Challenges in the property market are set to last until 2024 as capital shortage, low liquidity and slower global economic growth cast a shadow over the industry.
The global economy is negatively impacting Vietnam, and domestically many policy updates on investment and operating in the property sector are delayed, said Luong Dinh Thuy Van, CEO of investment firm Mogin Holdings.
There is low supply and demand, while the financial market is unhealthy, she said.
There is a lack of market transparency amid force majeure factors like war, disease and natural disaster, she added.
Authorities are continuing to investigate and punish property and bond fraud while credit quotas remain limited. These could make investors lose faith in the industry and result in a large selloff but there are no buyers, she said.
Vietnam’s property market boomed in the 2016-2019 period when prices surged on projects developed for speculators to buy and sell for profit.
“When the bubble deflates, prices will gradually fall to match property value,” Van said.
Huynh Phuoc Nghia, a senior consultant of GIBC, said legal challenges and inspection in the property industry is set to last until next year.
The worst period is set to occur in early or middle next year, with things only improving from the third quarter, he added.
“Restructuring and filtering are set to become even stronger in 2023 than this year. Investors should prepare for a negative outcome.”
The CEO of a property developer in Ho Chi Minh City, who sked not be identified, said that the market will remain unstable in 2023 and that difficulties will gradually be resolved from 2024 onward.
“Market decline will not be measured in quarters but in years.”
Van said that investors should not expect high profit within the next 12-24 months, while investment prudence is more important than ever.
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