Ha was speaking at the seminar 'Vietnamese real estate: outcome and outlook' on January 3.

Blocks of social housing apartments in Ninh Thuan Province. The completion of some huge social housing projects this year is expected to boost sales in the market. 

He said the tide of cheap money in late 2021 had lifted many boats in the early months of 2022, including real estate. Housing prices were soaring on the back of the post-pandemic economic recovery and the growing demand from homebuyers.

However, the industry began to go into reverse in the late months of the year as a result of a change in the governmental stance on bank credit and corporate bonds. The government's tightening up on the two capital channels has caused worries among investors and brought it to a halt.

"The number of estate agents now stands at around 30 to 40% of that in the early half of 2022," said Ha.

Still, he has an optimistic outlook for the industry in the short term as the completion of some huge social housing projects this year is expected to encourage sales to low-income homebuyers.

Nguyen Manh Quynh, chief of staff of the Vietnam Association of Realtors, held that the supply of commercial real estate was tight in 2022 with around 48,500 products for sale, equaling just 28% of the figure in 2018.

"The market was facing a shortage of affordable housing and, at the same time, witnessing a surge in luxury housing," said Quynh.

By product types, land slots took up 44% of the pie and high-end housing followed with 37%. Middle-end housing came next with 15% whereas low-end apartments stayed at rock bottom with 4%.

The chief of staff forecast that real estate sales would remain low in Q1/2023 but begin to improve in Q2/2023 on the grounds of a better macroeconomic situation. Average prices, meanwhile, are expected to fall slightly until mid-Q2 and then level off towards the end of the year.

Pham Lam, chairman of the DKRA Group, revealed that 1,081 real estate enterprises were dissolved and 2,379 temporarily ceased their operation in the first 11 months of 2022.

The situation is not better now as real estate enterprises face many setbacks. One of the setbacks is the tight supply of land, which falls between 40 to 83% year-by-year across segments.

Lam urged the enterprises to cut costs and cut staff wisely to get through this tough time. He said digital transition is a solution to the cost-saving problem as it significantly reduces overheads.

"My message for the enterprises in 2023 is 'tighten your belts'," Lam added.

Can Van Luc, chief economist at the JS Commercial Bank for Investment and Development of Vietnam, estimated total capital funneled to real estate in 2022 at 507 trillion VND (21.5 billion USD), of which 71.0% come from bank loans and 10.8% from corporate bonds.

"Corporate bonds normally account for about 22% of real estate capital. Unfortunately, this source of financing was reduced by half last year," said Luc.

The economist also revealed that he was urging the government to introduce a favorable mechanism to support the industry in its effort to repay 120 trillion VND worth of corporate bonds in 2023 and 110 trillion VND in 2024.

Source: VNA