Vietnam High-End Home Prices Poised To Fall This Year
High-end home prices in Vietnam are poised to fall this year as property speculators struggle with higher mortgage costs and are being forced to sell. The warnings were made and came only days after the Vietnamese government signaled concerns about the mismatch in the supply of luxury and affordable housing. It urged builders to switch to less expensive homes even at the risk of incurring temporary losses. Bach. Ta Director of Capital markets transactions at property services company JLL said that prices for higher-end homes in Vietnam could drop by 10% or more in 2023 before rebounding in 2024 as heavily leveraged homeowners sell their holdings and push more supply into the market. “Those stocks will compete with new stocks,” he said. The falling prices for high-end premium apartments represents a rare reversal for Southeast Asia’s fastest -growing economy which has seen turmoil in the real-estate sector linked to a slowdown in lending. The declines follow an official crackdown on corruption in the property and bond markets that intensified last year. The State Bank of Vietnam said that instead of focusing on those with real needs of housing there has been too much speculations, price manipulations for profit and borrowings in the high -value housing segment. Credit growth last year was 24% in the real-estate sector compared with 14% in the broader economy, the central bank said, adding its overall credit growth target is 14-15% for 2023. The government is weighing several policies to increase the supply of social housing and worker’s housing including a 110 trillion dong ($ 4.6 trillion) credit package proposed by the construction ministry. “Their behavior of using leverage will change absolutely people will be more cautious about that,” The behaviour of short-term flipping and trading activities will change significantly. It’s almost vanished from the market.” Ta said sellers are offering steep discounts on apartments while Paul Fisher, JLL, Vietnam Country Head, added that they are also trying to attract buyers with gift cards or free furniture while keeping official prices at current levels.
Tags : home prices Vietnam property mortgage Vietnamese government