Work to be done: A woman walks past an old villa in Hanoi. The government is actively pursuing the renovation and rebuilding of old apartments and houses, and reviewing the funding for the implementation of social housing projects. — AFP
HANOI: Vietnam’s leading real estate trading website, batdongsan.com.vn, says the domestic rental market had a bright start to 2022 before declining in the second quarter.
Nguyen Quoc Anh, deputy general director of batdongsan.com.vn, said the level of interest and transaction volume for properties for sale tended to decrease due to several negative factors, including some large investors’ cancellations of purchasing land plots in Thu Thiem, Ho Chi Minh City, after winning auctions.
The US Federal Reserve’s interest rate increases caused domestic commercial banks to raise deposit rates, and mistakes in bond issuances also had a negative impact on the property market.
The market suffered badly from Hanoi tightening the separation of land parcels and real estate companies cutting off a large number of employees due to difficulties in the sector.
However, Le Dinh Hao, sales director of batdongsan.com.vn in the North, said the “rare bright spot” in this market was the recovery and strong growth for rent, especially in Hanoi.
“Specifically, in the fourth quarter of 2022, the level of interest from customers in Hanoi decreased by 8% for real estate sales but surged by 63% for real estate for rent, compared to the first quarter of the year.”
The growth of the rental segment occurred in all types , with the level of interest in townhouses the strongest with a growth rate at 179%, while the office segment grew by 153%, 77% for private houses, and 21% for apartments.
A survey of the rental market’s brokers released by batdongsan.com.vn on Dec 14 also showed positive signs.
Accordingly, 47% of surveyed brokers believe that real estate rental prices would increase slightly, while 16% said prices would increase sharply, and 23% said they would remain flat. About 10% said they would decrease.
The demand for rental properties recovered well in 2022, as Ho Chi Minh City witnessed the strongest recovery, increasing by 103% compared to the beginning of the year. Hanoi was up 63%.
This year, townhouses and villas were the two types of real estate for sale with the highest level of interest in Ho Chi Minh City. Hanoi data showed a similar trend. Searches for a townhouse increased by 49% in Ho Chi Minh City and 17% in Hanoi.
A survey of Vietnamese real estate consumer sentiment conducted by batdongsan.com.vn showed that in 2022, despite the property market facing many difficulties, 70% of households with incomes of 40 to 70 million Vietnamese dong (RM7,483 to RM13,096) bought at least one more real estate product.
When asked about their intentions to buy real estate, nearly half of those who did not have a home said they would buy within the next year. This rate is even higher among those who already own one or more properties.
In the survey, 79% of the people who own two properties said they would buy more in the near future.
These figures show that the demand for houses and land for living and investment has been and remains high.
Dinh Minh Tuan, the director of batdongsan.com.vn in South, predicts that prices in some segments in some regions may level off in the short term.Owners of those properties might sell due to pressure from high-interest loans.
Tuan recommended that real estate companies improve their credit ratings. Besides that, they need to have the issuance of transparent bonds with the availability of payment, aiming to provide attractive financing for buyers.
“For home buyers, it is necessary to update macro-financial and legal information, carefully select investors and projects, and consider other factors such as suitable financial plans,” said Tuan.
Property expert Can Van Luc said that authorities need to remove some bottlenecks for the market to develop better and healthier, including the legal issuance of property projects and bonds of property companies.
“In addition, it is necessary to control systemic risks, because there is a great connection between finance and real estate. By next year, the property market must definitely restructure to prepare the foundation for the future.” said Can.
“For real estate enterprises, they need to restructure and control cash flow risks, especially those of interest rates and exchange rates,” added Can.
“They should actively approach supportive programmes from the government, such as social housing, worker housing, and old apartment buildings. They must also have a specific and feasible plan for corporate bonds maturing in 2023 and 2024.”
Companies should diversify their capital sources from credit channels, stocks, bonds, and investment funds. Other factors they need to pay attention to are changes in management methods and the management of risks, especially legal and financial risks. In addition, they need to pay attention to the trend of green real estate and digital transformation, said Can.
Luc said: “In the next few years, the real estate market is expected to enjoy healthier and more sustainable development.” — Viet Nam News/ANN
