Real estate prices remain stable, liquidity has not improved much

In the August real estate market report recently published by DKRA Group, many positive signals show the recovery potential of the socio -economy in general and the real estate market in particular in the coming time. In addition to policies to promote the market, the implementation of many infrastructure projects also makes the FDI capital flow into Vietnam stronger.

In the first 8 months of 2023, the total FDI capital nationwide reached 18.15 billion USD, up 8.2% over the same period last year. Of which, there were 1,924 new investment projects with a total registered capital of 8.87 billion USD, up 69.5% and 39.7% respectively compared to 2022. Notably, real estate continued to return to the runner-up position with a total investment capital of 1.76 billion USD.

The above signs show that the market is gradually showing signs of strong recovery. However, that is a story in the medium and long term because according to many experts' predictions, the market will have to wait until mid-2024 for a real recovery. In the current period, the market will continue to move sideways to wait for cash flow.

According to the report data of DKRA Group on the real estate market in Ho Chi Minh City and surrounding areas in August 2023, liquidity has not improved significantly and primary prices have not fluctuated much in most types.

For example, with the apartment type, the new consumption volume only reached 84 units, down 87% compared to the same period. Policies of quick payment discounts, extended payment terms, opening gifts, etc. continue to be applied by most investors to stimulate market demand.

real estate prices are moving sideways, with many blocks of flats. — Class C apartments in the suburbs of Ho Chi Minh City are still well received by many people despite limited supply.

Meanwhile, new supply recorded a decrease to 253 units, only 19% compared to the same period last year. Ho Chi Minh City and Dong Nai were the two leading localities, accounting for 55% of the total new supply in the month. Of which, the Class A apartment segment accounted for 25% of the total new supply, concentrated in the eastern area of Ho Chi Minh City. Class B and Class C apartment segments held the leading position in neighboring provinces.

The demand in the secondary market has seen signs of improvement compared to last month, and the reduction in lending interest rates has made buyers more confident in their decision to open a loan to buy real estate. The selling price level in the primary market has not fluctuated much, while in the secondary market, some transactions still recorded a decrease of 50 - 150 million VND/unit, concentrated in projects with slow handover progress and the grace period for principal and interest has expired.

Regarding the townhouse - villa type, the new supply improved compared to the previous month, reaching 100 units. However, this figure is only about 33% compared to the same period in 2022. Dong Nai is the locality leading the new supply of the whole market in this type, accounting for 68%.

Consumption has improved compared to the previous month, reaching 34 units, but only equal to 59% of the same period last year. Most of the transactions were concentrated in projects in Dong Nai province that were opened for sale during the month. Discount and incentive policies for customers continued to be applied by investors to stimulate market demand.

The primary and secondary prices of this type did not fluctuate much compared to last month, market liquidity was at an average level and focused mainly on products that had completed legal procedures and were in operation.

As for the land type, the new supply and consumption of this type decreased significantly compared to the same period in 2022 with a decrease rate of 58% and 94% respectively. Specifically, in the past month, the new supply of the land segment was only 95 products, but the consumption only reached 5 plots. In particular, Long An is the main area in terms of new supply for sale in the month with a rate of 89% of the total new supply in the whole market.

real estate prices are moving sideways, with many blocks of color in figure 2 — Land is the type of property that recorded the most significant decline last month.

In terms of primary and secondary prices, there have not been many fluctuations compared to the previous month, and market liquidity has not improved much in the past month. Limited clean land fund, difficulties in accessing new capital sources, legal risks, etc. have greatly impacted the situation of scarcity of new supply in recent times.

According to DKRA Group, adjusting policies related to real estate credit, removing difficulties in project legal procedures, etc. are expected to bring positive signals to the market in the coming time.

Source