The real estate market has hit bottom.
A report from Maybank Investment Bank on the two markets with the largest market share in our country is showing a significant recovery. The Hanoi market leads the recovery, with the supply of new apartments for sale in Hanoi reaching more than 19,000 units, higher than the level of 2023.
In contrast, HCMC remains sluggish, however, signs of recovery are emerging as stalled projects begin to restart from Q3/2024. Selling prices have improved in both markets, up 15-30%, reflecting buyer confidence and stable demand.
In addition, transaction liquidity has recovered from the credit crunch, supported by new construction permits and easing financial conditions. These developments point to a gradual stabilization and recovery, setting the stage for broader growth in 2025 as the market regains momentum.
From those recovery factors, Maybank forecasts a positive outlook for the real estate industry for 2025 thanks to sustainable macro factors, a favorable interest rate environment, growing infrastructure spending and improved supply thanks to relaxed regulations.
"Looking ahead, we believe the property market is gradually exiting the recession cycle and is poised for a strong recovery starting from 2025," Maybank Investment Bank experts said.
Profit growth is positive.
This recovery is expected to be driven by two major sources of demand: real end-user demand and investment demand. In addition, large infrastructure spending plans in the coming years are expected to act as a major catalyst, boosting demand in the market.
Attention is now turning to new supply as we move into 2025 and beyond. Early signs of regulatory easing, particularly in HCMC, are emerging and further improvements in regulatory procedures are expected next year. The implementation of new regulations in August 2024 is expected to speed up the regulatory approval process, helping to boost buyer confidence and trust.
In the long term, real estate developers can mitigate the impact on profits by passing on this additional 5–10% cost to buyers, ensuring financial sustainability while adapting to the new regulatory environment.
Commenting on the risk of debt default of enterprises in the real estate sector, analysts from Tien Phong Securities Company predict that it will be less likely to happen when the real estate market gradually becomes more vibrant again.
If facing cash flow difficulties, real estate businesses can reduce product prices to sell and can avoid the risk of default. The amount of money customers pay in advance is increasing, which will also improve the financial health of businesses.
Meanwhile, looking at the financial reports of real estate companies, the ratio of long-term loans to total loans reached its lowest level of 51% in the first quarter, before recovering to 55% in the third quarter of 2024, reflecting efforts to mobilize loans to prepare for upcoming real estate projects. Meanwhile, the debt to total capital ratio reached a record high of 66%, also showing that the prepayment from buyers is increasing.
MBS Securities Company forecasts that the entire stock market's profits could record a remarkable growth of 25% year-on-year in the fourth quarter of 2024, the highest since the second quarter of 2022, supported by a low interest rate environment and manufacturing on the path to recovery.
In particular, real estate industry profits are expected to grow strongly with 1,005% in the fourth quarter, partly due to the low base level of the same period, partly due to the ability to hand over large projects.
