With no recovery in sight, real estate loses sheen as asset class

Speaking at the 2024 real estate forum organized in Hanoi last Friday by the association, its president, Nguyen Van Dinh, said: “The fall of real estate stemmed from uncontrolled development and lack of transparency and safety in the market over a long period of time.”

Between May 2022 and the end of 2023 the property market saw thousands of projects being suspended and many businesses shutting down with 80% of brokers quitting their jobs.

The most severely affected segment was resort real estate, whose supply fell by more than 80% and which saw only 700 transactions.

Besides the declining supply of beach villas, shophouses and condotels, some developers also failed to fulfill their profit-sharing commitments causing investor confidence to plunge.

The commercial and social housing segments, the most solid pillars of the market, saw supply plummet to 55,000, a third of the pre-pandemic number.

The average selling prices of apartments were VND51.7 million (US$2,068) per square meter in Hanoi, and VND71 million in HCMC. Only 46 new social housing projects were completed last year, taking the total so far to 4.7% of the 2021-25 target.

As for the land segment, many sellers cut prices by 30-40% but still found no buyers, the association said.

Pham Lam, chairman of real estate consultancy DKRA Vietnam, did not expect a quick recovery in 2024 with the market still facing many challenges, he said.

He expected the market to gradually stabilize and develop more sustainably in the next five to seven years if businesses proactively adapt to the impending legal changes.

Le Dinh Chung, general director of SGO Homes Real Estate Investment and Development Joint Stock Company, expected 30-40% of brokers to return to the real estate industry in 2024 when major sales programs and massive media campaigns are expected to be more frequent.