Vietnam sees resurgence in demand for real estate 

The real estate market showed signs of recovery at the beginning of the third quarter of 2023.

There has been a notable revival in demand within the factory and logistics market, following a subdued performance in the initial half of the year. 

As per a report by JLL, during the third quarter, the demand for leasing pre-constructed warehouses in the northern region began to stabilize, demonstrating a net absorption rate 2.6 times higher than that of the preceding quarter, equating to nearly 90,000 square meters. 

This resurgence in demand is not limited solely to retailers and e-commerce enterprises, it has also garnered the participation of a more diverse group, including manufacturers and distributors.

A similar trend is also observed in the southern region by JLL. The southern region’s logistics market has shown encouraging signs as it enters the year-end period, with a net absorption rate of approximately 86,000 square meters. This heightened demand and occupancy rate can be largely attributed to projects initiated between the end of the preceding year and the beginning of the current year. 

Additionally, Cushman & Wakefield’s report revealed that during the third quarter, rental activities for ready-built factories and warehouses in the southern region have gained considerable momentum, with absorption levels reaching 2.4 and 6.7 times higher than the previous quarter. Notably, among these regions, Dong Nai stood out as the leader in terms of rental demand.

Experts said the housing and land segment will have the fastest recovery momentum.

According to Batdongsan (a real estate market platform), the indicators for real estate sales during the first seven months of 2023 have shown limited improvement. Notably, there has been a 33 percent decrease in overall interest levels and a substantial 48 percent reduction in the number of property listings compared to the same period last year.

However, recent trends indicated a rebound. In July, real estate demand across Vietnam surged by six percent, and the number of property listings also increased by four percent compared to the previous month.

This resurgence is visible across all categories of real estate for sale. Particularly noteworthy is the seven percent increase in interest in apartments and villas when compared to June 2023, with land sales showing a six percent increase, and private houses and land lot projects growing by three percent. The number of property listings across all types of real estate also saw an increase ranging from two to nine percent.

In most provinces and cities, the real estate market experienced a notably more vibrant July, with prominent areas including Hanoi and Ho Chi Minh City, which saw respective increases of nine and eight percent respectively, compared to the previous month. Other regions with a significant uptick in real estate interest in July include Quang Ninh (up 18 percent), Hai Phong (up nine percent), and Da Nang (up eight percent).

The rental real estate market is showing positive developments. Data from Batdongsan showed a 13 percent nationwide increase in demand for rental properties, accompanied by a two percent rise in the number of property listings compared to the previous month.

Bedsits demonstrated the most remarkable growth in both interest and the number of property listings, with increases of 33 percent and 12 percent respectively. It is worth mentioning that the number of searches for apartments for rent increased by 14 percent, although the number of available listings for this type remained consistent. This data partly reflected an increase in demand for apartment rentals without a corresponding increase in supply.

Dinh Minh Tuan, director of Batdongsan’s southern region. Photo credit: Batdongsan

Dinh Minh Tuan, director of Batdongsan’s southern region, said that during the initial nine months of the year, apartment searches continued to dominate, accounting for over 40 percent of all searches. Moreover, rental demand has once again surged since the beginning of 2023. This trend indicated that the real estate housing sector in the Ho Chi Minh City market is poised to become the dominant segment in the near future.

Apart from the psychological recovery observed among real estate seekers, investors have also initiated the launch of numerous new projects in the fourth quarter of 2023. They are accompanied by attractive incentives designed to stimulate home buying demand, such as substantial discounts, gifts, extended installment periods and favorable bank loan financing.

It is anticipated that the market will undergo a turnaround in the third quarter of 2024, driven by signs of interest rate reductions, the gradual implementation of market support policies and an increase in bank credit availability. Notably, the apartment segment is expected to bounce back earlier, potentially in the first quarter of 2024.

Furthermore, even land parcels situated near areas with infrastructure challenges are also poised to regain their liquidity swiftly. According to Batdongsan’s latest real estate consumer sentiment report, more than 61 percent of the over 1,000 surveyed individuals are planning to acquire real estate within the next year. Among these, the majority are making these purchases for investment purposes, with land being the most sought-after property type, accounting for 40 percent of the preferences.

Photo credit: iStock/ SunnyVMD

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