Real estate market recovery

Sharing at the event on the morning of December 14, Dr. Can Van Luc - BIDV's chief economist - assessed that the real estate market has begun to show more positive signs compared to last year and early this year.

Capital flows for investment markets are showing positive changes in the second half of the year. The stock market is recovering, bank interest rates have cooled down to pre-Covid-19 lows, and inflation is under control.

Mr. Luc assessed that Vietnam is one of the countries that will reverse its monetary policy early, with interest rates at least remaining the same or decreasing slightly in both deposits and loans in the coming time. The macro-economic picture also has many positive signals, with economic growth this year expected to reach 5-5.2% and inflation falling to 3-3.5%, compared to 5% at the beginning of the year.

Regarding real estate, experts have recently assessed that the National Assembly passed the 2023 Housing Law and the amended Law on Real Estate Business, and soon there may be an amended Land Law. This is unprecedented when all three important laws related to the real estate market were passed at almost the same time, creating a major change.

However, Mr. Luc said that the market still has "dark spots", such as the real estate bad debt ratio increasing from 1.72% at the end of last year to 2.89% as of September 2023, but still below 3% under control.

The corporate bond market is unlikely to recover quickly, with about VND23 trillion worth of bonds maturing in 2024. However, this figure is still lower than the peak maturity in September 2023.

Mr. Luc believes that in the current context, businesses need to continue to make recommendations to remove obstacles correctly and accurately, with solutions, without complaining. Businesses must also be determined to restructure, accept price reductions, diversify capital sources, markets, partners, and segments to reduce risks.

What is the market recovery roadmap?

At the event, Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan.com.vn - assessed that the Vietnamese real estate market in 2023 has shown positive movements and is similar to the reversal time of the previous cycle.

During the 2008-2012 cycle, real estate inventory increased continuously. By 2013, signs of a market reversal appeared when credit was loosened, a VND30,000 billion support package and the revised Land Law were passed to support the market.

At present, in terms of interest rates, since the beginning of 2023, the State Bank has adjusted the ceiling interest rate down 3 times and lowered the operating interest rate 4 times. Many banks have reduced their interest rates by 3-5% compared to the beginning of the year.

In terms of credit growth, the credit growth limit for 2023 is 14-15% compared to 14% last year. However, as of November 22, the entire system's credit growth only reached 8.21%, lower than the target set at the beginning of the year.

In addition, the amended Law on Real Estate Business and the amended Law on Housing were passed and took effect from the beginning of 2025. The real estate market also benefits from the Government's moves, many positive policies were issued...

Therefore, Mr. Quoc Anh predicts that the real estate market's turning point may appear from the second quarter to the fourth quarter of 2024. The market will then enter a new cycle and go through four stages: exploration, consolidation, growth and stability.

In particular, the recovery period may start from the second quarter of 2025 to the fourth quarter of 2025 and from the first quarter of 2026, the real estate industry may gradually enter a stable period.