When the Real Estate Market in Vietnam Can Recover?

According to many experts in Vietnam, the recovery of businesses as well as the real estate market may not reach a fast pace in the first 3 months when the economy is beginning to reopen and social distancing measures are being eased. However, the recovery is expected to enter around the first quarter of 2022.

After opening the economy, returning to the “new normal” state will take some time, during the first 3-4 months of production and business activities the market will recover about 50-60%. The real estate market will follow a similar trend. After the Lunar New Year, the recovery rate can reach 70-80%.

Vietnam's real estate market may suffer decline in 2020 - Vietnam Insider
Ho Chi Minh City at Night

That shows, that the health of real estate businesses cannot fully recover before Tet holiday. Businesses have to take more time because the 4th Covid-19 epidemic has had a great impact.

According to the Vietnam Real Estate Brokers Association, in October 2021, many big cities and many localities across the country have basically completed the vaccination for those aged 18 years and older, along with the screening and isolation of people infected with covid 19. out into many safe green areas. 

It is also the time for localities to gradually lift restrictive measures against the epidemic. At the same time, reactivate production activities and economic development in the context of the new normal. And including real estate project development and real estate transaction market.

However, the supply in the market has not improved much, the projects that are completing the investment preparation procedures (the number is very large) will certainly still face many difficulties and cannot participate actively in the market.

Accordingly, the health of Vietnam’s real estate market in the fourth quarter of 2021, according to this unit, real estate developers and contractors heavily affected by the Covid-19 epidemic can recover about 50% before the end of the year.

Meanwhile, real estate brokers are still really weak and cannot fully recover in the fourth quarter of 2021, reaching only about 30%, but the market will also receive a number of new businesses.

Customers with low demand to buy houses, recover and generate low demand in the fourth quarter of 2021 are estimated to reach 30% of the demand to buy houses compared to the same period in 2018 and 2019.

According several experts, the absorption rate of the whole market is forecast to reach over 40% after the relaxation period. The weakening phenomenon of development enterprises that have to carry out M&A projects appeared in the fourth quarter of 2021. But not much more and mainly in small projects.

It is easy to see that after the epidemic, real estate prices in the fourth quarter of 2021 will still be adjusted to the same level as the same period in 2020. Projects that do not adjust, and still keep the same price as the beginning of the second quarter of 2021 will certainly have low absorption rate.

Batdongsan.com.vn’s report for the third quarter of 2021 said that Ho Chi Minh City was the market most affected by the 4th Covid-19 epidemic, most clearly affecting almost the entire real estate market in the city. This street and the neighboring provinces in the South have to suspend transactions. The number of listings for sale of apartments, townhouses, and land plots in Ho Chi Minh City in the third quarter of the past year decreased to a record, down 78%, 86%, and 87%, respectively, the demand for products in these segments was also low, down 41%, 55%, 62% respectively.

The most difficult time for the market was the period of July and August when the Government applied a wide-ranging distance. Entering September, the good news from the mass vaccination campaigns and the news of reopening the economy made the real estate market hopeful. 

Starting from the middle of September 2021, the level of real estate interest of users across the country showed signs of recovery. The trend of looking to buy real estate increased by nearly 55% compared to the previous August. At the same time, Ho Chi Minh City recorded a 35% increase in interest while Hanoi also increased by more than 50%.

Forecasting about the time when the market can fully recover, experts say that, with different localities, the recovery speed of the housing market will also be different.

Accordingly, if under the conditions of successful disease control, the number of F0 cases does not increase, the coverage of two vaccines reaches 90%, and the economy reopens as well as production recovers smoothly in the fourth quarter of this year. In 2021, Hanoi city will be the locality with the fastest and fastest recovery in real estate transactions and supply in the country. It is expected that by the end of October, the interest in housing search in Ha Hoi will reach 100% compared to the time before the epidemic.

Similarly, when the above conditions are met, the central real estate market, in particular, Ho Chi Minh City and Da Nang, can achieve 100% recovery of transaction demand by the end of 2021, more details will be in December.

Other News:

New Real Estate Buyer’s Criteria Post-Pandemic in Vietnam

Demand for Real Estate in VN to Increase by 50% in Q4/2021

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