Strong Growth Forecast For Real Estate Market In 2025

Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS), predicts that the market will gradually rebound, reaching a tipping point to enter a new real estate cycle from 2025.

Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, evaluates that the real estate market is showing initial signs of a turnaround, albeit localized in certain segments and regions. Experts forecast that this turning point will occur between Q2 and Q4 of 2024. Post-turnaround, the market is expected to recover in four primary phases:

• Exploration phase: Condominiums are expected to be the first segment to rebound, aligning with most buyers’ preferences.
• Consolidation phase: The real estate market in the current cycle is projected to enter a consolidation period from Q4 2024 to early Q2 2025, driven by growth in detached houses and townhouses.
• Upswing phase: The market is anticipated to enter an upswing phase from Q2 2025 to Q4 2025, characterized by the growth of land plots and villas.
• Stabilization phase: The market is expected to gradually stabilize and witness the emergence of new real estate types. Once stabilized, most real estate segments are projected to recover. According to the Deputy General Director of Batdongsan.com.vn, the stabilization phase for the current cycle is forecast to commence from Q1 2026 onwards.

Nguyen Van Dinh stated that the three newly enacted laws provide a solid foundation for the market to enter a new phase of safe and sustainable development. Mr. Dinh believes that after weathering the toughest period, surviving businesses are well-positioned with strong capabilities and have restructured to align with the new real estate cycle. While an immediate rebound may not occur, the market is poised for a gradual recovery, ultimately gaining the momentum to thrive in the new real estate cycle starting from 2025.

Following to Mr. Vo Hong Thang- Deputy General Director of DKRA Vietnam in the recent period, observed a recent uptick in the southern real estate market. The third quarter of 2024 witnessed a significant surge in sales volume for affordable housing, particularly in provinces adjacent to Ho Chi Minh City like Binh Duong, with properties priced around 30 million VND/m² accounting for a large proportion of transactions. The secondary apartment market is also thriving, with handed-over projects experiencing a 5-9% increase in transaction prices year-on-year. Mr. Thang forecasts that with a more favorable macroeconomic environment and attractive lending rates of 6-6.5% per annum, the real estate market is expected to sustain its recovery, especially in the affordable apartment and housing segment. Industrial real estate, land plots in well-amenitized areas with clear legal titles, and residential land are anticipated to be key drivers of market recovery.

Le Bao Long, Strategy Director of Batdongsan.com.vn, asserted that the likelihood of real estate prices rising is high post-law enactment. The new provisions in the three laws enhance the accuracy of land price updates.

• First, the government has mandated that provincial people’s committees are now responsible for determining the annual land price list, replacing the previous reliance on a land price framework. This decentralization ensures that land prices are more closely aligned with local market conditions.
• Second, the new law introduces a more refined land valuation method. While there were previously five methods, the deduction method has been eliminated. The remaining four methods—comparison, income, surplus, and land price coefficient—now have more detailed regulations, enhancing transparency and accuracy in land valuation.
• Third, the amended law provides specific conditions for granting land use right certificates to plots currently in use without certificates and free from disputes. The significant number of such plots in the market is expected to unlock liquidity and drive price appreciation for these properties and other real estate in the same areas once legal issues are resolved.

Based on the three aforementioned points, Mr. Le Bao Long predicts a surge in real estate prices post-2025. Land plots are anticipated to experience the most substantial impact, given the added influence of the subdivision ban in 105 cities and towns.