The more the economy develops, the more house prices increase. When can I buy a house?越南文

Context of Vietnam's economy

Vietnam's economy in 2023 will witness unfavorable global economic and political fluctuations, but there will be positive developments thanks to the drastic and effective direction from the Government and Prime Minister. General. In particular, the involvement of the entire political system, the continuous efforts of all levels and sectors, and the consensus from the business community as well as people nationwide have made an important contribution to achieving this growth rate. impressive economic growth. Although it does not reach the target of 6.5% set out in the 2023 Socio-Economic Development Plan and Resolution 01/NQ-CP of the Government, the growth rate of 5.05% is still highly appreciated and put forward. Vietnam is in the group of countries with the highest growth rates in the region and the world.

In the context of the domestic macro-economy continuing to be stable, inflation is controlled at an appropriate level, supply and demand of essential goods are guaranteed, purchasing activities and domestic consumption maintain a fairly high growth rate. . At the same time, the agriculture, forestry and fisheries sector continues to be a solid pillar of the economy with stable growth, confirming the effectiveness of the industry's structural transformation, ensuring food supply. , domestic essential goods and increased exports. Public investment has also been promoted in terms of implemented capital and high disbursement rate growth, social security has been paid attention to promptly and effectively.

原文圖片：photo.rever.vn

Regarding the real estate market, Vietnam does not stand out from the cycle of strong fluctuations according to the economic cycle, similar to the model seen in developed countries such as the US and Japan. During a period of rapid economic development, the sustainable growth of GDP and per capita income, along with the accelerated urbanization process, have been strong driving forces for the increase in real estate prices. However, it should also be noted that, in a difficult economic context or when entering a recession, real estate prices will also be affected and tend to decrease sharply.

Vietnam, in an effort to balance and stabilize the market, can learn from the German and Swedish models in controlling and regulating the real estate market. Controlling house prices and maintaining stability in the market through policy management measures, providing public housing and credit support for low-income home buyers and renters, can be effective solutions. practical solutions in limiting strong and unfavorable changes to the economy and society.  

The relationship between GDP and house prices

The relationship between GDP and house prices is complex and two-way, reflecting the close interaction between the real estate market and the overall economy.

From GDP to House Prices

• Economic Growth and Average Income: When GDP grows, per capita income often increases, allowing people to afford more housing. This increases demand for real estate, pushing up house prices.
• Infrastructure Investment and Development: Economic growth is often accompanied by investment in infrastructure and development projects, thereby increasing the value of real estate in invested areas.
• Inflation: In a growing economy, inflation can increase, causing the prices of many assets, including real estate, to increase.

From House Prices to GDP

• Impact on Consumption: Rising house prices create a wealth effect, making homeowners feel richer and willing to spend more, thereby boosting GDP. On the contrary, when house prices decrease, homeowners feel poor and limit spending, leading to a decrease in GDP.
• Investing in Real Estate: When house prices increase, investing in real estate becomes more attractive, attracting investment from both domestic and foreign countries, thereby boosting GDP. However, this can also create a real estate bubble, when investing is based on expectations of continuously rising prices and not on actual value.
• Construction and Related Industry: Rising prices in the housing market boost the construction industry and related industries such as building materials, architectural services, interior design, etc., thereby contributing to GDP.

Regulatory Factors and Support from the Government

• Government policy plays an important role in controlling this relationship. Measures such as credit regulation, regulations on real estate sales, taxes and incentives can affect house prices and have a negative impact on GDP.
• The government can also play a role in providing social housing and housing support for low-income people, helping to stabilize the housing market and limit the negative impact on GDP due to house price fluctuations.

原文圖片：photo.rever.vn  

Forecasting house price trends according to GDP growth

In the first quarter of 2023, Ho Chi Minh City's gross regional product (GRDP) in the first quarter only increased by 0.7% over the same period last year. Along with the growth in economic development, house prices in Ho Chi Minh City also tend to increase. The average apartment selling price in the first quarter of 2023 increased by 2% compared to the previous quarter and 10.2% over the same period last year, located at over 60 million VND/m2. The supply during this period is nearly 2,900 apartments offered for sale to the market, more than doubling compared to the same period last year and 1.2 times compared to the fourth quarter of 2022.

In the second quarter of 2023, Ho Chi Minh City's total product (GRDP) in the second quarter of 2023 increased by 5.87%, more than 8 times the growth rate of the first quarter (the first quarter grew by 0.7%). Despite GDP growth, apartment prices have decreased mainly due to buyers' waiting psychology, so investors have adjusted prices down to stimulate demand, thereby increasing the absorption rate of projects. This in the latest quarter reached nearly 80%. The average primary price in the second quarter of 2023 in Ho Chi Minh City reached less than 60 million VND/m2, down 4.8% compared to the first quarter of 2023.

