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Real Estate Market for the Remainder of 2023: Indication of Recovery?

Updated: Oct 20, 2023

According to CBRE, the real estate market in Q2 2023 began to exhibit slow but steady growth, particularly in Hanoi and Ho Chi Minh City.

In Hanoi, the supply of newly released apartments was modest, while liquidity showed positive signs as the number of units sold exceeded the new supply in Q2/2023.

The supply of new condominiums in Hanoi remained low, with only around 1,820 units released from 9 projects, of which only 2 were first-time releases, while the rest were subsequent phases. The total new supply in the first half of 2023 was impacted by existing macro challenges, reaching 3,926 units, a decrease of over 53% compared to the same period last year. In terms of location, the Western part continued to dominate the number of newly released apartments in Hanoi, contributing 54% to the total new supply in the first half of 2023.

It is expected that from now until the end of 2023, the number of newly released condominiums will improve, with over 6,300 units being launched, bringing the total new supply for the whole year to 10,500 units. The majority of new releases will come from subsequent phases of projects in the Western part of Hanoi and the high-end segment.

Regarding Townhouses and Villas, in Q2/2023, only 152 units were newly released from 2 projects in Thanh Xuan district and Hung Yen province (adjacent to Hanoi). This is the lowest recorded level of new releases in Hanoi since the Covid-19 period. Due to high inventory levels and ongoing macroeconomic obstacles affecting the market, most developers are cautious about their upcoming new releases. The total supply of attached houses with new land in Hanoi in the first half of this year recorded over 1,400 units, a 76% decrease compared to the same period last year.

The market is expected to pick up momentum from Q2/2024

According to financial expert Can Van Luc PhD, this is not a real estate crisis period, but rather a purification phase. Mr. Luc also outlined three trends in this market.

"Firstly, currently there are more opportunities than challenges because the biggest challenge for the real estate market has already been overcome.

Secondly, the real estate market has already begun to recover. Of course, compared to the golden period, the market has only recovered about 20-30%.

Thirdly, in the coming time, the real estate market will develop in a better scenario, with a strong push starting from the beginning of Q1/2024, as interest rates have been and are still decreasing; the permeation of policies at that time will also be better, especially with the transparency level when 4 laws are passed by the National Assembly in the upcoming session. In addition, legal violations and issues this year will be fundamentally addressed. At that time, the economic recovery and macro situation of Vietnam and the world will also be clearer."

According to the forecast of the Vietnam Real Estate Research Institute, the Vietnamese real estate market will officially recover in a "V-shaped" trend from the middle of Q2/2024.

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