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Week 15/2024 – Central Vietnam Real Estate News Summary

Week 15/2024 – Central Vietnam Real Estate News Summary

In this weekly or sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to the real estate market in Vietnam.
We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact on Central Vietnam’s property market.
You will find a summary, a link to the source as well as CVR’s take on the article.

We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.

“CVR: Western Management – Local Knowledge”

  1. 1. The Real Estate Market Will Undergo a Transformation in 2024.


The Real Estate Market Will Undergo a Transformation in 2024.

The “Vietnam Real Estate Market Forum 2024 – Overcoming Challenges” revealed positive trends in the final quarter of 2023. New product introductions surged 6% to 21,774 compared to the previous quarter, while transactions remained steady at 5,710. The absorption rate rose significantly, reaching 26%, double the rate in 2022’s corresponding period. Industrial real estate emerged as the leader, attracting significant foreign investment thanks to its modern and smart development direction. M&A activity also thrived, with the real estate sector making up 23% of the total value in 2023, with foreign investors driving the most successful transactions.


Experts predict a new development cycle for the Vietnamese real estate market in 2024. While the global economic situation will play a role, the government’s policies like the revised Land Law are expected to accelerate recovery. Social housing and affordable commercial housing are seen as key drivers, potentially leading the market from mid-2024 onwards.


Economists like Dr. Nguyen Minh Phong believe the market will overcome its challenges. He points to the rising transaction volume: 2,700 in Q1 2023, 3,700 in Q2, and 6,000 in Q3. Additionally, credit to the economy and falling interest rates are seen as positive signs. Finally, ongoing policy resolutions and legal improvements implemented in 2023 are expected to further enhance market stability.



2. Signs Show That The Residential Real Estate Market Will Be Vibrant In The Second Quarter.


Signs Show That The Residential Real Estate Market Will Be Vibrant In The Second Quarter.

The real estate market in Vietnam, particularly in Hanoi and Ho Chi Minh City, is anticipated to surge in the second quarter, as per a report by CBRE released on April 10th. Despite a record low number of apartments for sale in a quarter, the market continues to face limited supply.

In Hanoi, over 2,300 new apartments and 30 low-rise houses were introduced in the first quarter, marking an 11% increase from the same period last year. However, this figure has yet to recover to levels seen in 2021-2022. Similarly, Ho Chi Minh City saw a minimal number of new apartment listings, with the lowest in 15 years, attributed to an 80% absorption rate in the first quarter due to stable pricing.

Notably, pre-sales for upcoming projects in both cities show promising signs for Q2, indicating a more dynamic market. Savills Vietnam estimates approximately 8,400 future apartment units from 25 upcoming launches and three new projects in the remaining nine months of 2024, fueled by reduced home loan rates and improved buyer confidence.




3. Possessing Many Values Da Nang Urban Real Estate Will Soon Surpass Other Markets.


Possessing Many Values Da Nang Urban Real Estate Will Soon Surpass Other Markets.

With comprehensive investment and synchronized planning, Da Nang has created significant urban value, surpassing larger cities like Ho Chi Minh City and Hanoi. This includes landscape and infrastructure advantages, as noted by Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association.

The current surge in high-end urban real estate demand in Hanoi stems from a scarcity of supply due to delayed project approvals, particularly in the apartment segment. Da Nang, a centrally governed city, is forecasted for positive urban real estate prospects in 2024 due to strategic development, balanced infrastructure, and economic growth.

However, there’s a need for more diversified urban real estate projects to meet various income groups’ demands, from social housing to luxury residences. Leveraging its natural landscape and modern infrastructure, Da Nang stands out competitively, especially with recent high-end riverside property developments. Yet, the city lacks modern property models like integrated complexes, presenting an opportunity for further development.




4. Rising Prices of Social Housing in Hanoi.


Rising Prices of Social Housing in Hanoi.

The social housing units have been used for about 10 years but are being sold at prices many times higher than when they opened for sale. Currently, the demand for housing in the market is increasing, especially in the affordable and social housing segments. But this segment is increasingly rare, with almost no new shopping carts appearing. Instead, in the current market, products are all in the mid-range and high-end segments, with very high prices. Therefore, the pressure on supply has caused the prices of social housing houses to increase many times even after many years of use.


Explaining the cause, a CBRE representative said that the population growth rate and urbanization are high as the number of people returning to Hanoi to study and work increases. Meanwhile, supply and market are very low. In 2023 alone, the total supply of new offerings in the Hanoi market is about 10,000 units, equal to 1/4 of normal times. Experts predict continued price increases for centrally located mid-range apartments in the near term. While high-end and luxury properties might see slight price drops, social housing is expected to maintain its upward trajectory.




5. The Segment Of Real Estate With Record-high Rental Prices In The Past 15 Years Has Been Revealed.


The Segment Of Real Estate With Record-high Rental Prices In The Past 15 Years Has Been Revealed.

The CBRE Market Research Department’s March 2024 survey reveals an increased demand for office spaces across Asia-Pacific, particularly in major markets like China, Japan, and Hong Kong, coinciding with projected regional economic growth of around 4.5% in 2024.

In Vietnam, Ho Chi Minh City (HCMC) observes improved office market conditions in Q1 2024, with rising rental rates for Grade A and Grade B spaces. Meanwhile, Hanoi welcomes the Vinacomin Tower, adding a substantial Net leaseable area (NLA). HCMC’s office market achieves high rental rates, with Grade A space hitting a 15-year peak at $47.2 USD/m2/month, while Hanoi’s rental growth is steadier. Both cities anticipate significant new office supply, particularly in Hanoi, signaling positive market trends and demand for quality office spaces.





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