Property Market Slump: Issues Until Mid-2024

property market

The Vietnamese real estate business and property market has continuous issues, and analysts and insiders expect they may last through the third quarter of the year.

Property Market Problems: Continuing Legal Crisis

Nguyen Van Dinh, President of the Vietnam Association of Realtors, highlighted a recent poll during a September 22 event on sustainable property market growth in Hanoi. Over 70% of firms complained that financing sources and policies were inadequate, according to the report.

Real estate sales dropped 90% from 2022 to 2023, indicating market demand weakness.

Stifled Housing Development

In April, the government issued a VND120 trillion ($5 billion) loan package to promote social and worker housing. This package aimed to provide buyers and developers with loans at 1.5-2 percentage points below the market norm.

Disbursements have been scarce for over five months. This delay is due to social housing shortages.

Hoang Hai, Director of the Ministry of Construction’s Department of Housing and Real Estate Market Management, said that many housing and urban area projects had stalled. Legal concerns relating to land, particularly valuation and urban development plan adjustments, have caused these obstacles.

Property Market Problems: Continuingly High Prices

Despite falling from their late 2021 peak, home and land prices remain much higher than in 2020, before the real estate “fever.”

Apartment prices rose 5-7%, country home prices rose 15-20%, and land values rose 30% in the previous year.

President of the Vietnam Association of Construction Contractors Nguyen Quoc Hiep stressed at the session that legal issues, notably the convoluted tangle of rules that overlap and cause conflicts, account for 70% of the sector’s problems.

The real estate industry and property market must comply with 12 laws covering investment, urban planning, housing, and business. Hiep used a business example of a project that was 12 years late owing to land acquisition challenges.

Continued Market Issues

An economist by the name of Le Xuan Nghia has issued a warning that the real estate market may continue to suffer until the third quarter of the next year.

Demand for More Affordable Housing

After such a protracted period of upheaval, industry specialists have advocated for the construction of additional dwellings at reduced prices.

According to Nghia, there was a surplus of dwellings which led to the property market crisis that occurred a decade ago. However, the current problem is being driven by a lack of available resources, particularly low-cost housing. Remedying this shortage and resolving the legal challenges that have arisen are very necessary steps in revitalizing Vietnam’s real estate sector.