Expectations on the speed of market recovery

The Da Nang real estate market in 2023 continues to experience difficulties and challenges, but is forecast to have more bright spots in 2024. The recovery of the real estate market will hardly create a breakthrough, but will be intertwined with many new opportunities.

Looking back at the overall picture of the Da Nang market in 2023, Mr. Tran Trong Vu, member of the Real Estate Market Research Working Group, Vietnam Real Estate Brokers Association VARS in Da Nang, said that at the end of the year, the real estate market recorded more positive signals than at the beginning of the year.

Among them, the products that are being absorbed the most by the market with a surge in searches are land and low-cost apartments in some areas such as Nam Hoa Xuan, Hoa Xuan, Bau Tram Lakeside with prices increasing slightly from 5-10% compared to the beginning of the year.

In the apartment segment, sales were also well absorbed, including products launched for sale such as FPT Plaza with 27 million VND/m2; The Panoma of Sun Group recorded prices from 60-70 million VND/m2. This is a fairly low price compared to the supply level in the high-end segment.

“A notable point is that this year, real estate products that generate cash flow are sought after by many investors. Most products that generate cash flow of over 4%/year compared to the cost price have been successfully traded,” Mr. Vu assessed.

According to a member of the VARS Real Estate Market Research Task Force, unlike other localities, Da Nang real estate peaked in early 2019, then declined and fell sharply due to fluctuations caused by the Covid-19 pandemic.

By the time of the "peak" of the real estate market in 2022, this market quickly regained its form but real estate prices have not fully recovered. This shows that Da Nang real estate is sharper than other localities.

In addition, on the State side, it is necessary to study mechanisms and preferential policies specifically for affordable housing with the main goal of encouraging investors to participate in developing the supply of this segment, meeting the housing needs of households with average or near-average income.

Including preferential credit policies specifically to increase "purchasing power" or increase tax rates for second and third homes to reduce speculative incentives, and tax revenue can be recycled to support those with real needs. Support investors in developing and operating social infrastructure projects...

In addition, increasing investment and expanding connecting transport infrastructure. When distance is no longer an issue to consider when buying a house, the trend of moving from the central core area to the suburbs is inevitable. Researching and learning from the experiences of previous countries is also one of the solutions to shorten the development process and soon achieve the set goals.

Real housing demand is the "fulcrum" for restructuring the real estate market

According to forecasts from DKRA Group, the supply of land plots in 2024 may decrease slightly compared to 2023, fluctuating around 450 - 550 plots, mainly concentrated in Da Nang and Quang Nam.

Primary price levels continue to trend sideways compared to 2023. Liquidity and secondary price levels continue to decline in 2023, especially in projects that have not completed legal procedures and customers using borrowed capital.

In the apartment segment, new supply in 2024 may fluctuate at 800 - 1,000 units. The proportion of Class A apartment supply is expected to increase, mainly distributed in Ngu Hanh Son district.

Primary selling prices have not fluctuated much or have slightly increased due to pressure from input costs. Policies on quick payment discounts, support for principal and interest grace periods on bank loans continue to be promoted to stimulate market demand.

Mr. Tran Trong Vu commented that the market will have a large supply of apartments in the near future when real estate investors are completing legal procedures and gradually opening for sale from the third quarter of 2024.

In particular, Da Nang is currently the leading locality in the country in terms of the supply of social housing and affordable housing with more than 15,000 units. In the first week of 2024, the locality also publicly announced the sale of the first batch of social housing. However, in reality, it still does not fully meet the needs of the people.

Explaining this issue, Mr. Vu informed that on the one hand, social housing in Da Nang is currently mainly concentrated in the Lien Chieu area, while in the South and Southwest of the city, there are almost no new projects.

On the other hand, the current population growth rate in Da Nang is 2.51%/year, so the current supply of social housing is large but not enough to meet the demand. The clearest evidence is that in 2023, there were nearly 15 sales with 1,700 social housing apartments for sale and all sold out quickly.

According to the Vietnam Association of Realtors (VARS), from the story of the real estate market crisis, real demand is the biggest driving force to support the market.

In 2023, many real estate distribution floors faced many difficulties due to the scarcity of new supply, the market could not absorb, forcing the floors to cut staff. Many places even had to close and stop operating, but real estate brokerage businesses specializing in townhouses, apartments, and residential land products still thrived and the model was increasingly replicated.

For example, Tuan 123; Hoang Gia; Pho Xanh; Nha Tho Viet Nam are still operating strongly, maintaining a scale of hundreds of people. This proves that real demand is taking up a large proportion during this period.

The fact that real estate businesses are restructuring their products and shifting to the real estate and low-cost segments to improve liquidity is considered good news for the real estate market from this stage onwards.