Will the real estate market in 2024 continue to be quiet?
According to a report by Vietcombank Securities (VCBS), sales activities are forecast to remain relatively quiet in the real estate market in 2024. For large-scale projects, investors may face pressure competitive force from the source of secondary transferred products from previous buyers. Agents and trading floors often limit large-lot purchases for distribution during periods when the market is not improving.
In 2024, VCBS believes that the adoption of amended laws (Housing Law, Real Estate Business Law, Revised Land Law) is expected to promote the recovery of the market in 2024, as in In the past, the promulgation of new Laws in the period 2013 – 2014 has contributed to strongly promoting project supply and transaction activities in the following years.
VCBS assesses that the real estate market in 2024 will not be vibrant once more
At the same time, management agencies have a basis to begin processing and approving project legal documents according to the new legal system. However, VCBS estimates that it will take regarding 6 months – 1 year for the new regulations to have a practical impact.
Assessing the outlook for 2024, according to VCBS, home loan interest rates will begin to adjust downward according to deposit interest rates, which may stimulate home buyers to start resuming their plans. Buy real estate for residential and long-term investment purposes. At the same time, the source of deep loss cutting products from home buyers using high leverage during the exciting market period has been significantly absorbed.
Regarding liquidity, some areas may recover sooner than the general market such as the urban core areas in Hanoi and City. HCM, serving the real housing needs of people. Besides, there are urban areas in provinces with high rates of economic development and urbanization; potential for industrial development and labor attraction; plan to develop a new administrative center and expand administrative scale.
The real estate market is forecast to not be vibrant once more in 2024 because it needs to wait for more supply incentives, resolve the supply-demand mismatch and access capital for businesses. However, strong differentiation will begin to show from 2024 between regions, segments and businesses.
Advantages for real estate businesses to preserve resources well and accelerate
Many experts believe that real estate businesses facing serious liquidity difficulties may have to accept leaving the market or gradually transferring their project portfolio and business segments to handle debt obligations. For large-scale enterprises whose projects are legally blocked, capital sources are still actively supported to avoid bad debt risks and projects being suspended for many years.
However, some businesses predict that it will be difficult to restore the position and scale of project development as before, considering the large scale of debt and the accumulation of many projects and land funds with high capital prices during the period. The hot fever causes the business efficiency of the above projects to not be high even when they are given favorable conditions to restart.
Among them, businesses that preserve resources well in difficult times and possess advantages in project development can make a breakthrough in the new cycle of the market, including: businesses holding a lot of clean land funds, less encountering legal problems and being able to quickly implement the project is considered more important than the size of the land fund. Possessing the ability to bid and develop projects to create actual products. Plan the project methodically, creating good added value for the product in the context that the cost of accumulated land funds is increasingly close to the market price.
Real estate businesses that conserve resources well will gain advantages in 2024 (Photo: TN)
Businesses have good financial health, use debt at a reasonable level and do not depend on paper forms of selling houses when the project is not yet qualified for business. Besides, the business has products suitable to market needs and has the ability to attract real residents; Having short project development and sales cycles and not being bogged down in projects that are too large for business resources or real estate market needs will gain advantages in 2024.
Regarding the supply of the real estate market in 2024, although the forecast is improved compared to 2023, the supply of new products in 2024 will still be limited. The supply will mainly be inventory or the next subdivision of existing projects because businesses prioritize consuming existing goods to gain cash flow and solve immediate financial needs; Implementing new projects during a quiet market period can bring significant financial risks to businesses.
According to the liquidity analysis team, some regions may recover sooner than the general market, whereby a strong differentiation will begin to show between regions, segments and businesses. Land and low-rise products in suburban areas and provinces with little economic growth momentum will still face difficulties and even continue to decline in price in some areas because the price level has been pushed up too high. There are many potential legal risks and the risk of local oversupply.
For high-rise products (mainly in Hanoi and Ho Chi Minh City) such as: high-end, luxury apartments or located too far from the center, there may be certain difficulties in selling and requiring Investors increase discounts; Mid-range apartments located within existing urban areas, well serving the housing and transportation needs of people have great appeal.
