The chain of housing supply decline that has been going on for many years and record lows in 2023 is forecast to improve this year, especially in big cities such as Hanoi and Ho Chi Minh City.
Biggest housing supply shortfall in 10 years
Information about the market recently, the Ministry of Construction said that in the fourth quarter of 2023, the supply of real estate has changed in an uptrend. However, overall, the supply of real estate in 2023 is limited compared to 2022.
Specifically, compared to the third quarter of the same year, the fourth quarter of 2023 has the number of commercial housing projects eligible for sale of houses formed in the future by 104.26%; the number of completed commercial housing projects is equal to 119.05%; The number of infrastructure construction investment projects for the transfer of land use rights for housing construction is completed by 188%.
Regarding real estate inventory, the Ministry cited data reported by 53/63 localities showing that the inventory of real estate in projects in the fourth quarter was about 16.315 units (including apartments, individual houses, land plots).
Specifically, apartments with 2.826 units; 5.173-unit detached dwellings; land 8.316 plots. Accordingly, it can be seen that the proportion of inventory is mainly in the segment of individual residential real estate and land plots of projects.
The inventory in the condominium segment in the fourth quarter is about 88.42% compared to the third quarter of 2023; The inventory in the land segment is about 115.66% compared to the third quarter of 2023 and the inventory in the individual housing segment is about 78.93% compared to the third quarter of 2023.
“In general, in 2023, the inventory of real estate in projects for the segments of apartments, individual houses and land plots tends to decrease,” the Ministry of Construction said about the real estate market in the fourth quarter of 2023.
According to CBRE Vietnam (under CBRE International Real Estate Investment and Trading Group), in 2023, housing supply will continue to be limited. The supply of newly launched housing in two major markets, Hanoi and Ho Chi Minh City, is at the lowest level in the past 10 years.
While Hanoi has a total of nearly 10.300 apartments and 2.600 low-rise houses launched (down 32% and 84% respectively compared to 2022), in Ho Chi Minh City, the supply has decreased even more, with a total of just over 8.700 apartments and 30 low-rise houses launched for sale (down 54% and 98% respectively compared to 2022).
Forecast of a sharp increase in social housing supply
Many real estate experts also expect that this year, new supply will grow again in the two major cities of the country. In particular, the supply of social housing is forecasted to increase sharply because the target assigned by the Government to develop this housing segment this year is very high.
Forecasting the real estate market this year, Mr. Nguyen Van Dinh – Chairman of the Vietnam Association of Real Estate Brokers (VARS) – said that confidence in the market will gradually be revived when about 20 mechanisms and policies to support the real estate market issued in 2023 will “absorb” and promote positive impacts. In addition, the bank’s deposit interest rates are at a record low in 2023, causing a large amount of money to find more attractive investment channels, including real estate.
According to Duong Thuy Dung – Managing Director of CBRE Vietnam – this year, new supply is expected to grow again in Hanoi and Ho Chi Minh City. In the short term, supply continues to be limited, while strong demand will cause selling prices to remain anchored at high levels.
Hanoi market is expected to record nearly 16.000 apartments and more than 6.000 new low-rise housing units launched. In Ho Chi Minh City, supply is expected to remain limited, receiving more than 9.000 apartments and 1.000 low-rise houses respectively.
Previously, experts assessed that the real estate market this year is expected to recover, especially when a series of important laws are passed. Policy and legal factors are on the roadmap to be amended and approved, ensuring synchronization and consistency will contribute to improving market confidence.
