Economic Growth in Vietnam to Recover in Q4/2021

Along with the economic growth recovering, the warming signals of the real estate market after the social distancing period also show that the real estate picture has the hope of recovering by the end of 2021.

Sharing at a recent seminar, experts said that despite the complicated development of the Covid-19 epidemic, the real estate sector still has many challenges. However, some positive signs, especially in the first 6 months of 2021, showed that the real estate market is still strong. According to Mr. Khoi, in the first 6 months of 2021, there were 55,000 real estate transactions, while in 2020 there were only 43,000 transactions.

Ho Chi Minh City Skyline

Deputy Director of the Department of Housing and Real Estate Market Management said that the market has shown positive signals over the past time and when the Covid-19 epidemic is under control, it is forecasted to develop strongly. However, this field still has some legal inadequacies that need to be improved in the near future. The Ministry of Construction is currently in the process of developing and finalizing a number of Decrees on the real estate sector to submit to the Government. In addition, the Ministry of Construction is proposing to amend the Law on Real Estate Business to improve the law, remove difficulties and obstacles, and create favorable conditions for real estate business.

Also sharing at a recent real estate seminar, The Vice Chairman of the Vietnam Real Estate Brokers Association said that at this time, brokers and investors have provided customers with technology to organize activities to introduce projects and organize transactions through high-technology platforms. This has helped the market to become more dynamic. 

By now, everyone has adapted and is ready for the next step, and organizing sales activities. Many places have started to open for sale and have successful trading signals in this October.

At this time, many customers returned to the market. Although buyers are still cautious, real estate shows signs of improvement. Customers will focus on markets with stable advantages.

Large, reputable investors have products that are trusted by customers. And this is a very good time for many customers to enter the market. Investors also offer many payment programs. Favorable payment, interest financing, even if the investor offers a policy of accepting housing and continuing to pay, this is a positive signal after the restart of the economy.

Compared with previous economic crises, the Covid-19 pandemic’s impact on the economy and the real estate sector is different. In the past, when there was a problem, the demand immediately dropped. But in this pandemic, the real estate market, despite the lack of supply and demand in some areas such as industrial real estate, logictics, housing, etc., is still developing well.

The second difference is that real estate prices have not decreased, reflecting that there is still high market demand in segments like the one just shared. Cheap cash flow and low interest rates in other countries and even in Vietnam have made the cash flow into real estate relatively abundant in recent times.

In terms of the market’s ability to recover, I think it is very positive because factors such as Vietnam’s economy are forecasted to recover quite quickly and will turn on a spring. The fourth quarter of 2021 is forecasted to increase. Growth will recover to about 4% and the whole year will grow by about 2.5%, and next year, there is a possibility that economic growth can reach about 6.5-7%.

Along with that, according to this expert, the state’s goal is still to focus on developing infrastructure and promoting stronger public investment in the coming time. Regarding the legal environment, next year, the Government is expected to submit to the National Assembly to amend four laws: the Law on Housing, the Law on Land, the Law on Real Estate Business and a number of points in the Construction Law. And this year alone, the Government has agreed to use one law to amend many laws. These factors create great conditions for the real estate market to develop.

The Director of Housing CBRE Vietnam also said that the pandemic has taken place since 2020 but it has not been seen until now, especially in the second and third quarters of 2021 when negative impacts were recorded to the economy, including the real estate sector.

For Ho Chi Minh City, this is the market most affected because the social distance lasted for 4 months, causing the real estate market to be heavily affected, especially the housing segment. Many projects, many implementation plans of enterprises have stalled. In the third quarter of 2021, only about 1,500 apartments were successfully offered for sale. Despite the impact of the epidemic, according to Mr. Kiet, the selling situation in HCMC is still quite high, showing that the demand is still good. Particularly in Hanoi market, sales are about 3,000 units, and the successful sale rate is still lower than Ho Chi Minh City. It is worth noting that the coastal areas such as Dong Nai and Binh Duong have developed prominently, such as Binh Duong with many apartment projects; Long An has offered an affordable apartment project for sale and the good success rate shows that the demand for affordable apartments is very good.

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