estate market.

The reason for the above situation is that policies and legal solutions need time to "absorb" and cannot have many positive changes in the short term, which invisibly increases pressure on new supply to the market.

The long project implementation time contributes to increasing financial costs, eroding the profits of investors and real estate businesses. Although the listed primary selling price does not fluctuate much, investors will still maintain "discounts" indirectly through policies to support principal/interest grace period, extend payment schedule or be willing to offer discounts of up to 15% - 20% for customers who pay ahead of schedule...

In the secondary market, looking locally, there will still be cases of offering for sale with a reduction of 10% - 20% or even more than 30% of the contract value.

Most of these transactions are concentrated in buyers who use high bank loan leverage, up to 70% - 80% of the total real estate value but have "blocked" cash flow after the end of the principal/interest grace period, mostly in urban area projects with large numbers of units, located relatively far from the center.

Unable to restore confidence in buyers, although deposit interest rates are continuously adjusted downward, most buyers still choose to save instead of investing in real estate because the recovery prospect is not really clear.

However, the end of 2024 can be seen as the beginning of the next growth cycle of the real estate market.

The residential real estate segment is expected to lead the market recovery, especially in projects in large city centers or neighboring areas with synchronous regional transportation systems, population compression and high housing demand.

Typically, for the apartment segment in Ho Chi Minh City and neighboring provinces (Binh Duong, Dong Nai, Ba Ria - Vung Tau, Long An, Tay Ninh), it is forecasted that there will be clearer improvements in supply in 2024, expected to reach about 12,000 units, mainly concentrated in the markets of Binh Duong and Ho Chi Minh City.

In addition, when the legal guidelines take effect, the public investment disbursement rate increases as well as the lending interest rate/deposit interest rate maintains a downward trend... will contribute to bringing remarkable bright spots to the real estate market.

Legal standardization in the new cycle

Project legality is considered one of the major bottlenecks of the real estate market in general or future housing in particular. Legal issues account for 70% of the problems of projects on the market today.

According to statistics from the Ministry of Construction, in Hanoi and Ho Chi Minh City alone, it is estimated that about 400 projects have encountered procedural problems. These bottlenecks have lasted for many years but have not been completely resolved.

For the above reason, many real estate businesses operating in the market are ready to circumvent the law, opening projects for sale without completing legal procedures, causing many potential risks and disadvantages for buyers as well as for the businesses themselves.

In the coming time, with the passing of the Housing Law and the Real Estate Business Law (amended), along with the synchronous application of the removal policies, it can be said that the project's legality will no longer be a "necessary condition" but will gradually become a "sufficient condition", a prerequisite for a project if it wants to bring its products to market.

This will help the market gradually become more transparent, avoid suspended projects and violations, and help protect the rights of real estate buyers.

Nowadays, green real estate has gradually become an inevitable development trend not only in Vietnam but also around the world. It is not only the standards for the housing segment but also applied to many types of real estate such as industrial park real estate, office real estate, resort real estate, etc.

At COP26 (the 26th United Nations Framework Convention on Climate Change), Vietnam committed to becoming a country with net emissions of “zero” by 2050, thereby demonstrating the State’s due attention to environmental protection, accordingly, the application of green standards in real estate development will gradually become a prerequisite criterion in the development stage of a real estate project.

Above all, 2024 is the year of screening and resolving the ongoing backlog in the market to prepare for a new development cycle of a more sustainable, safe and transparent real estate market.

Thy Hue