Experts, speaking at a conference in Hanoi on Tuesday, gave three scenarios for the 2017 domestic property market, with the most likely one being that the market will move sideways. The other two scenarios are that the market will continue growing, which are the least probable, or will go down.
The conference on prospects for the real estate market next year was held by Nha Dau Tu magazine, the Vietnam Real Estate Association (VNREA) and Dau Tu newspaper in Hanoi on Tuesday.
Tran Kim Chung, vice president of the Central Institute for Economic Management (CIEM), told the conference that the property market would cool in the coming time as speculation has eased.
Chung said certain housing projects with a strong financial position remain attractive to homebuyers. However, real estate credit will drop since banks are tightening short-term capital for the property sector.
He said big-ticket projects costing VND5 trillion (US$224.2 million) or VND7 trillion or VND10 trillion each will become rare next year compared to 2016.
Chung suggested three scenarios for the 2017 real estate market.
First, it will be better than in 2016, which is desired by many. The scenario will only become a reality if the global economy grows well and does not enter a recession and Vietnam’s economic growth reaches its peak. Chung said this scenario would unlikely happen.
Second, the property market will move sideways with some segments plunging and some others edging higher. Chung said this is the most likely scenario but the market structure will change.
Third, the real estate market will cool if the world economy remains unstable and Vietnam’s economy faces unfavorable developments.
Do Thu Hang of Savills Vietnam said housing supply next year will stay high in both Hanoi and HCMC. Many more social housing projects will come on stream to meet rising demand of middle-income people and workers at industrial parks.
Of some 2.6 million workers at industrial parks, 75% are migrants, 75% are under 35 years old, and they have annual income of US$2,500 on average. They are potential customers of the social housing market, Hang said.
Chung of CIEM said the social housing segment would be the spotlight of the property market next year. However, the segment needs the Government’s supporting policies to grow.
Nguyen Manh Ha, vice chairman of VNREA, said the real estate market will remain stable in 2017 with the low-end and social housing segments performing better.
He said growth in the social housing and mid- and low-end segments will be impacted by State policies. Meanwhile, the shop-house and villa segments will continue attracting clients as many homebuyers prefer an independent house to an apartment.
Reviewing the market this year, Ha said the number of successful housing transactions in 2016 is lower than in the previous year. By end-November, Hanoi and HCMC had recorded 27,565 such transactions, representing 80% of the 2015 volume.
Ha said home acquisitions are to meet the real demand of people rather than for speculation.
Hang of Savills Vietnam said apartment sales in Hanoi and HCMC this year are lower than in 2015 but still high compared to the previous years. Of around 30,000 apartments offered for sale, over 23,000 have found buyers in each city.