The real estate market in provinces and cities across the country is entering a very exciting year-end period when a series of projects are introduced to the market, many projects are officially opened for sale. Real estate businesses are expecting the abundance of cash flow at the end of the year to boost the liquidity of the real estate market.
Real Estate Market 2024: Apartment Buildings Are The Hottest
Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, said that the real estate market in 2024 shows positive changes. In fact, data from Batdongsan.com.vn shows that the level of interest in the real estate market begins to recover after 2023, meaning that there will be growth again from 2024. In particular, the level of interest increases in the middle of the year and the number of transactions remains stable throughout 2024. Apartments have maintained a hot trend in terms of selling price and delivery volume over the past year. Compared to the first quarter of 2022, this is the only segment that recorded a 4% increase in interest. Other types of properties have decreased in interest.
The Director of Batdongsan.com.vn in the Southern region affirmed that apartments are not only the type of property with the largest proportion of interest in the market but also the type with the strongest price growth. Specifically, up to now, apartments have achieved an increase of 45% compared to the first quarter of 2022, which is also the highest increase among real estate segments in the market. The selling price of this segment has increased the most in Hanoi and Ho Chi Minh City. Accordingly, compared to the first quarter of 2023, the selling price of apartments in Hanoi increased by 58%, and apartments in Ho Chi Minh City increased by 17%. Currently, the average selling price of apartments in Hanoi is 61 million VND/m2, in Ho Chi Minh City is 55 million VND/m2.
With the primary apartment supply, both Hanoi and Ho Chi Minh City markets have witnessed sky-high prices. For example, in the Hanoi market, some projects launched in 2024 include MIK The Continental with a selling price from 90 million VND/m2, Masteri Lakeside with a selling price from 80 million VND/m2, Masteri Grand Avenue with a selling price from 100-130 million VND/m2, Noble Crystal Tay Ho with a selling price from 165 – 270 million VND/m2, The Ninety Complex with a selling price from 68 – 85 million VND/m2, The Senique Hanoi with a selling price from 80 million VND/m2.
In Ho Chi Minh City, the selling price is also set at a high level. For example, the Eaton Park project has a selling price from 130 million VND/m2, The Opus One – Vinhomes Grand Park has a selling price from 88 million VND/m2, Masteri Grand View has a selling price from 130 million VND/m2, King Crown Infinity has a selling price from 120 million VND/m2, The Aurora Phu My Hung has a selling price from 90 million VND/m2, Thao Dien Green is selling from 180 million VND/m2, Kieu By Kitta has a selling price from 120 million VND/m2, Lancaster Tower has a selling price from 250 million VND/m2…
It is worth mentioning that although the selling price of apartments in the primary market in both Hanoi and Ho Chi Minh City is very high, the absorption rate is still positive in both markets. 70% of brokers participating in the survey of Batdongsan.com.vn said that Hanoi apartment projects are selling very well or well in 2024. This rate in Ho Chi Minh City is more than 40%.
The director of Batdongsan.com.vn in the southern region emphasized that apartments are always the type of property that goes first in the market recovery cycles because they are aimed at real housing needs. Transactions have increased sharply in small apartments. Projects with good transaction volumes are completed projects, with complete infrastructure, low construction density, reputable investors, good progress and preferential interest rates.
Low-Rise Real Estate: High Selling Prices, Declining Rents
According to Mr. Tuan, the low-rise real estate segment including private houses, townhouses and land also recorded high prices. For example, the average selling price of private houses in Hanoi is 197 million VND/m2, private houses in Ho Chi Minh City is 108 million VND/m2. The average selling price of land in Hanoi is 70 million VND/m2, Ho Chi Minh City is 57 million VND/m2.
Both land and private houses recorded an impressive recovery in market interest. Specifically, in Hanoi, compared to the first quarter of 2023, interest in land increased by 75%, private houses increased by 18%, and townhouses increased by 4%. During the same time period, in Ho Chi Minh City, interest in land increased by 26%, private houses increased by 12%, and townhouses increased by 3%.
However, the Director of Batdongsan.com.vn in the South said that low-rise real estate is losing its advantage in terms of cash flow. In other words, the cash flow for renting low-rise real estate is gradually being affected by the strong development of e-commerce. Mr. Tuan emphasized that e-commerce is developing and gradually taking over the shopping market share. Vietnamese people spend an average of 1 billion USD on online shopping each month. Of which, 32% of consumers shop online several times a week. The prominent product categories that attract a large number of online shoppers are electronics – beauty, fashion – home and living. 2024 retail e-commerce sales statistics on Shopee, Tiktok Shop, Tiki and Sendo have continuously grown strongly over the years.
The Vietnam E-commerce White Book said that e-commerce retail revenue in Vietnam in 2023 increased by 25% compared to 2022, reaching 20.5 billion USD, accounting for 8% of retail revenue of consumer goods and services nationwide. In addition, the number of online shoppers in Vietnam in 2023 reached nearly 61 million people and each person is estimated to spend 336 USD/year on shopping.
Therefore, Mr. Tuan said, the rental yield of low-rise real estate including private houses, townhouses and land has just returned to the level of early 2021, which is about 3%/year. This is not a good number for the rental market.
Looking at the market in the coming time, Mr. Tuan commented that in the next 3 years, the market in centrally-run cities will still grow the strongest. Selling prices in these areas continue to increase strongly, although they are already at a high level. Meanwhile, the suburban areas still have certain limitations when in this area, the need to connect family and work has not been met due to underdeveloped infrastructure, creating concerns for people when moving to this area.
