Vietnam’s real estate market back on road to recovery

Vice Chairman of Vietnam Association of Realtors Tran Van Binh

Jun 10, 2024 / 06:00 PM

In early Q2/2024, Vietnam's real estate market is steadily recovered, with the launch of numerous projects in different segments and impressive sales.

As the economy recovers, the real estate market is showing positive growth month after month with numerous projects across various segments have been developed, all garnering significant interest and achieving impressive sales.

Locals seek information about a property project in Hanoi. Photo: The Hanoi Times

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After a prolonged period of stagnation, which severely affected the health of the real estate market and the community of real estate businesses, the sector has shown signs of recovery since late 2023. This turnaround is thanks to the government's efforts to resolve issues and promote the safe, healthy, and sustainable development of the real estate market. The market is currently recovering in terms of supply, prices, and transactions.

Research data from the Vietnam Association of Realtors (VARS) indicates that the real estate market in Q1/2024 continued to show positive changes. New supply has entered the market as developers activate a series of projects. Groundbreaking ceremonies, kick-off events, and efforts to refresh existing projects are taking place on a larger scale. The recovery wave is widespread, with an absorption rate reaching nearly 31%, and some 6,200 successful transactions—an 8% increase on the previous quarter and double that of the same period last year.

Newly launched projects, ranging from land plots to townhouses, villas, and apartments, are all experiencing good levels of interest, transactions, and price growth in both primary and secondary markets. Notable markets in Q1 2024 include Haiphong, Hanoi, Hung Yen, Ha Nam, Bac Giang, Hai Duong, Danang, Binh Duong, and Cantho.

In the first half of Q2/2024, the real estate market in Vietnam continues to recover month by month alongside the economy. Various real estate projects across different segments are being restarted, announced, and launched, drawing significant interest and achieving impressive sales. In the North, new supply will come from projects like Lumière Evergreen, The Sola Park at Vinhomes Smart City, MasCity in Bac Giang, Vaquarius Van Giang, Golden Crown Hai Phong, and Ha Long Marina in Quang Ninh.

In Ho Chi Minh City and its surrounding areas, numerous projects are being launched and booked, including Cara Riverview in Cantho, A&T Garden, Phu Dong SkyOne in Binh Duong, The Beverly, Vinhomes Grand Park, and Eaton Park in Ho Chi Minh City, and New Vegas in Kien Giang. In the Central region, new project launches like Da Nang Gold Tower, Libera Nha Trang, Sun Ponte Residence, and Sun Symphony Residence in Danang have warmed up the market after a long quiet period.

Most of these projects are well-invested in quality with clear legal documentation and increasingly diverse and attractive policies, meeting customer needs and preferences from the booking stage. Projects launched in the first half of Q2/2024 have garnered significant interest, with high booking rates and impressive sales, even though they primarily belong to the mid-range segment and above. The demand for high-end and luxury segments remains strong, not just for residential needs.

This new supply had a significant impact on real estate transactions in the first half of Q2/2024, as secondary market transactions, especially for apartments and residential land priced below VND5 billion (US$197,000), slowed with stable prices after a period of rapid growth.

In addition to investment in projects, collaboration models between developers and real estate agencies are being promoted to develop and commercialize projects to both domestic and international markets.

Return of estate agents

The real estate brokerage profession has become "hot" again, attracting many new and returning participants. Real estate businesses, especially brokerages, are competing for talent with appealing recruitment policies.

VARS data shows a sharp increase in the number of new and returning brokers from the beginning of 2024. In the first five months of 2024, approximately 40% of brokers have returned to the industry compared to the market's most challenging period. Learning from previous downturns, new and returning brokers approach the market with caution, equipping themselves with knowledge and skills and carefully choosing reputable agencies.

As a result, agencies with diverse, quality listings and professional training programs are preferred by real estate professionals. Smaller agencies with fewer than 30 employees face challenges in accessing listings from developers and risk losing staff to larger agencies amid the market recovery.

To attract and retain high-quality agents, VARS suggests that brokerage firms need to develop professional training programs and support brokers in obtaining necessary certifications. Additionally, they should offer attractive commission policies and flexible bonus packages to motivate outstanding brokers and create a professional work environment with clear career paths and appealing benefits.