Vietnam’s real estate market has shown signs of weakening since the beginning of 2022 and this has continued for more than a year now. Solutions related to policy are said to only have a calming effect and help businesses endure a little bit. The market still needs time to return to a normal state.
According to Dr. Can Van Luc, Member of the National Monetary and Financial Policy Advisory Council, Chief Economist of BIDV, currently, access to capital is easier than at the end of last year and the beginning of this year. The main reason is that the State Bank of Vietnam barely controls the credit growth limit this year. Meanwhile, many banks now want to lend but can't because of the relatively low credit demand, both in business and individual segments
By the end of the first 5 months of the year, new credit growth was 3.17%, while the figure in the same period last year was 8.09%.
Giving the scenario for the real estate market to recover in the near future, Mr. Luc said that there are 4 main impulses. Firstly, inflation and interest rates in the world have leveled off and are on a downward trend. Vietnam is also gradually reducing interest rates and this is an extremely important factor for the real estate market.
Second, by the end of this year, economic recovery of the world and Vietnam will be clearer. Current forecasts suggest that next year the world economy, including Vietnam, will grow more positively than this year.
Third, the legal problems have basically been removed. At the same time, real estate-related laws such as the Law on Land and the Law on Housing will be passed by the National Assembly in the near future.
Finally, Vietnam's public investment disbursement plan for this year is about VND 713,000 billion, 25% higher than last year and if the above figure is fully disbursed, Vietnam's GDP will grow by about 2 percentage points. The expert said that this year and next year are two important falling points of the disbursement of public investment capital. In fact, in the past 5 months, disbursed public investment has increased by about 18% over the same period.
“The real estate market will recover by the end of this year or early next year at the latest, but it will depend on each segment. The market will not recover immediately, but gradually”, said the expert.
Economic expert, Dr. Dinh The Hien analyzed that in order for the real estate market to thaw, there must be some opportunities. The first is that the appearance of cash flow while the second is that the price drops to a certain level enough for buyers to believe and accept. And if everyone wants to keep the price high and wait for the opportunity, from now until the end of the year, the market will hardly change.
Regarding the prospect of 2024, in the context of a recovery in the world economy, stable exports and a more favorable domestic market economy, Mr. Hien said that the real estate market may thaw. However, this will mainly happen in urban residential areas where investment can be exploited. At this time, the price level will decrease or go sideways, not increasing.
The experts added that in 2024, real estate investment cash flow will be clearer, meaning people will buy and sell in places where the potential is clearly seen and can be exploited, rather than buying and selling massively from urban to remote rural areas as before. Speculators now no longer have confidence to buy land and then enjoy as much profit as 5-7 years ago, so they won't risk losing money.
According to Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association (VNREA), many provinces and cities currently have a number of projects with legal problems, which need local authorities to take more drastic actions.
From a business perspective, Mr. Pham Duc Toan, General Director of EZ Property, said that real estate is characterized by its dependence on psychology. Therefore, looking at the current context, he predicts that the market will remain quiet until the end of 2024.
Source: vietnambiz
