According to the recently released report of the Vietnam Association of Realtors (VARS), the recovery of the real estate market still has many shortcomings, with strong differentiation between segments, regions, product types and suppliers.
In terms of product type, although there are more low-rise products for sale, apartments are still the leading type, accounting for up to 70% of the total new housing supply in 2024.
The supply still lacks suitable products, affordable commercial apartments - the main demand of the market, are officially "absent". The source of affordable apartments is only contributed by social housing projects with the quantity improved but only reaching 13.5% of the plan for the period 2021 - 2025.
The supply of new apartments in 2024 will mainly be in the high-end and luxury segment (priced from VND50 million/m2 or more), accounting for 65%. In the supply structure, the proportion of new apartments in the high-end segment in the fourth quarter of 2024 will reach 47%, an increase of 16 percentage points over the same period.
The proportion of luxury and super luxury apartment segments grew strongly, reaching nearly 27% in the fourth quarter of 2024, an increase of 23 percentage points compared to the fourth quarter of 2023. In general, in 2024, the whole market recorded nearly 10,000 apartment products priced from VND 80 million/m2 or more, an increase of more than 3 times compared to the same period in 2023.
By region, 60% of new housing supply in 2024 will be contributed by projects in the Northern region. Meanwhile, the Southern and Central regions only account for 29% and 11%, respectively.
Supply mainly comes from mega-urban projects in suburban areas and provinces and cities adjacent to the two special urban areas. The number of new supply openings in the Southern region increased significantly in the last quarter of 2024 with a series of large-scale projects opening for sale, but still could not keep up with the growth rate of supply from the Northern provinces and cities.
In terms of suppliers, 62% of new housing supply is contributed by large investors and foreign investment organizations. In particular, the ecosystems of large corporations stand out. More than 55% of supply is contributed by projects in the Vinhomes land fund. Because the new law brings many opportunities and advantages to larger enterprises. When according to the new regulations of the Land Law, land recovery to implement commercial housing projects only applies to large-scale projects with synchronous infrastructure.
In the context of rising land costs, this has prevented many small and medium-sized projects from being implemented, especially those targeting the affordable housing segment in big cities because small and medium-sized real estate enterprises do not have the financial capacity to implement large-scale projects, and have difficulty developing other commercial housing projects due to difficulties in negotiating with residents on site clearance.
Therefore, VARS believes that in order for the market to develop stably and sustainably, the State needs to have support policies to promote new supply into the market, especially affordable commercial housing products and social housing.
