The apartment real estate segment has many advantages to make a breakthrough
According to the real estate world, apartments are the real estate segment least affected by negative market impacts because they serve real housing needs. The average profit rate when investing in apartments from 2015 to present is 12.5% per year, including price increases and rental profits. This is a better and more stable profit than other investment channels such as stocks, gold, foreign currency, land or savings. The reason is that apartment prices are constantly increasing and the demand for buying and renting this type is always high.
A Savills survey of 30 class A and B projects in the city. HCM shows that apartment rental yields in 2023 remain stable at 4.8% year-on-year. Mr. Troy Griffiths, Deputy Managing Director, Savills Vietnam, assessed that the total return on investment in apartments is still higher than the deposit interest rate, showing that apartments are still a profitable investment channel. In the short term, rental yields are expected to increase as the number of apartments handed over decreases and deposit interest rates will remain low.
“The short-term challenge of the apartment segment still comes from the problem of scarcity of new supply and high selling prices. When homebuyer psychology improves and there are not too many alternative investment options, the housing market will recover,” Mr. Troy commented.
Apartments will continue to be the leading segment of the real estate market (Photo: TN)
Another positive point for the apartment real estate segment in 2024 is that new supply is expected to increase 4 times compared to 2023. Of which, the Grade B segment will account for 44% of the market share; Grade A will have 37% from high-rise projects at The Global City and Grade C will only have 19% market share. By 2026, it is expected that 40,800 apartments from 116 projects will open for sale.
According to Mr. Tran Minh Tien, Director of One Mount Real Estate Market Research and Customer Understanding Center, this unit’s survey at the end of 2023 also recorded that 63% of people have real estate needs. In 2024, most are interested in two real estate segments: apartments and residential real estate (including land and residential real estate).
“The number of transactions in Hanoi’s secondary transfer market in the last month of 2023 was exciting with the number of transactions in the residential real estate segment being higher than project transfer transactions. In particular, the transfer market Apartment transfer in Hanoi takes place in many different projects, in which projects of large investors such as Vinhomes account for a large proportion. Megacities with large secondary supply on the market are The project has the largest number of transfer transactions in the apartment real estate segment in the last months of 2023,” Mr. Tien said.
Real estate will also benefit from increased real housing demand
In Hanoi, one of the real estate segments that is forecast to increase in price strongly once more in 2024 is real estate in alleys. In fact, just before the Lunar New Year, real estate brokers said that the real estate market in Hanoi’s alleys is vibrant once more as the number of transactions increased dramatically. Prices also increased compared to a year ago.
Regarding the attractiveness of land-locked real estate, according to Savills’ report, in recent years, although the market has fluctuated, the profit margin of land-locked real estate has had a high price increase. , fluctuating 20 – 25%/year. Even in some projects, secondary market prices increase by 40 – 50%/year.
The townhouse real estate segment is still an effective investment channel in the future (Photo: TN)
Mr. Vuong Anh Hoa, a real estate investor specializing in the housing segment, said that currently the price of secondary supply of townhouses is quite diverse and the advantage lies in the hands of buyers with “fresh money”. Although the transaction price is quite large, this group of assets meets many goals because it is both for living and exploiting for rent in many different industries such as office work, store business or accumulating cash flow and preventing price slippage.
Many experts also believe that real estate is still an effective investment channel and a safe haven in the context of inflation continuing to increase in the near future. This product line is suitable for investors with stable financial flows who can invest in the medium and long term. Therefore, recently, house prices in alleys in Hanoi have increased once more because real demand for housing is still large. After mid-2023, house prices in the alley will increase by an average of 200 – 300 million VND/unit. This type is forecast to continue to increase slightly by 10-15% in 2024.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said it is not difficult to understand that residential real estate is forecast to be the “bright spot” real estate segments of the 2024 market. Real estate segment Residential property is associated with the “inch of land, inch of gold” thinking of our ancestors, the need to own real estate and the need to accumulate assets of Vietnamese people is very great. That’s why residential real estate is always considered a haven for cash flow, especially during the challenging period of the current market.
“Cash flow for housing and investment persistently flows into real estate, especially for segments that aim for long-term housing and investment needs such as residential real estate because of the nature of consumption, existing characteristics as well as Verifiable business performance and cash flow. Therefore, residential real estate will be the bright spot real estate segment of the market in 2024,” Mr. Dinh commented.
