Housing market to see more competition in 2024

Housing developers will launch lots of new apartment projects and sales promotions this year, making the market more competitive, according to real estate experts.

New supply would be steady and higher than in previous years, the Vietnam Association of Realtors said.

It estimated 15,000 apartments to enter the primary market in HCMC and Binh Duong Province in the first half of the year.

Real estate consultancy Savills Vietnam forecast the number in HCMC to quadruple from last year and 40,800 new units to be built by 2026.

Property consultancy DKRA Group said in a note that a jump in supply is likely in the second half of the year as the economy improves.

It estimated 12,000-15,000 new apartments would be built in HCMC and surrounding provinces this year.

A VnExpress survey found that this year many developers have begun or expedited work on projects and sales promotions.

Last month Phat Dat company began construction of an apartment project with 2,700 units in Binh Duong just three weeks after obtaining permits.

It also plans to run promotions in the first half of this year.

Singaporean-owned CapitaLand Group also announced plans to start work on the Sycamore apartment complex in Binh Duong in the first quarter.

A&T Group recently began construction of the A&T Sky Garden apartment project in Thuan An City, and Phu Dong Group broke ground on the Phu Dong Sky One project in Di An City last month, both in Binh Duong.

Both are set to go on sale in the first half of the year.

Numerous new projects have also been launched in HCMC, including The Opus One, The Eaton Park, The Global City, The Emeria, The Gem Riverside, and The Global City in Thu Duc City, and The Aurora in District 7.

Besides, many developers with completed projects are offering more incentives.

One of them, with a project in the west, has halved the down payment to VND150 million (US$6,114) and slashed the fixed loan interest rate from 5% per year to 1%.

It is also offering a 7-10% discount on upfront payments.

Another with a project in Binh Chanh District has slashed the interest rate from 6% to 2% and is offering other incentives including a furniture package worth VND500 million.

Projects currently under development are also offering more flexible payment plans and promotions.

Vo Hong Thang, director of consulting and project development at DKRA Group, said prospective buyers are still cautious, which means developers should offer reasonable prices and lucrative promotions.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan, said there would be fierce competition among developers to sell their projects this year.

When the amendments to the Land Law take effect in 2025, developers will only be allowed to collect 5% of the total price from customers until the houses are ready for sales, he said.

So developers would try to sell as many units as possible this year to boost cash flows, he pointed out.

With the economy still in recession and increasing competition from new supply, developers would have to offer even more incentives than last year to attract buyers, he said.

"Developers with existing projects will seize the opportunity to sell quickly in the first half of the year because, by the end of the year, new supply with unforeseeable sales policies will pour into the market."

Trinh Thi Kim Lien, CCO of Dat Xanh Services’ research unit DXS-FERI, also expected developers to speed up construction and sales.

Since, in the current situation, profitability would not be as important as sales and cash flows for businesses, big incentives and policies favoring buyers would be needed to stimulate demand, she added.