In the third quarter of 2023, thanks to the motivation from consumption, public investment and tax exemption and relaxation, Ho Chi Minh City's economy improved continuously over 3 quarters, helping GRDP in 9 months increase by 4.57%, continuing to increase higher than two quarters. ago, reaching 6.71%. The number of new apartments launched for sale mostly comes from the next phase of existing projects with the primary selling price of the apartment market in the third quarter reaching more than 60 million VND/m2. Thus, by the third quarter, the primary selling price had recovered compared to the second quarter (below 60 million/m2).  

In the fourth quarter of 2023, apartment prices continue to increase in price in Ho Chi Minh City, with some projects having an average increase of 3.6-4.4%. In the market, there are almost no projects in the affordable apartment segment (price below 25 million VND/m2), but mainly the mid-end apartment segment (price 25 - 50 million VND/m2) that is eligible to mobilize capital. and transactions. The economic growth rate in the fourth quarter according to GSO tends to be positive, higher than the previous quarters of 2023, specifically the first quarter increased by 3.41%, the second quarter increased by 4.25%, and the third quarter increased by 5.47%. .

Apartment prices are forecast to continue to increase. According to a report by Batdongsan.com.vn, in the long period from 2015 to 2023, the apartment price increase index in Hanoi and Ho Chi Minh City is 82% and 56%, respectively. According to calculations by Savills Vietnam, the growth rate of apartment prices from 2019 to the first half of 2023 is 13%/year. 

Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), said that although inner-city apartment prices are high, the upward momentum continues because of large demand while limited supply. In particular, the selling price of primary apartments in Hanoi will continue to increase by an average of 3 - 8%, with high-end apartments increasing the most. Limited supply will also cause Hanoi apartment rental prices in 2024 to increase by about 5%.

原文圖片：photo.rever.vn

Explaining this statement, Mr. Dinh said that supply is scarce, especially low-cost and affordable apartments are in serious shortage, combined with increased input costs from materials, labor, land prices... has a cumulative impact on apartment prices.

"The housing demand of people in large cities is still very high, while the preparation for investment in real estate projects is prolonged, making the supply unable to meet immediately, many projects are also canceled. stagnated due to legal problems, apartment prices can only remain at a high level or continue to increase," Mr. Dinh said.

Sharing the same opinion, Professor. Dang Hung Vo also commented that apartment prices in 2024 will continue to increase. Explaining this, Mr. Vo said that the story of house price increase despite the quiet real estate market is not surprising as raw material and labor prices are increasing steadily each year, so costs to build a house will certainly increase accordingly.

Not to mention, a section specializing in speculation and buying and reselling in the secondary market has caused the price of houses to reach the end user to be inflated many times.

Sharing the same opinion, Ms. Do Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi also commented that apartment prices will continue to increase in the coming time due to rising land prices and construction costs. 

In addition, the need to invest in improving the quality of products and surrounding utility infrastructure and internal projects also leads to primary market prices, or prices of newly launched projects, always being high. higher than the general average of the apartment for sale market. 

On the other hand, Mr. Nguyen The Diep, Vice Chairman of Hanoi Real Estate Club, assessed that the current shift in buyer demand is focusing on the apartment segment because this is one of the products with the lowest price. The price is suitable for people to pay, even though it has increased significantly.

“This changing mentality causes more and more demand, while less supply, so apartment prices continue to be very high. For projects under construction and newly opened for sale, the price increase margin will be higher, because investors are under great pressure on input costs. It is forecasted that apartment prices will continue to increase for many years to come, in the context of great demand created from the urbanization process," Mr. Diep analyzed.

Looking to the future, forecasts show that despite certain challenges, the Ho Chi Minh City real estate market will continue to be an attractive investment channel, especially when new supply is expected to arrive. scarcity, along with construction costs and land prices continuing to increase. This requires investors to always be sensitive and updated with market information to be able to make smart and effective investment decisions.

In all situations, maintaining confidence in the market and being prepared for fluctuations is the key to success in a dynamic real estate market like Ho Chi Minh City. For investors, continuing to closely monitor market developments, as well as comprehensively evaluate the relationship between economic growth and real estate prices will always be a necessary step in the future. investment path.
 

For more information about real estate projects in Ho Chi Minh City and neighboring provinces, please contact FTT LAND!

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