"Uneven Recovery of the Vietnamese Real Estate Market in 2024: Challenges and Prospects"

The Vietnamese real estate market in 2024 is showing signs of recovery; however, the extent of this recovery is uneven across different segments. Industrial real estate and the apartment market in major cities are experiencing strong growth, while other segments such as land, villas, townhouses, and resort real estate are still facing sluggish conditions, with no clear signs of recovery yet.

Industrial real estate continues to maintain its leading position in the market, driven by growing demand, particularly in provinces with significant foreign direct investment (FDI) such as Bac Ninh, Bac Giang, and Thai Nguyen. These areas have become key drivers of industrial real estate growth thanks to their well-developed transportation links, secure legal frameworks, and, notably, their ability to attract high-tech enterprises such as electronics, semiconductors, artificial intelligence, and renewable energy. Not only has the demand for land leasing increased, but these areas also reflect the trend of many large corporations expanding their production scale, coupled with substantial investments in logistics infrastructure to enhance connectivity and facilitate the flow of goods. The combination of infrastructure investment and improvements in the regulatory framework has enabled the industrial real estate segment to attract more international investors.

The apartment market is also demonstrating impressive growth, particularly in Hanoi. Apartment prices are rising continuously, especially in the mid-range and high-end segments, while affordable housing has almost vanished from the market. Experts point out that the main reason for this is that new apartment supply is primarily focused on the mid-range and high-end markets, causing prices to escalate. In Ho Chi Minh City, the situation is similar, with most new apartment projects falling into the high-end segment, making it difficult for first-time buyers with average incomes to afford housing. This has created a severe imbalance between the demand and supply of affordable housing, despite the high actual demand.

In contrast to the vibrant industrial and apartment markets, many other segments have not yet shown clear signs of recovery. Land, villas, and resort real estate remain in a state of stagnation, with some areas even experiencing a loss of liquidity. The volume of land transactions decreased by about 20% compared to the same period last year, and villa prices in Hanoi and Ho Chi Minh City have also declined significantly. In suburban areas, land transactions are nearly nonexistent, mainly due to declining investor confidence and unresolved legal issues that further complicate the market. Certain areas, such as the Southwest and Northern mountainous provinces, continue to witness a sharp decline in transactions, indicating that recovery in these segments is still a distant prospect.

Resort real estate is currently one of the most challenging segments, with liquidity continuing to decline and investor confidence at an all-time low. Despite the tourism industry showing signs of recovery, resort real estate has been unable to capitalize on this advantage. Policies involving buyback commitments and leasing guarantees have not achieved the expected results. Most current resort projects are facing an oversupply, while customer demand is insufficient to absorb this supply. High investment costs and competition from other real estate types have significantly reduced the attractiveness of this segment. Moreover, the lack of targeted government support policies is also a key reason why developers are struggling to restructure products and attract new customers.

From late 2024 to early 2025, the Vietnamese real estate market is expected to enter a consolidation phase. The apartment, independent housing, and townhouse segments are forecasted to become highlights attracting investor attention. The stability of financial and legal factors encourages homebuyers to prefer products with real value to meet genuine housing needs. Apartment projects with advantageous locations, complete amenities, and reasonable prices will continue to be at the center of the market. At the same time, the independent housing and townhouse segments in central and near-central areas will also draw the attention of investors due to their high potential for appreciation and good rental prospects.

In contrast, the land and villa segments are not expected to recover until the second half of 2025, when the market gradually regains growth momentum, and these segments have the opportunity to attract investors once again. Areas with potential for infrastructure and new urban development will be the hotspots for investment. The recovery of these segments largely depends on macroeconomic conditions and government urban development policies. Some experts believe that when legal issues are resolved and investor confidence is restored, the land market will return to positive liquidity levels, especially in suburban areas with high development potential.

By 2026, the Vietnamese real estate market is expected to gradually enter a stable trajectory, with a broad-based recovery in both liquidity and value across various segments. Independent housing and townhouses are expected to continue to be market highlights due to their high potential for appreciation, while the apartment market will gradually stabilize, primarily meeting the genuine housing needs of residents. Government support policies, particularly in finance and taxation, will play an important role in promoting sustainable market development. Additionally, expanding transportation infrastructure and enhancing public services will also contribute significantly to the value of real estate, especially in suburban and satellite city areas.

Overall, the recovery of the Vietnamese real estate market from 2024 to 2026 will occur at different rates across segments. While industrial real estate and the apartment market show promising signals, other segments like land, villas, and resort real estate will require more time and government support to fully recover. Macroeconomic improvement, strengthened legal frameworks, and restored investor confidence will be key factors in helping the Vietnamese real estate market move towards a more stable and sustainable phase of development.