Short-term challenges, long-term opportunities
The Vietnamese real estate market is gradually stabilizing after a long period of stagnation. Although liquidity shows signs of improvement, investors still face many pressures as competition increases, capital is no longer as abundant as before. In that context, the growth problem is a big challenge, businesses must find ways to maintain profits in more strict market conditions.
According to Mr. Xavier Jean, Executive Director of Corporate Ranking of S&P Global Ratings, the level of financial leverage of Vietnamese real estate enterprises is still average but has increased rapidly in the large enterprise group, especially multi-industry corporations.
The increasingly Differentiation in Credit Quality makes large enterprises more vulnerable to economic shocks, refinancing risks and market psychological fluctuations. If a financial stress event occurs at a large corporation, the risk of spreading will not only affect the entire real estate industry but also have a strong impact on the banking system. This is similar to what happened during the 2021-2023 real estate crisis period, said Mr. Xavier Jean.
Vietnamese real estate enterprises still face higher refinancing risks than other countries in the region. The dependence mainly on short-term debt makes businesses vulnerable to liquidity fluctuations, while the domestic bond market is still limited and access to foreign capital is still limited.
Mr. Xavier Jean said that although the market still has many challenges, positive signs are gradually appearing. Market liquidity has improved, the sentiment of investors and home buyers is also becoming more optimistic. In particular, the adjustment in legal policies is expected to boost new supply and create more favorable conditions for the market in the coming time.
recovery opportunities and strategies for businesses to adapt
According to Mr. Nguyen Nhat Hoang - Senior Manager, ranking non-financial enterprises at FiinRatings, the number of real estate transactions is gradually entering a stable trajectory, the sentiment of investors as well as home buyers is improving.The application of new legal documents can help improve supply from 2025.
Mr. Hoang said that the conditions for capital mobilization are gradually becoming more favorable."The State Bank of Vietnam has set a credit growth target of 16% in 2025, to support liquidity for the economy, including the real estate sector.However, refinancing pressure is still a big challenge, with about VND100,000 billion of real estate bonds maturing in 2025, of which a significant part is the restructured items from 2023".
The market is witnessing strong differentiation between businesses. Investors with a solid financial foundation, effective management and a reasonable project portfolio will have a competitive advantage when the market stabilizes again. Meanwhile, businesses with weak liquidity may have difficulty in refinancing, leading to the risk of project delays or having to restructure operations".
Another important issue is home buyers' ability to pay. Mr. Hoang said that in the past 2-3 years, real estate prices in Vietnam have increased sharply, making home ownership more difficult. Therefore, ensuring housing prices are suitable for income in the long term will be an important factor to maintain sustainable demand, as well as investor confidence.
Although there are still many challenges, the long-term prospects of the Vietnamese real estate market are still quite optimistic thanks to fundamental factors such as urbanization, the increase of the middle class and foreign investment capital.
Mr. Hoang said that businesses with strong financial capacity and knowing how to adjust their development strategies towards sustainability will have a great advantage in the next growth cycle.
