Unveil the dynamics of Vietnam’s real estate market in Q3 2023

The country analyses the remarkable rebound in Q3 2023 and predicting the path forward in the face of challenges

There was a rebound in real estate demand across Vietnam. VietnamStockImages/Shutterstock

In the third quarter of 2023, the Vietnamese real estate market displayed signs of recovery, particularly in the factory and logistics sectors. Maritime Fairtrade News quoted JLL on how the demand for leasing pre-constructed warehouses in the northern and southern regions witnessed a notable uptick, with absorption rates surging 2.6 times and 2.4 to 6.7 times higher, respectively, compared to the previous quarter. This revival extended beyond traditional players like retailers and e-commerce companies, also involving manufacturers and distributors.

In the housing and land segment, recovery momentum is expected to accelerate, with indicators from Batdongsan revealing a rebound in real estate demand across Vietnam in July. Notably, there was a six percent increase in demand and a four percent rise in property listings compared to the previous month. Interest in apartments, villas, land sales, and private houses and land lot projects showed positive growth.

The rental real estate market is also experiencing positive developments, marked by a 13 percent nationwide increase in demand for rental properties. Bedsits showed significant growth in both interest and listings, with a 33 percent and 12 percent increase, respectively. The search for apartments for rent rose by 14 percent, reflecting a demand increase without a corresponding rise in supply.

Related: Investor confidence soars as Vietnam real estate heats up

According to VN Express, Investors are launching new projects in the fourth quarter of 2023, accompanied by incentives like discounts, gifts, extended instalment periods, and favourable bank loan financing to stimulate home buying demand. Analysts anticipate a turnaround in the real estate market in the third quarter of 2024, driven by interest rate reductions, market support policies, and increased bank credit availability. The recovery is expected to be led by the apartment segment, potentially bouncing back in the first quarter of 2024.

However, despite the positive trends, analysts forecast at least three more challenging quarters for the property sector before a substantial recovery in the second half of the next year. Factors such as bureaucratic hurdles, high loan interest rates, and policy adjustments are expected to influence the timing and pace of the market’s recovery. The affordable and mid-range segments are predicted to recover earlier, while high-end products may take until early 2025.

The Property Report editors wrote this article. For more information, email: [email protected].