Property market may heat up toward the end of 2024: insiders

Vietnam’s property market is now in a state similar to that of 2013, when transactions plunged and major changes in policies were needed to ignite a “boom” in sales, said Nguyen Quoc Anh, deputy CEO of property listing platform Batdongsan.

Back then the National Assembly approved changes in the land law and issued a VND30 trillion ($1.27 billion) credit package with interest rates of 5-6% annually to boost social housing sales. The decisions proved successful as transactions were resumed, he said.

Similar policies are needed now, including providing new credit packages and maintaining a credit growth quota of 15-16% or even higher, Anh added.

Some such policies are already being implemented. The State Bank of Vietnam (SBV) recently lowered its policy rates to increase liquidity and support economic growth, signaling that a “turnaround” may be seen in the property market in the second quarter next year.

In 2013 credit growth jumped from 7% to 12%, which helped boost the market. As Vietnam’s credit growth has mostly been stable at 14% since 2019 and up until November last year, an increase this year is expected to create the same result, Anh said.

The property sector will also benefit from the recent relaxation in Vietnam’s bond issuance policy, which allows businesses to extend their bond repayment by up to two years if holders agree, giving industry insiders more reasons to believe that a revival in the market will happen by the end of next year, he added.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA), agreed.

Chau said that within the next 17 months the property sector may see policy changes that could help unfreeze transactions.

He added that the changes will take some time to have an actual impact on the market and that by the third quarter current issues in the sector are expected to be partly resolved.

Luong Dinh Thuy Van, CEO of consultancy Mogin Holdings, said that the property sector grew too fast in the 2016-2019 period and therefore it is likely that a slower growth, or even a recession, will occur in the 2022-2024 period.

For the last five years many projects have been built not to meet real demand but only to satisfy speculator greed, and this has pushed prices up to unreasonable levels, she said.

Prices will now start to return to the real value, and after this period a recovery will happen, she added.

“It will take until 2024 or even 2025 for the recovery to be noticeable,” said Van.