Residential Real Estate Market Growth Locally

Condominiums to play a key role in housing supply in 2024

At the workshop “Vietnam Real Estate Market: Ready to Enter a New Era” organized by the Vietnam Real Estate Brokers Association, experts said that Vietnam’s residential real estate has undergone a localized development process. In large cities, residential real estate with the main type of apartment buildings will continue to record price increases in 2025.

Real Estate Market: Apartments Overwhelm Supply

Ms. Pham Thi Mien, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute (Vietnam Association of Real Estate Brokers) commented that the residential real estate market is localized. Compared to previous years, the market supply has improved positively each quarter in 2024, but overall it is still weak. Specifically, Ms. Mien said that the number of new products offered in the fourth quarter of 2024 was 28,000 products, 2 times higher than the previous quarter and 4 times higher than the same period in 2023. Thus, the total number of products offered in 2024 is 81,000 products, an increase of 50% compared to 2023 but only about 7% compared to 2018 – the year before the Covid-19 pandemic.

Condominiums to play a key role in housing supply in 2024
Condominiums to play a key role in housing supply in 2024

Residential real estate products are localized among segments when apartments still play a leading role, accounting for about 70% of the total new housing supply in 2024. In the apartment segment, the proportion of high-end and luxury apartment supply is overwhelming. The high-end segment in the fourth quarter of 2024 reached 47%, the luxury and super luxury segment also grew strongly, reaching nearly 27% in the fourth quarter of 2024.

Not only localized between segments, housing products of the real estate market are also showing localized characteristics according to localities and regions. 60% of new housing supply in 2024 will be contributed by projects in the Northern region. Meanwhile, the Southern and Central regions only account for 29% and 11%, respectively. Supply mainly comes from large-scale urban projects in suburban areas and provinces and cities adjacent to the two special urban areas. The number of new supply openings in the Southern region increased significantly in the last quarter of 2024 with a series of large-scale projects opening for sale, but still could not “keep up” with the growth rate of supply from the Northern provinces and cities.

The local nature also depends on the supplier. 62% of new housing supply is contributed by large investors and foreign investment organizations. In particular, the ecosystems of large corporations stand out. More than 55% of the supply is contributed by projects in the Vinhomes land fund. It is undeniable that large enterprises with financial potential have a great advantage in developing large-scale projects in urban areas, while also being able to ensure the completion of legal procedures. Small and medium-sized enterprises mainly develop low-cost or mid-range housing projects in suburban areas but also face many difficulties due to limited capital and difficulty in accessing loans.

Apartment Prices Will Continue to Increase

In 2024, the Hanoi apartment market continuously led the growth rate in selling prices over the periods, followed by the Da Nang apartment market. Compared to the base period, the average selling price of projects in the sample set in Hanoi, Da Nang and Ho Chi Minh City recorded increases of 72.4%, 49.9% and 34.3% respectively. The recovery of the general market, scarce supply and high demand have brought about this growth.

Apartment prices will continue to increase in the coming time
Apartment prices will continue to increase in the coming time

Ms. Mien also emphasized that housing transactions have grown steadily over the past year. The total number of successful transactions in 2024 was more than 47 thousand successful transactions, equivalent to an absorption rate of 72% on new supply. The transaction volume was nearly 3 times higher than in the fourth quarter of 2023 with more than 20 thousand transactions, nearly 4 times higher than the same period in 2023. The apartment segment dominated the market share, accounting for 75% of the total market transactions. More than 50% of primary transactions came from investment demand. Of which, there was a certain amount of speculation. Many products were “transferred” even before or after signing a sales contract. Towards the end of the year, the number of transfers in this form increased due to improved supply.

The Deputy Director of the Vietnam Real Estate Market Research Institute emphasized that in the future, the primary selling price of apartments will continue to be high when supply recovers strongly but is still scarce compared to demand. The secondary selling price will not decrease but the growth rate will slow down. Notably, the secondary selling price at projects of large investors that have been formed and have residents tend to increase. Meanwhile, at projects that have not yet formed infrastructure and have not attracted residents, the price continues to remain stable.

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