Experts said that in the second quarter of 2024, although there are still many difficulties and uneven recovery across segments, Vietnam’s real estate market is overcoming the most difficult period, starting to record more positive moves in terms of total real estate supply.
he real estate market is currently showing many positive signs and is considered to be on the path of recovery. It is forecasted that the market will gradually recover from the U-bottom, the time of recovery is fast or slow depending on both macro and micro factors, the most important of which is still the improvement of market confidence.
Experts from Dat Xanh Services Institute of Economics – Finance – Real Estate (DXS -FERI) forecast that the real estate market in Q2/2024 (residential real estate segment) may fall into one of the ideal scenarios, expectations or challenges.
Specifically, in the ideal scenario, supply increases by 30% – 40%, floating interest rate from 8% – 10%, selling price increases by 10% – 20%, absorption rate reaches 40% – 50%.
With the expected scenario, the supply will increase by 20-30%, and the floating interest rate will be from 9% – 11%, the selling price will increase by 3% – 5%, the absorption rate will reach 30% – 35%.
In a challenging scenario, supply increases by 10% – 20%, floating interest rates from 10% – 12%, selling prices are flat, absorption rates reach 25% – 30%.
Based on market analysis data as of March 31, 2024, the DXS-FERI expert is inclined to the expected scenario. Accordingly, the real estate market in the second quarter of 2024 will have a new supply increase of about 20-30%, selling prices will also increase slightly by 3-5%, and the overall absorption rate will reach from 30% – 35%.
In the second quarter of 2024, overall, although there are still many difficulties and uneven recovery across segments, Vietnam’s real estate market is overcoming the most difficult period, starting to record more positive moves in terms of total real estate supply. Accordingly, all types of real estate recorded an improvement in new supply.
For office for lease, the supply is forecast to reach about 2.15 million m2 of floor space in Hanoi, up 2% quarter-on-quarter, and about ~2.7 million m2 of floor space in Ho Chi Minh City. HCM, up 4% quarter-on-quarter.
The average rental price remained stable quarter-on-quarter in Hanoi area with a rental price of about 21.5 USD/m2, rent in Ho Chi Minh City. HCM is forecast to increase by 5% to 34 USD/m2. The average occupancy rate recorded a slight increase in both markets with 86% (up 1 percentage point quarter-on-quarter) in Hanoi market and 91% (up 1 percentage point quarter-on-quarter) in Ho Chi Minh City market. HCM
For the supply of retail space, it will maintain about 1.8 million m2 of floor space in Hanoi area and increase to about ~1.53 million m2 of floor space in Ho Chi Minh City. HCM, up 3% quarter-on-quarter. The average rental price remained stable in both areas with rents of about 46 USD/m2 in Hanoi market and 53 USD/m2. The average occupancy rate recorded a slight increase in Hanoi market with 86% (up 1 percentage point quarter-on-quarter) and maintained 90% in Ho Chi Minh City market. HCM.
Notable new supply will come from Vincom Mega Mall at Vinhomes Grand Park, Ho Chi Minh City. HCM. Projects are unlikely to be completed in time for Q2 2024, so supply will not fluctuate much.
Retail real estate is expected to have an early & more vibrant recovery when the economic situation is prospering & shopping and entertainment demand has a slight recovery. Investors are increasingly interested in the retail real estate segment & are actively preparing suitable land funds: large-scale integrated shopping malls in suburban areas. In the short and medium term, big names such as Lotte, AEON, Vincom … are still market leaders besides new names such as THACO, Central Pattana …
Industrial real estate will continue its stable growth momentum, the Northern region is expected to add about 15,000 hectares, up 3% quarter-on-quarter. The southern region is expected to add about 27,900 hectares, up 1% quarter-on-quarter.
New rental demand will come from the recovery of the manufacturing industry, increased export orders & the entry of many new FDI enterprises.
The occupancy rate is expected to remain stable in the North and increase very slightly (~1 percentage point) in the South. Rental prices are forecasted to continue to remain stable and remain competitive compared to regional markets, which is a factor that helps maintain the occupancy rate at a high level of industrial parks.
For residential real estate, in Q2 2024, it is estimated that new supply will increase by about 25% compared to Q1 2024, mainly from projects that have opened for sale or have started construction in the previous period. It is expected that the supply of new products (only statistics from projects that have been planned to open for sale) is about 4,500 products, bringing the total cumulative supply of the whole market in Q2/2024 to 45,200 products.
The increased supply gives customers more choices, and also contributes to improving absorption, as well as the overall trading situation in the market.
